In 2019, all the way through Hannover Messe, you mentioned ELGi’s aspiration to transform the second-largest compressor producer globally. How do you assess development against that objective nowadays? Is it nonetheless a sensible ambition, and what drives your constant self belief on this imaginative and prescient?
At the moment, the quantity two and quantity 3 world air compressor producers have been impartial firms. Now, they’ve come in combination and shaped a considerably greater quantity two. So, our authentic objective of changing into quantity two through 2035–36 was once in line with that previous panorama. However now, leapfrogging a mixed quantity two is unrealistic.
Our revised objective is to be a few of the best 3—now not essentially quantity two, however indubitably within the best 3 through 2035–36.
The rationale we’re nonetheless calling it CK2, and now not CK3 (since there is not any CK3), is as a result of internally, we all know what CK2 stands for. You communicate to any individual within the corporation—they know what CK2 method. It’s the most important message and carries robust emotional resonance.
ELGi has at all times positioned a robust emphasis on backward integration to verify regulate over price and high quality. May you percentage any fresh traits or developments in this entrance?
The backward integration isn’t geared toward using incremental non permanent benefit alternatives. Let me provide an explanation for 3—or in reality, 4—spaces the place we’ve carried out backward integration.
The primary one is development our personal machines. Why did we do this? To not get some minor financial savings. In case you take a look at a compressor, about 30% of its price comes from the air finish, the place the 2 rotors and the casting are. That’s the center of the system. Now, all our competition—together with us—make the airend in-house. Maximum of our competition supply the remainder of the elements from outdoor.
To actually compete and transform the most efficient on the planet—now not simply by promoting low-priced machines—we had to make use of know-how as a key enabler. Out of that 30% airend price, about 90% comes from the rotors. And inside that, 90% is the price of machining. So successfully, about 20% of the whole compressor price comes from that one system.
How will we cut back that? There are most effective two or 3 producers globally that everybody buys from. Once we studied the ones machines, we learned there was once a strategy to design and construct them in the neighborhood the usage of our ability. So, we did simply that—and we constructed the system at one-fifth the associated fee. That introduced the associated fee down from 20% to simply 4%. Those are extremely strategic choices—now not made for non permanent financial savings, however to scale back price whilst additionally keeping up high quality.
If we had purchased inexpensive machines—say, from China—it will have compromised our functionality. So, we needed to handle high quality. That’s one instance.
We additionally make our personal drive vessels—the tanks. Why? As a result of a Ecu emblem can fail and nonetheless be forgiven. But when an Indian emblem fails—particularly relating to security—it’s by no means forgiven. A drive vessel is a safety-critical merchandise. So, we couldn’t take the danger of outsourcing it.
Despite the fact that it’s now not a high-value product—it’s necessarily steel forming and now not high-tech—we use complex production strategies like robotics to make it. That’s every other instance.
Then there’s the foundry. A foundry is basically a white elephant—it doesn’t make us any cash. However we nonetheless invested in it, figuring out that, as a result of casting high quality is significant. We can not have the funds for leaks. That’s the explanation.
Then there’s the motor. We have been purchasing motors from China for twenty years. Their landed price—after freight and tasks—was once nonetheless 30 to 50% inexpensive than Indian-made motors, and the standard was once higher. We have been shocked. So we dismantled the motors. A motor is basically steel—copper, metal, casting—no difficult electronics.
Once we analyzed the portions and their weight, we learned there was once no manner they may provide it at that worth except there was once some executive subsidy concerned. That’s a chance. We didn’t know when or if that subsidy could be withdrawn. Plus, the lead time was once 3 months, which intended excessive stock.
So, we requested ourselves: are we able to put in combination a group and use know-how—now not simply reasonable exertions—to make a motor that plays higher and prices the similar because the Chinese language product, at worst? The group did an impressive task. It took 3 years, however we constructed a motor that plays a lot better and prices much less. We examined it, proved it out there, and as soon as assured, we invested. Lately, we’ve expanded that motor vary—this 12 months, 80 to 90% of our motors are made in-house.
Once more, the primary reason why was once chance relief—now not essentially price. Price relief was a facet get advantages.
