By R. Natarajan, Managing Editor & Publisher, MOTORINDIA
The global oil-free air compressor market, estimated to be $3 billion, is expected to grow significantly with increasing environmental and cost considerations. Home-grown compressor maker ELGi Equipments, with its globally-proven indigenous technology and customer-centric approach, has made a mark in the world arena, coming up with cutting-edge products as per market needs and establishing a strong presence not just within India but also in developed overseas markets.
In an exclusive interview with MOTORINDIA, Dr. Jairam Varadaraj, Managing Director, ELGi Equipments, tells us about ELGi’s latest oil-free compressor series, global expansion plans and lots more.
Excerpts:
Please give us an update on the current market scenario. How is business at ELGi Equipments?
India seems to be going through some challenging times. With political uncertainty and the attendant tentative economic sentiments, there seems to be a “wait and watch” attitude among customers. We have to see how things pan out from June.
Investment by the government in road, rail, ports and dams has created a trickle down demand for our products serving the construction industry. We are looking at building a global construction/mining/drilling related compressor business.
Globally, our traction continues to be strong. Even with slowing down of industrial activity in some of the strategic markets, since our market share is so low, there is still head room to grow.
What kind of production capacities do you have at present? And where are your investments directed towards?
We have sufficient capacity to produce products as per the plan we have worked out and converted to annual aspirations. We build capacity at least a year ahead of the plan. Our major investment, if any, would be in the form of acquisition of distributors in our strategic markets. This is not something we control fully as it takes two organizations to agree to come together. Besides this, our focus would be building the talent required to execute our strategy.
How strong is ELGi’s presence in the global market?
We do business in over 100 countries, in 18 of them we are directly present with own sales and service capability and with manufacturing in 3 locations. Besides, we have strong acquired presence in the US, Europe and Australia.
How have your oil-free AB Air Compressor series and Air-Alert been received in the market?
Oil free compressors are used in specialized applications and traditionally these compressors have been significantly less efficient than oil lubricated compressors and substantially more expensive to buy and maintain than oil lubricated compressors. What we have launched – Oil Free. Disrupted – is exactly this. We have disrupted the traditional norm that oil free compressors are less efficient and more expensive to buy and maintain. Our AB (Always Better) Series of oil free compressors are significantly more efficient than conventional oil free compressors (almost close to oil lubricated compressors) and substantially more attractive financially to buy and maintain.
We will continue to push the envelope on the AB Series so that we eventually merge the current distinction between oil lubricated and oil free compressors. The reception for the product has been very encouraging.
IoT in the air compressor industry could potentially play multiple roles. Starting at the basic level of providing real time reports, it can go all the way to predicting failures. Current technology has been deployed more at the basic level.
Our IoT system Air~Alert is based on an affordable and reliable gateway, a robust data platform that can handle big data and a strong analytics engine that can help predict failures. We have installed more than 500 units in the field as pilot installations. We have collected large amounts of data and we are working on predictive analytics. We are progressively improving the algorithms to increase the percentage of failures that can be predicted.
We foresee a significant future for Air~Alert and see it as an integral part of our strategy to improve the value proposition to the customer of lower energy costs and lower downtime.
With Europe becoming a key market for ELGi, how are you updating your product portfolio for the region? Are there any Europe-specific products coming up?
While Europe as a whole is a big initiative, we have been operating in Italy for the past 5 years. And during this time, we have built products for the Italian market which are the same as required for the rest of the countries in Europe. And during this period, we have built a significant share of the Italian market which is evidence for the competitive capability of our products for Europe.
Please explain the key takeaways from your successful participation at the ComVac Hannover Messe 2019.
By launching the product in Hannover, we have been able to demonstrate our technological prowess in a highly competitive market. The reception for the product has been outstanding. Our key takeaway or challenge is no longer technological but to take the message of the product’s superiority to the distributors and users all over the world. This will be a different challenge from the past, where the challenge was more technology.
With air compressors being one of the lifelines of an automobile, how does ELGi Equipment contribute to the automotive sector?
Compressed air is used across most of the processes in the auto industry, from engine manufacture to assembling the vehicles, painting and cleaning. Pneumatic tools help create auto parts and power the machines that lift, position, transport, and fasten the vehicle’s components. Metal forming machines use compressed air to turn sheets of metal into critical vehicle components. Robots and factory workers using pneumatic fastening tools work with compressed air to assemble vehicle components. After vehicle assembly, dry oil free air is used for cleaning and painting. Auto Garages and body shops use oil free compressed air to operate their spray guns. Choosing the right size and type of compressor is critical for these applications.
ELGi’s EG Series, EN Series (Electric Lubricated Screw Air Compressors) and OF Series (Electric Oil Free Screw Air Compressors) are widely used in the automotive industry as they are highly energy efficient and come with low life cycle cost with reliability built on every component. These energy saving compressors provide quicker return on customer investments.