Elgi Equipments: Developing Breakthrough Technologies
What factors would you attribute to Elgi’s growing success in providing energy-efficient compressed air solutions?
Elgi manufactures a vast range of innovative and technologically advanced compressed air solutions for various industry applications. With strategic initiatives and technological advancements, Elgi has expanded its share globally. It has earned accolades for its customer-centric approach and sustainable energy-efficient compressed air solutions. In the times of oxygen crisis in the country during the 2nd wave of Covid-19, Elgi amplified its capacity to supply air compressors to oxygen generators.
We are now working on building highly energy-efficient electric driven portable compressors, as the increasing fuel and diesel prices is becoming a major concern for all. We are working on technologies like replacing oil with water, which will make our compressors more energy efficient and carbon friendly - in line with our goal to become world’s number one provider of energy-efficient solutions. These are breakthrough kind of technologies that we are continuing to invest in. We are now amongst the top three, and in almost 50% of the models we are number one.
In terms of our design capability, technical know-how, manufacturing, and quality, we would be second to none in the market worldwide; but in terms of market position, we are at around number 7. It’s been a long journey because we are an unknown brand with a ‘made in India’ label. However, we have demonstrated through the years that we are competitively strong.
Please share some of Elgi’s recent innovations for the construction and mining industries.
Compressed air is used in construction and mining at multiple levels, and across various applications. In mining, it is used for blue metal quarrying, marble quarrying, granite quarrying, sand mining, and in coal mines for their blast hole drilling. Most of the compressors used in construction and mining are engine driven as opposed to motor driven in the industrial sector. In an engine driven compressor, the increasing fuel and diesel prices are becoming a huge cost for our customers. To tackle this problem, we have been working on building highly energy-efficient engine driven portable compressors.
Also, a lot of the mining customers have now got industrial status, especially in states like Rajasthan; so they can now get electrical connection from their respective state electricity board. With electricity as a primary source of energy instead of diesel, you have a huge value proposition in terms of lower cost. Keeping this in mind, we have developed a full range of portable compressors that run on electricity and help in cost reduction.
What are the competitive features of Elgi air compressors that help customers optimize the lifecycle cost of their air compressors, and how sustainable and carbon-friendly are they?
Around 75 to 80% of the lifecycle cost is the cost of energy - whether it’s diesel in a portable compressor or electricity in an industrial compressor. Hence, to tackle this issue, we have developed a full range of portable electric compressors to help our customers in the construction and mining industries in cost reduction.
In terms of carbon footprint, most compressors are lubricated, which means there is oil in the system. And even though we do a lot of separation of the oil before that, the air that goes out into the customer’s application still has oil carry-over of around 1-2 parts per million. If you take all the compressors working in the world and calculate the total amount of this 1-2 PPM of oil, it will be 2 million liters of oil per year, which is a lot. In view of this concern, we have made sure that our compressors have the lowest oil carry-over, which is less than one PPM, unlike our competitors which have 2-3 PPM of oil carryover.
About two years ago, we launched our disruptive technology, the AB series, which is water injected, which means that instead of oil, it is water that runs in the system. More importantly, we do not rely on municipal supply of water; rather, we extract it from the atmosphere. It is a self-generating and self-sustaining machine. This makes our compressors more carbon friendly.
When would you recommend a VFD with the compressor?
Variable frequency drives are good energy saving tools for customers who have variable demand of compressed air. In a constant demand of compressed air, like in a process industry, variable frequency drive is not required. Basically, you have to be careful about choosing the right kind of solution for the system.
We do a comprehensive air audit for the customer to identify the most efficient solution for their systems. It could be a modulation system, a variable frequency drive system, or a master slave controller system for the various compressors that they have.
If a compressor does not shut down very frequently, and runs constantly, then having a soft starter is not necessary because it will start maybe once a day. But if it is constantly starting and stopping, then either a VFD or a soft starter (depending on the load pattern) will be the right solution.
What are your plans to further expand your market share globally?
Our strategy is to define clearly where we want to play in a focused strategic manner. We have picked six specific geographies to work on strategically in terms of deployment of capital, talent, and leadership.
About 5 or 6 years ago, we identified Australia, Indonesia, Thailand, India, Europe, and North America as the markets we wanted to focus on. It meant that we would invest a disproportionate amount of leadership, time, money, and people in building these pockets. For instance, in Australia, we acquired Pulford about three years ago; and set up our own sales and distribution network. Today, we have 50 to 60 people working in this country.
In Indonesia and Thailand, we are in the process of building our team. India is a home market and since it is strategically very important, we are growing our share across all the products.
In 2012, we acquired Rotair in Europe, which gave us the focus in Italy, though we were already doing some business in France. By virtue of the success that we had in Italy from 2012 to about 2019, we decided to expand our presence across Europe. Except for Germany, we are now present in all European countries where we have 150-160 people working for us.
We entered America through the acquisition of Patton, a distribution company, in 2012, and we set up a direct sales and service network. We now have close to 150 people employed in America.
What demand do you foresee in India’s air compressor industry in the coming years?
The pandemic has kind of paused industrial investment in many sectors. Once it restarts, there will be a trickle-down demand for compressors, because we are part of the capacity building process. In fact, the government has planned huge investments for building infrastructure like roads, airports, dams, bridges, etc, so we expect to see a spike in demand for compressors - be it for construction activities or for mining. Overall, the build-up of both industrial and social infrastructure of the country will increase the demand for compressors.
Because of the pandemic, almost all the economies have flattened out in terms of GDP - many have hit the bottom; but the economy is going to start climbing up once investments resume. The government programs for revitalization of the economy are going to result in more investments. In fact, I see this pattern across the world – and all this will be good for the air compressor industry.
Elgi has helped the country fight the oxygen crisis by making Oxygen Generators. Please elaborate.
Nobody could have anticipated the intense infection rate that transpired in the second wave of Covid-19 and the unprecedented demand for oxygen. Since the cryogenic process of generating oxygen is a long and expensive process, we decided to make oxygen generators instead.
The oxygen generator, compared to a cryogenic process, is a pressure swing absorption process. We take ambient air, compress it and put it through a swing of pressure, at which point, different gases in the atmosphere (nitrogen, oxygen), behave differently at different points of the pressure swing, and they separate.
We then use a special absorption material which absorbs all other gases at a molecular level. They are of different sizes, so only oxygen molecules are allowed through. This is how the oxygen generator produces oxygen. Typically, the purity level of oxygen required for breathing is not as high as what is required in an industry. A pressure swing absorption can effectively produce it.
I am happy to say that we have exceeded our commitments to Elgi’s business growth and to the society at large. And we hope to continue to do so in the future as well.
NBM&CW July 2021
