22 Sep 2017 20:12 IST

ELGi Equipments: Flying high on compressed air

The seventh largest manufacturer of air compressors in the world shows no signs of slowing down

As children, we all regularly stood in attention in our school uniforms, saluting the national flag. It was always an uplifting feeling to see the flag climb up the mast, unfurl gracefully and flutter in the wind. But often, when there was no wind, the flag limply hung down and somehow, it did not have the same majesty.

Well, those days are over! Coimbatore-based ELGi Equipments, the world’s seventh-largest air compressor manufacturer, claims that at its factory, it has made the flag fly all the time with a ‘low energy sustainable compressor’. Since the technology is being converted to fit any flagpole, we may soon see the Indian flag flying constantly and gracefully, sans wind or breeze.

That’s interesting news, right? But what kind of technology makes this happen?

‘Compressed air’ is basically air being under more pressure than the surrounding atmosphere. Essentially, it is a catalyst for the transfer of energy. It is a product of great utility, as important as electricity or water, and is an absolute necessity in almost all factories, such as manufacturing air conditioners, refrigerators, automotive plants, food processing factories, defence, textiles, electronics, quarrying, water well-drilling, manufacturing cement, paper, wood, steel, air separation, oil and gas, and sand blasting. It is safe to store, and has myriad applications. And air compressors produce this essential product.

Serendipity

ELGi Equipments, launched in 1960, is among the best-known manufacturers of air compressors, both in India and abroad. It was originally a bus transport venture at Tiruppur by LRG Naidu (he is supposed to be one of people who revolutionised bus services in Coimbatore).

His son LG Varadarajulu, an automobile engineer, joined him in running a fleet of buses, maintaining and repairing engines. and building bus chassis. They are said to have later ventured into running an airline company (subsequently nationalised) and tried their hand at several businesses, including breweries, drip irrigation systems, washing machines, lifts and inflators (for servicing cars).

It was a serendipitous occurrence that brought about the entry into the air compressor manufacturing business. Word is that when customers started asking for a small compressor to inflate their vehicles’ tyres, ELGi started making piston compressors by obtaining the license from a German company. This soon led to them designing and manufacturing their own air compressors and developing an automotive services division (the latter is a subsidiary known as ATS ELGi).

 

Today, ELGi Equipments has a presence in about 70 countries with a portfolio of more than 400 products. It has manufacturing facilities in India, Italy and the US; and warehousing facilities in Brazil, the Middle East, Australia and the US.

It has 13 branch offices and a global support centre in India for building long-term relationships with its customers through commitment and investment. In fact, ELGi “believes in constant communication with its customers to understand changing needs” and designs its products accordingly.

Make in India in the 1990s

Between 1983 and 1988, ELGi mastered the technology of manufacturing rotary screw compressors indigenously. By 1990, it had developed (for the first time in India) the rotary screw type vacuum-exhausters, followed by high pressure compressors for naval applications, MKB high pressure compressors for defence warships, and compressors for drawing water from borewells.

It obtained the ISO 9001 certification by TUV, the world’s most admired quality improvement standard, in 1997 (It also holds the ISO 14001:2004 and BS OHSAS 18001:2007 certifications). It continued to innovate and develop new products, coming up with the world’s smallest screw air compressor in 2002 and the first oil-free screw air compressor in 2011.

ELGi’s product range has expanded beyond reciprocating and rotary screw compressors to include centrifugal compressors, filters, dryers and lubricants.

It is one of the few companies in the world capable of both designing and manufacturing air ends (the core of the compressor) and compressor packages. Its advantage lies in the fact that it has its own foundry for manufacturing castings, its own milling machines for grinding and milling, and its own motors for manufacturing compressors.

Its R&D labs have the latest simulation software to check products in (virtual) real world scenarios. No wonder then that it churns out close to 14,000 air ends a year. The air ends are branded ‘Axis’ and come with a lifetime warranty.

Innovations

The company is very strong on fundamentals. All of ELGi’s products undergo strict quality, performance, reliability and durability tests in atmospheric-controlled rooms to ensure compliance with international standards. The products are eco-friendly; ELGi has the lowest oil carry-over in its compressors.

The company has developed its own business model — the ELGi Business System or EBS. The ELGi core values of collaboration, cost-prudence, sensitivity, innovation, integrity, quality, and speed are inculcated in the employees through EBS.

The company also offers air auditing systems and control systems. ELGi will supposedly soon launch Air Alert, a SIM card-based Internet of Things (IoT)-enabled compressor, as a standard feature.

A strong sales and service network across the country (there is supposed to be a dealer or service centre every 60 km) offering breakthrough technology and predictive maintenance, respectively, are key factors in ELGi’s success. The fact that they offer the best warranty in the industry and are also prompt in providing service and spare partsonly makes the company that much more favourable.

Giving back

The founders of ELGi had a civic-minded outlook long before CSR became a buzz word. As far back as 1946, they opened a school (still functional and consistently getting 100 per cent results) called Sri Ramaswamy Naidu Vidyalayam at Lakshminaickenpalayam, near Coimbatore.

As the company’s headquarters are in Coimbatore, it has focused on education, vocational training, community development projects and health in the surrounding areas for several decades. It has built halls for the aged, the destitute, and the mentally challenged.

The company also sponsored the construction of a waiting area for senior citizens and the differently-abled at the Bengaluru Railway Station. It supports a hospital and helps with the infrastructural requirements of many schools. It also runs a school and hostel for differently-abled children.

To handle these social welfare schemes, the ELGi family members have established several dedicated trusts such as the ELGi Public Welfare Trust, the Ellargi Trust and LRG Foundation, the LRG Naidu Educational Trust, the Silver Jubilee Trust, among others.

Singular focus

ELGi is a single product company in that its focus has always been on air compressors, their improvement and applications. The year 2015-16 saw the compressor business account for 86 per cent of total sales and 89 per cent of the profits. The turnover is said to be around ₹1,500 crore, with 50 per cent of it coming from outside India.

To focus on its goal of remaining at the top in India and also advance rapidly on the global stage, ELGi is trying to grow both organically — through new developments and innovations; and inorganically — through strategic acquisitions.

It recently went in for a complete re-branding, with a new colour scheme and logo. The company is reportedly targeting a revenue of ₹6500 crore in five years, and the second position globally in 10 years.