ELGi has been focused on ensuring that its products are energy efficient and therefore have minimal impact on the environment, at no additional cost. With a first-of-its kind heat recovery system, ELGi is using 96% of the waste heat generated by air compressors to heat air (space) and water. This in turn eliminates the need for additional equipment to heat water and reduce CO2 emissions.

Apart from this, ELGi has been involved with several projects around the world to help conserve natural resources.

Cleaning Mirror Lake in the US

When the Delaware Department of Natural Resources and Environmental Control in the US wanted to clean the historic Mirror Lake in Dover, they partnered with ELGi air compressors.

ELGi’s Rotair D300K compressors were used to fire carbon pellets to the bottom of the lake to trap contaminants.

In talks with Managing Director, Dr. Jairam Varadaraj, The Textile Magazine unearths the determinants of ELGi’s powerful claim in the compressed air business –– “we provide the lowest lifecycle cost in the world.”

In Part One, we followed ELGi’s evolutionary journey in manufacturing and design which makes a compelling case for sales of their air compressors. But ELGi’s approach to after-sales service is what makes them valuable partners for customers in the long-term.

Commenting on ELGi’s relationship with the Indian textile sector, Dr. Jairam Varadaraj said: “As a group we know textiles better than our competitors. This is because we have our own spinning mill in the group. We have been in the business of textiles for 40-odd years now. We know the pain points and challenges. Plus, we are based out of Coimbatore, a premier textile hub. Wherever you go across the country, people in the textile industry know ELGi.”

The company has a strong sales and service network spanning the length and breadth of the country. ELGi has an extensive team of more than 500 sales and service personnel with a maximum response time of eight hours. Elaborating on this, Dr. Varadaraj pointed out: “For us it is not just about responding when a customer calls. It is about restoring air. Today 96-97% of our customers get their air back in less than six hours. That’s a record nobody can beat. In fact, even our competitors acknowledge this strength of ours. We deliver uptime.

Generally we are there in about an hour. That’s the physical infrastructure. We also have a strong system in place where every defect, however small it may be, is registered at the factory by evening. We are also coming out with a SIM card based device which is incorporated in our compressors. It is in the testing phase. While others have also been offering similar services, we are doing it with a difference. The device talks to the compressor and gives a comprehensive performance report through an algorithm. The software then starts predicting. See, any mechanical device will degrade with wear. Failure takes place when you don’t notice this wear. With this monitoring, you will be able to get there before the failure. Predictive maintenance is what we offer. We have supplied about 55 machines with the device. By the end of this year, we will make it standard on all our machines. Many of our competitors offer it usually for large machines and invariably tied up with a service contract. We don’t want to follow that path. We firmly believe that the device is meant for us. More than our customers, we want to know how our machines are performing, for it will help us keep improving and stay ahead of the curve.”

The automotive industry is one of the bulwarks of the Indian manufacturing sector, accounting for 7-8 percent of the GDP. For companies enjoying a good sales run in the market, it is essential that they utilise their manufacturing capacity to the fullest, to ensure that supply meets demand. This also means their factories have to run seamlessly, without any hiccups.

All manufacturing plants, whether automotive or otherwise, use compressed air for a multitude of operations. It is known that a good number of Indian OEMs and component makers use the services of the Coimbatore-based ELGi Equipments to source their air compressors that perform a varied range of tasks at their plants.

This company, which started out as an automotive service company in the 1960s, is today gunning for global leadership in the air compressor business. Managing director, Dr Jairam Varadaraj, who took over the family business in the early 1990s, envisages a huge opportunity in air compressors to catapult the company into the big league. This singular focus on air compressors has also seen the company move out of its other businesses.

With annual revenues of over Rs 1,500 crore in 2015-16, the listed company is among the prominent air compressor makers not only in India but also in over 70 countries, competing with German and American rivals.

Initially, it set out by making small size reciprocating compressors for automotive garages but over the years, backed by technological know-how, it ventured into the manufacture of air compressors.

ELGi now offers a whole range of compressors including air solutions ranging from oil-lubricated and oil-free rotary screw compressors, oil-lubricated and oil-free reciprocating compressors and centrifugal compressors, to dryers, filters and downstream accessories. Its 400- product-strong portfolio has wide application across industries.

