Plans worth Airing
Factory expansions and innovative technologies are helping ELGi Equipments in their quest to become the world’s second largest air compressor manufacturer by 2027.
by Mitalee Kurdekar
Whether it is the toothbrush that you use every morning or the airplane that you travel across miles in, chances are that some sort of air compressor was used to facilitate its production. And that really explains the scope of ELGi’s business – it pervades industries. When you add to this the fact that most Coimbatore-based businesses are traditionally averse to exposure to the outside world, their work appears that much more intriguing. Therefore, when ELGi invited us to visit their manufacturing facility in Coimbatore, it was an opportunity not to be missed.
ELGi’s flagship plant in Coimbatore is at the heart of operations. This state-of-the-art unit is housed on 89,000m2 of land, with an impressive built-up area of 32,700m2. It follows a systematic operating structure, dedicated to the manufacture of air-ends. The site produces close to 14,000 air-ends per annum, varying in diameter from 53mm to 310mm. These air-ends are then transported to a nearby sister plant in Singanallur, where the complete product is then assembled and packaged. There are two other factories in Italy and the USA. In all, the company produces 15,000 air-ends and 40,000 compressors every year.
As a matter of fact, ELGi boasts one of the widest array of air compressor solutions, ranging from oil-lubricated & oil-free rotary screw compressors, oil-lubricated & oil-free reciprocating compressors, and centrifugal compressors, to dryers, filters and downstream accessories. Overall, the company’s portfolio of over 400 products are utilised for a wide number of applications across industries and geographies. To service this mix of clients, ELGi also maintains warehouse facilities in Australia, Brazil, the Middle-East and the USA. Its subsidiaries include garage equipment maker ATS ELGi, in India; acquired Italian brand Rotair Spa; and USA-based Patton’s Inc. Besides this, the company has a joint venture under the name ELGi Sauer Compressors, also in India.
Interestingly, over 50% of the company’s revenue comes from overseas operations, with 60% of this figure coming from Europe and America alone. “Often, it is international successes that resonate in India, helping further reinforce the brand locally,” confesses Anvar Jay Varadaraj, head – marketing & communications, ELGi Equipments.
Of course, India is a relatively small market as compared with the global compressor market. While the international market is $15-17 billion, the Indian market is estimated to be around $600 million. Despite this, ELGi views the domestic market as a vital piece in its growth strategy.
“Within India, it’s important for us to get a lion’s share of that $600 million dollars, and that’s what my team and I are completely consumed by at the present time. This includes questions such as how do we get started on this mission, and how do we go to market in innovative ways given that we have world-class products and factories. We believe that we have the capability to not just produce compressors, but to make very high-end machines,” says Ramesh Ponnuswami, director, India, South Asia, Africa & Middle East, ELGi Equipments.
The company has aggressive plans to enhance their share of business across industries, different segments of the market, products and so on, in the coming years. This is instrumental to their global foray and also pivotal to their aspirations, one of which is becoming world number two in the air compressor field, globally, by the year 2027.
Although the target may seem ambitious, given that it means a growth of almost 10 times their present position, one must not forget that ELGi has been making air compressors for close to 60 years now, and has made the conscious decision to stick to its core competence, to this day.
“The back-end (manufacturing set-up) is very strong, and we have the opportunity before us to go and grab our fair share of the Indian market. We see that India will continue to be very important for ELGi. Even when we take a product abroad, we first need to prove that we are running enough such products elsewhere, especially on our home turf. Therefore, it’s extremely important to have that solid base, and we are building just that in India. This is a very exciting time for my team and I, because we have this huge aspiration to become world number two, and it comes from collectively putting together everything that we have and firing on all cylinders,” Ponnuswami states.
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An indicator of this zealous approach is that the plant making air-ends, which commenced operations merely four years ago, is currently running at almost full capacity, with plans to expand the same. Also, the raw materials or high-precision grey and SG iron castings are produced at ELGi’s own foundry, located adjacent to the plant. The foundry custom designs and manufactures these castings, laying a special emphasis on quality as well as the specific needs of individual customers.
Their manufacturing facilities consist of sophisticated, high-precision rotor grinding machines, turning centres, and CNC horizontal & CNC vertical machining centres. Many of these have been developed in house in order to suit the factory’s unique requirements. The unit follows Industry 4.0 processes, including the monitoring of machines, not just for energy-efficiency, but also to ensure a connected data environment.
In fact, IoT solutions have now been extended to their latest product offering, Air Alert, a sim-based data transmission service that will monitor a compressor’s critical parameters to ensure optimum energy consumption and compressor failure prevention. While this feature will be a standard addition to ELGi’s products in the near future, for now it is being made available as part of ELGi’s Air Audit programme, a review of an operation’s use of compressed air. A pilot project was run for the Indian Texpreneurs Federation (ITF), and helped its member companies to reduce average compressed air energy costs by upto 43%. While the textile industry is ELGi’s biggest customer, the company has plans to take the same programme to its customers in other industries too.
“An Air Alert equipped customer can rest assured that changes in their energy consumption post an air audit will be detected by ELGi’s Air Alert service and reported immediately for rectification,” assures Varadaraj.
ELGi’s R&D division ably supports operations, with a team based in Coimbatore and two teams located in Bengaluru, spearheading the ELGi innovation programme. Close to 3% of revenue earned is spent on developing R&D. There is a CADD unit for advanced designing capabilities, besides an integrated machine shop and a metrology laboratory. In addition, the Elgi Manufacturing System (EMS) ensures lean management, resulting in productivity gains, quality improvements, on-time delivery and considerable reduction in inventory.
While ELGi’s technological prowess reings supreme, their employees are the true drivers to growth. There is a sense of belonging and pride that is amply visible when they speak, and that a true demonstration of the company’s ethos, which places immense value on its talent. One of the things ELGi has done in this area is to set up the ELGi Vocational Training School (EVTS) to provide all-round training to freshers, straight out of school. There is a Dexterity Centre on campus, which ensures that employees keep practicing their skills, and bettering them, a feat that is rewarded with internal promotions.
Overall, ELGi Equipments is a fine example of how innovative technology, a dedicated work force and a relentless focus on quality are a seamlessly interlinked trio when it comes to the pursuit of success. And given the pace with which they are racing ahead, world number two doesn’t seem so far, after all!