After making strong inroads into overseas markets through its innovative product portfolio, Elgi Equipments, one of the top 5 manufacturers of air compressors in the world, has decided to strengthen its foothold further by bolstering its distribution/maketing network to take on global peers in the multi-billion-dollar air compressor market. The company, which has strengthened its back-end by starting manufacturing machines, parts and processes on its own to make air compressors more energy efficient than global majors, has now decided to strengthen its relationship with global distributors further with new product development and its proven delivery and service mechanisms, said Jay Varadaraj, managing director, Elgi Equipments. Speaking to the FE at the plant site in Coimbatore, Varadaraj said: “It is a matter of pride for us to establish our name and brand in the international markets over the last few years. By acquiring one company each in manufacturing and distribution areas, we could penetrate the US, Europe, Asia Pacific, Australia, Africa, Thailand markets with ease. We have achieved certain standards to make it big in the global markets. We are replicating our back-end success in the front end to further penetrate the international markets.”
“Our decades-old innovations and manufacturing capabilities enabled us to strengthen our relationship with global distributors strongly. We are now seeing amazing response for our products from the distributors and they are ready to carry our products now. It’s a great validation for us. In fact, we could muster 50% of our total revenues from our overseas markets currently and we hope the same will go up to 70% in the next few years,” he said. According to him, “Our ambition is to double the revenue to $500 million next fiscal and then take it to the $1-billion mark over the next few years. For which we are gearing up with both new products as well capacity expansion in due course of time.”
To a specific question on overseas acquisitions, Varadaraj said: “We are happy to have made two successful acquisitions in the last few years — one each in manufacturing and distribution in the US and Europe. We don’t need any technology, brand or any manufacturer now. Since we make most of the inputs go into air compressors on our won, we only look at acquiring a company or companies which will give access to more markets as well strong distribution network and servicing. There is a huge opportunity for such acquisitions and we may go for another acquisition in the near future.” He said the company wants to be the No. 1 in producing energy-efficient air compressors across all applications and the process to make it possible has already begun. He added that the company will also start making valves as well new motors on its own to suit its products. These products are being sourced from global markets and have to be tweaked to suit the company’s air compressors and hence the company has decided to make on its own.
The company has three manufacturing facilities — India, Italy and the US — and has 200 distributors worldwide. It does business in 70 countries and has a production capacity of 9,000 tonne per annum. It can produce 15,000 screw air compressors per year and 25,000 pistion compressors per year. Elgi is one of five companies in the world to design and manufacture proprietary oil-free air-ends. Elgi gets half of its revenue from outside India and 60% of its international revenue from Europe and the US. It offers over 400 compressed air systems from the large centrifugal compressors to the world’s smallest screw compressor, and a complete range of air compressors from 1HP Piston to 2,000 HP Centrifugal Machines.