13th September 2023
A global leader in compressed air systems & solutions
ELGi is one of the global leaders in the air compressors business and is currently the sixth-largest player in the world. While its goal is to be one of the top three air compressor manufacturers globally, its strategy for growth in global markets has included both organic and inorganic initiatives. “With our core market being India, we have expanded our global footprint by acquiring Rotair in Italy, Pattons Inc, Pattons Medical and Michigan Air Solutions in North America, Pulford Air & Gas, and Advanced Air Compressors in Australia. North America, Europe, India, Indonesia, Thailand, and Australia remain our focus markets, constituting nearly 90% of our revenue and 70% of the global opportunity. We will continue to invest in these markets to meet our long-term goals,” reveals Anvar Jay Varadaraj, Executive Director.
ELGi is one of the few manufacturers to offer a complete range of air compressor products, from oil-lubricated and oil-free reciprocating compressors, oil-lubricated and oil-free rotary screw compressors, and centrifugal compressors to dryers, filters, and downstream accessories. Its goal is to go deep into the compressed air segment to address the customer’s unstated compressed air needs.
Dwelling on the company’s R & D efforts, Anvar says: “With all of our products, we aim to reduce the customer’s life cycle cost, and within that the costs of energy, maintenance, and downtime. The cost of downtime is often not considered by customers when they purchase a machine; it is basically a loss in profit when the air compressor is not running. We focus on this area, and accordingly, we engineer and design for reliability under the toughest working conditions. In terms of technological innovations, we believe the entire category is moving towards oil free. In 2019, we launched our AB ‘Always Better’ series range of water-injected oil-free screw air compressors. What’s unique about this machine is that it improves the efficiency of traditional oil-free, improves reliability, and significantly reduces the upfront cost investment. And, going forward, oil-free is also an eco-friendly proposition.”
Elaborating on ELGi’s manufacturing excellence, Anvar adds: “What’s highly characteristic of our manufacturing is that it’s vertically integrated for quality and flexibility. We determined that the more elements of our manufacturing process we can control, the higher the chances of providing best-in-class quality. So we have our own foundry where we produce our castings. We make our own machines to build our Airends. We’ve invested in our own motor plant and a pressure vessel division, so our ability to control various aspects of the manufacturing process puts us in a place where we have really strong quality. Yes, we have lean manufacturing initiatives and self-managed teams. We won the Deming Award for Process Excellence, and we’re investing more and more in reducing our carbon footprint and moving towards resource-neutral operations. For example, to achieve our goal of reducing carbon intensity to 28% by 2026-2027, we’ve replaced traditional energy meters with smart meters at our manufacturing facilities; these meters detect loads based on amperage, and idle machinery, and distribute the load optimally. This has resulted in savings of about 1.5 million units of electricity per year. Additionally, we’ve implemented an Energy Management System (EnMS) at our Air Compressor Plant (ACP) with 145 IoT-enabled machines interconnected, enabling an improvement in energy consumption of approximately 24% in plant operations and energy savings of about 1.02 MW per year.”
“The most important differentiator for ELGi is its razor-sharp focus on the customer, both in terms of understanding their immediate needs for products and services and also figuring out the unsaid wants of the customer so that our long-term product development and product improvement will be attuned to these needs. Being highly customer-centric and trusting what the customer wants is embedded in ELGi’s DNA and is a core value proposition.”
Values and Culture
About ten years ago, ELGi started on its CK2 journey, which is to be amongst the top three compressed air manufacturers in the world, and that has become a powerful rallying cry for all of its employees globally to work together to drive success within the company. But it’s not just about the financial goals. The company has a set of seven extremely important values that it adheres to, and every day its employees showcase the values in their actions. Quality, innovation, speed, cost prudence, integrity, sensitivity, and collaboration are the values embodied within the company’s culture.
Roadmap for Future
“In FY23, we delivered sales and profitability as per the Annual Business Plan (ABP) goals, and we are well-placed to achieve the committed results outlined in our five-year Strategic Business Plan (SBP). Based on our FY23 performance, we have committed to a revenue of INR 37,500 Mn with EBIDTA @ 16% and ROCE @ 30% for FY25-26. We’re moving along in our CK2 journey to be amongst the top three air compressor manufacturers globally,” declares Anvar in quiet optimism.
He further adds: “On the performance side, from a people and employee perspective, we want to increase the number of people we promote and grow from within the company. From a product portfolio perspective, we want to increase our reputation as a leader in understanding customer needs and developing best-in-class products that address demands such as environment friendliness, air quality requirements, and increasingly stringent energy standards from a manufacturing perspective. We will focus on growing the complexity of our manufacturing base beyond just India. With key markets such as Europe and North America, I expect we’ll have a more profound and robust manufacturing footprint. If we succeed across all of these dimensions, we will have an even greater impact on society with an increase in our capacity to invest more in our CSR initiatives.”
“At ELGi, we’re successful for two big reasons: At first, we have a clear goal, and we’re very steadfast in our goal, creating a remarkable sense of consistency and clarity within the company; Secondly, an incredible group of people that drives our journey towards this goal. The key to our success is the synergy between a robust goal and a team of highly motivated professionals,” states Anvar succinctly.