The following article has excerpts from the January 2018 issue of Equipment India Magazine.
Started in a humble way in 1960, ELGi Equipments has today transformed to become the seventh largest compressor manufacturer world over, with business presence in over 70 countries. The company has now set its ambitious goal of becoming the Number Two compressor manufacturer globally in a decade. In the last four years, after the completion and working of its sprawling 2,00,000 sq ft facility at the Kodangipalayam village in Coimbatore, ELGi can proudly claim that the foundation to reach its goal has been well laid.
Anvar Jay Varadaraj, Senior Manager - Marketing & Corporate Communications, elaborates on the company's approach, “Our mission is to establish the ELGi brand. Today with many companies giving technical details and characteristics of their products, we focus on a content-driven approach. The compressor works in the background, and the challenge is to make the customer understand how important are its reliability, power conservation, etc.”
A Facility of Global Standards
ELGi has two factories in Coimbatore - the 20,000 sqm Singanallur facility for the final assembly line, and the Kodangipalayam facility, which includes the airends plant and the foundry. The young Kodangipalayam facility has technologically advanced imported machine tools to ensure the highest accuracy and quality standards. Recently ELGi has also started developing its own machines-for profile milling, grinding and polishing. This is aimed at bringing down the manufacturing cost without compromise on quality.
The foundry adjacent to the airend manufacturing facility is another site of excellence in structure and facilities. “Everything about the foundry is green, and even the wastage of the sands that go for moulding is recycled as bricks,” says KV Rao, DGM - Foundry, who is passionate like all the managers while explaining the various features of the foundry. The foundry is equipped with best-in-class foundry equipment under one roof with minimum use of exhaustible natural resources, contamination of ambience and facilitates to produce constantly reliable quality castings.
Says Rao, “The foundry-grade sands are sourced from the country in processed condition and sometimes high-quality sands are imported from Saudi Arabia. The entire process is almost automated and is handled by a few workers with a shift of 7 am to 5 pm.” The Singanallur best-in-class conveyor assembly line with automated monitoring and testing stations has a capacity to produce 15,000 screw air compressors and 25,000 piston compressors. The company is in the process of getting its products certified by Compressed Air and Gas Institute (CAGI) of USA.
On the constant upgrading in quality of its products, KSR Murthy, Director - Technology and Operations, comments, “Our motto is to invest ahead of demand.” ELGi spends about 3 to 3.5 percent on R&D, and is equipped with an efficient design team to take care of the futuristic requirements.
R Jayakanthan, Director - Product, Systems & Strategy, is proud enough when he comments on the privilege that ELGi enjoys in the compressor segment, “Our core competency is building perfect compressors, and we have achieved this step by step over the years. Today, we stand among the best compressor manufacturers all over the world. We have learnt and applied as the journey progressed and today have reached the position among top players in the world. Besides, new markets have been explored abroad and captured.”
With the economy opening up and segments like infrastructure taking its due place in the developments, ELGi is positive about the demand for compressors perking up in the coming years. ELGi is always in a state of preparedness with technological changes and demand matching such transformation.
Export Market
ELGi exports about 50 percent of its compressors, of which more than 70 per cent goes to the western markets, mainly the US and Europe. “The challenge is to enhance the brand of our compressors globally, and get more pull in the market for ELGi compressors. Globally as we start selling compressors to big names like Johnson Controls, people turn their attention to our compressors. Our big competitors are in Europe or the US and hence the challenge to become No. 2 globally will be taken up without any compromise on any of our divisions,” comments Varadaraj.
Ramesh Ponnuswami, Director-India, South Asia, Africa and Middle East, elaborates on the company's global market presence, “Our technological capability is of very high order, and as we grow globally, we are prepared to meet many challenges. Today we are a force to reckon with in compressors within the country. India has a relatively small share, just 5 per cent of the $15 to $16 billion global compressor market. We are in the process of strategizing and getting a lion's share in the total market. Our back-end is very strong. Now, with the global aspiration to be No. 2, we are working together towards achieving the goal collectively.”
HR and Training Initiatives
One of the cornerstones on which the strength of the company is built is the HR policies and culture. Jayashankar Jayaraman, Director - HR, explains, “Our constant endeavour is to be inclusive where communications to everybody across the ELGi universe is common. The strength of our management policy lies in the fact that we have one policy from the lower rung of workers to the top level. This is a culture we have built over the years. We have even worked out how to fill the gaps, when some of our senior managers will be retiring in the next few years. Training the new breed to bridge the gap is already on.”
ELGi runs its own training school known as ELGi Vocational Training School (EVTS). The school absorbs bright candidates for a three-year Diploma-equivalent course through test and interview. After successful completion of the course, they are inducted into the production lines as workers.
There is another training facility called Dexterity Centre at the Singanallur premises, to help enhance the ergonomic use of four motion principles of the operators during assembling the compressors. The training is intense and the graded system selects workers on their various capacities to be placed suitably.
Looking Forward
As company looks forward to moving up in its market position, there are many challenges that lie ahead in the growth path. “The biggest challenge for us is to create awareness about energy saving through compressors and also to find new applications. We do not want to sell just a product but a system that will contribute to the growth of the company,”' says Varadaraj.
ELGi plans to leapfrog to Number Two position with the market shares in the country versus international from the present 50:50 going up to 20:80. Hence, most of the growth will be coming from outside and the inorganic growth will reach 70 percent, according to Varadaraj. After consolidating its presence in Europe and Americas, some of the breakthroughs in ELGi's exports have happened in south-east Asian countries including Indonesia in the recent times. The journey to the 10x growth in the next decade has already begun in earnest and ELGi is well on its way to achieve this feat.