As for what’s pending now when it comes to backward integration? There’s not anything severe this present day. However past compressors, there are adjoining spaces—like dryers. We’ve advanced and globally introduced our personal refrigeration dryers. We’ll additionally take a look at desiccant dryers. The ones are extra horizontal expansions.
From being a robust Indian emblem to turning into a revered world participant, ELGi has completed vital global reputation. What, on your view, has been the core mantra for this world good fortune tale?
The core know-how in compressors hasn’t basically modified in a very long time. Maximum inventions nowadays are within the add-ons—electronics, instrument, conversation techniques, IoT options—which we even have in our merchandise.
However what we’re doing in our innovation group is basically wondering the fundamentals of compressor know-how itself. For instance, the product we not too long ago introduced—the Stabilizer—addresses the know-how at a basic degree. It’s now not simply every other add-on. And now we have fairly a couple of such inventions within the pipeline. I will’t speak about them but, however on the suitable time, we will be able to percentage extra.
So, we see two facets of our product roadmap: one is product building, which comes to embedding the most recent to be had applied sciences; the opposite is true innovation, this means that development what’s subsequent. This can be a primary center of attention for us.
Sustainability and ESG targets are turning into central to how trendy production firms outline good fortune. May you percentage how your company is integrating those ideas—in particular in spaces like calories use, water control, provide chain practices, and group engagement—and the way they align together with your long-term trade technique?
Other folks incessantly speak about sustainability and ESG targets. You’ve been to our plant and observed a number of of our projects to scale back waste and improve climate-conscious production.
To start with, our energy intake relative to our income is already very low. I consider it’s round 2%. However even with that low footprint, we see a chance to move absolutely inexperienced.
Lately, round 48–50% of our production electrical energy comes from renewable resources—each wind and sun. Our objective is to succeed in 100% renewable calories within the subsequent 4 to 5 years. And given our somewhat low calories wishes, that is fairly achievable.
Our moment primary initiative is water. We’ve dedicated not to drawing groundwater and now not relying on exterior water provide. As a substitute, we intention to be absolutely self-sufficient thru rainwater harvesting and water recycling.
Outdoor the plant, we’re additionally making sustainability a concern. A lot of our native provide chain companions have already switched to electrical or gas-powered automobiles for deliveries. Sooner or later, we intention for 100% low-emission logistics.
Even in our compressor design, our number one function is to scale back calories intake. The Stabilizer is one instance of ways we’re serving to consumers decrease their calories prices. We’re additionally running on more than one projects to make our compressors extra environmentally pleasant general.
Protection and inclusivity are each severe pillars of a revolutionary production atmosphere. From what I’ve seen on your amenities, there’s a robust emphasis on each. Are you able to percentage the important thing steps your company has taken to verify place of business security for all workers, and in particular, how you’re enabling girls to thrive at the store ground and in technical roles inside what has historically been a male-dominated trade?
Now, merging two essential subjects—plant security and ladies empowerment.
Protection is a best precedence for us. After all, now we have company-wide insurance policies and security protocols. However what in reality issues is making a tradition the place each and every particular person takes possession of security.
Every worker is chargeable for their very own security and will have to talk up after they see unsafe prerequisites. To improve this, we’ve advanced an app the place workers can document close to misses or security considerations. There’s additionally an nameless whistleblower platform for reporting power problems that haven’t been resolved. The speculation is to inspire comments and force steady growth in our security tradition.
On the subject of girls empowerment, we’re deeply dedicated to gender variety. That stated, it’s a problem in a mechanical engineering atmosphere to draw girls, in particular for store ground roles.
About 7–8 years in the past, we began a vocational coaching faculty on our premises. Within the first batch, now not a unmarried lady implemented. It was once most effective through the 3rd batch that packages began coming in, or even then, most effective when oldsters moved to Coimbatore with their daughters, because of security considerations and perceptions about manufacturing unit environments.
Lately, round 35–40% of our coaching faculty batch are ladies. Those younger girls at the moment are beginning to take over roles from retiring male workers. We predict that during every other 3–4 years, girls will make up about 30–35% of our store ground staff.
What, on your view, has been the important thing to evolving from a forged Indian emblem right into a globally revered identify?