Catering at multiple levels

Speaking to Autocar Professional, on a recent visit to the Coimbatore plant, Dr Varadaraj said, “We cater to the automotive industry in three different segments – firstly garages from a single bay to 50 bays; secondly, component suppliers and lastly, vehicle manufacturers. We cater to Tier 1, 2 and 3 suppliers, serving the auto sector at multiple levels.”

FY2015-16 saw the company record 11 percent year-on-year growth on the back of the Indian auto industry’s improved performance. Passenger car sales rose to register 7 percent growth while M&HCV sales grew by 30 percent, signaling an overall reversal in trend. ELGi’s exports grew by 21 percent despite a slowdown in economic activity and natural calamities in key export markets.

The company’s auto clientele includes OEMs such as Renault-Nissan, Hyundai Motor India, Ford India, Honda Cars India, Maruti Suzuki India, Ashok Leyland, Tata Motors, BharatBenz, Mitsubishi, Skoda India, Toyota Kirloskar Motors India, Volkswagen India, Volvo Cars, Hero MotoCorp, TVS Motors, Bajaj Auto, Ceat Tyres, Mahindra & Mahindra and Bridgestone India.

Eyeing its next phase of growth, ELGi is bullish on the auto sector and on building its brand both in India and overseas markets. “We are undertaking a grassroots brand-building approach to strengthen our presence in the auto sector,” says Anvar Varadaraj, manager (Special Projects), who joined the company a few years ago.

Notwithstanding competition from global players, ELGi has been highly competitive with top-quality products offering superior maintenance and servicing to customers. Over the years, it has set up an extensive countrywide network, making service available at every 60km by either a dealer or a service centre. ELGi is now targeting faster turnaround time for customers with 90 percent of maintenance call attendance and return of the affected compressor within eight hours.

ELGi’s range of air compressors includes oil-free screw compressors, electric screw air compressors with optional in-built dryer and variable frequency drive, EN series electric screw air compressors, belt-driven compressors, with/without receiver tank and dryers, portable screw compressors, lubricated reciprocating air compressors ranging from 11kW-450kW.

In FY2015-16, the compressor business accounted for 86 percent of total sales, 89 percent of the profits and 85 percent of the capital employed. ELGi has a total of 1,592 employees.

Banking on technology

Over the years ELGi has developed cutting-edge technologies with formidable manufacturing capabilities in air compressors. Speaking about the technological strength, Dr Varadaraj said, “Technology has two elements – know-how and know-why. Most companies have know-how; they know how to make a product, but they don’t know why it is made that way. Only when you have know-why, you can make the next product. Over the past 20 years of investments, we have know-why of the compressor, we can educate best in the world about how to build a compressor with fundamental knowledge of the why of the air compressor and not just how. Building why is not easy, it means partnering and understanding the fundamentals of the technology. This is not achieved just by hiring engineers but partnering with universities, investing in research programs, and embarking on large experimental projects. We have done all this in the last 20-25 years.”

ELGi aims to be a hotbed of innovation and has an independent R&D team with 160 staffers working on breakthrough technologies in-house, focusing not just on reducing costs but also improving the quality and tolerance of parts through better control over manufacturing.

“Our informal study shows that we are the number two in terms of quality globally. We are looking to surpass the leader soon. We benchmark quality against leading global companies with a customer-centric focus on aftersales with superior spare parts, highly trained engineers, and longer maintenance intervals. Our parts are designed to last longer so that they are more maintenance-friendly,” said Anvar.

ELGi’s sharp focus on quality sees it bank heavily on its manufacturing excellence and sourcing of best quality material from global suppliers. It has also achieved a high level of automation in manufacturing compressors at par with that of international players and acting as import substitutes. “Earlier, we used to buy these expensive machines from abroad whenever we thought of expanding capacities. But now, we build this machine ourselves at a fraction of the cost,” affirmed Anvar.

It is just this pursuit of excellence which is benefitting ELGi and subsidiary companies like ATS ELGi. As demand for vehicles across categories grows, OEMs are hard-pressed to deliver and some are even stretching their capacities. For such manufacturers, a smoothly-running plant is imperative. That’s why they value hard-working equipment like air compressors that keep plants running seamlessly.

Read Dr Jairam Vardaraj’s  interview with Autocar Professional, India.