For us, emblem power is constructed over the years. We’re now not the type of corporation that may sponsor an IPL group and be expecting rapid emblem reputation. Ours is an experience-driven emblem. The true query is: What’s the journey when any person interacts with us?
Whether or not it’s a buyer, an worker, or a provider—if the journey is truthful, sure, responsive, and respectful, that’s what builds emblem agree with. And in our area—capital items and mechanical techniques—it takes time. We’re now not promoting client merchandise. It’s a long-term adventure.
FY25 has been marked through vital innovation milestones for ELGi – from STABILISOR to the EG PM and EG SP collection. How do you notice those inventions remodeling buyer journey and reinforcing ELGi’s marketplace place?
FY25 has been a landmark 12 months for innovation at ELGi. Merchandise like STABILISOR, EG PM, and EG SP Sequence constitute the following technology of sensible, energy-efficient compressors. Those inventions are reshaping buyer journey—lowering running prices, improving uptime, and simplifying repairs. Extra importantly, they place ELGi as a technology-forward spouse able to expecting and responding to evolving commercial wishes.
With answers like Air~Alert and the Neuron 4 Controller, ELGi is embracing IoT and clever automation. How are those applied sciences redefining compressor control and operational uptime for purchasers?
Answers like Air~Alert and Neuron 4 Controller are redefining the best way consumers organize compressed air techniques. Thru predictive analytics, real-time signals, and far off tracking, we’re enabling upper uptime, higher calories control, and diminished general price of possession. Those don’t seem to be simply options—they’re value-driven applied sciences that lift buyer operations to Trade 4.0 requirements.
Given your in depth global footprint, how do you steadiness customization for native markets with keeping up a standardized world product philosophy?
Our product platforms are globally standardized for high quality, however our engagement is hyper-local. We’ve arrange regional utility engineering groups that tailor our answers to native necessities—be it climate-specific configurations or regulatory compliance. This twin manner guarantees we handle world integrity whilst resonating with native marketplace wishes.
ELGi has introduced specialised merchandise just like the PG 850S-290 for harsh drilling and mining prerequisites. How essential is segment-specific product innovation on your enlargement technique?
Phase-specific innovation is essential to our enlargement technique. The PG 850S-290 is an ideal instance of ways we reply to distinctive trade demanding situations—like harsh drilling environments. In a similar way, we’ve advanced customized answers for sectors like prescribed drugs, meals processing, and textiles. This intensity lets in us to supply purpose-built, high-performance answers that stand except for generic choices.
Taking a look forward, what are your key priorities for FY26 and past when it comes to product building, marketplace enlargement, and buyer engagement?
Our center of attention transferring ahead contains increasing our marketplace achieve in Africa and Latin The us, accelerating virtual transformation, and using innovation in oil-free and energy-efficient applied sciences. Product building will prioritize sustainability and sensible options. We additionally plan to reinforce buyer engagement thru higher provider supply, coaching methods, and virtual touchpoints. In the long run, our intention is to be identified now not simply as a compressor producer, however as a relied on spouse in our consumers’ enlargement trips.
Numerous younger other people nowadays are occupied with startups. But it surely’s no secret that development a producing startup is extremely difficult—particularly in comparison to instrument or services and products. Given your journey in development robust manufacturers and taking them world, what could be your recommendation to younger marketers popping out of IITs or IIMs who’re hooked in to production? What key steps must they center of attention directly to construct a robust, globally revered Indian emblem?
Something I’d strongly advise is—don’t simply reproduction every other product. In case you’re copying, your most effective differentiation is worth. And if you must promote it reasonable, then you must construct it reasonable. That is going in opposition to the very reason why maximum people paintings—to create cost, to develop, to earn extra.
To actually create one thing precious, you wish to have to innovate. And the place does innovation come from? It doesn’t at all times come from what the buyer tells you at once. Actual innovation incessantly begins with figuring out the buyer’s unspoken wishes—issues the buyer would possibly not even have the ability to articulate.
If you’ll be able to spot that hole and design an answer round it, that’s the place the actual transformation occurs. That’s how robust, significant, and globally related Indian manufacturers shall be constructed.
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