Interview “With Stringent Environmental Regulations, Oil Free Air is a Top Priority.”
Elgi specialises in industrial air compressors and has a presence across 120 countries. Dr. Jairam Varadaraj, Managing Director, Elgi and Chris Ringlstetter, President, Elgi - Europe share their views on the global air compressor market, their latest innovations and the potential business opportunities for the company in the background of the EU Green Deal. Read on to know more…
What is the current market scenario of the global air compressor industry?
Dr. Jairam Varadaraj, Managing Director, Elgi:The global air compressor market was estimated to be 15 billion dollars with a forecasted CAGR of about 2 – 3 % year on year, pre-Covid 19. The pandemic has caused significant impact world-wide. However, we are positive about the upsurge in industrialisation globally, as we move ahead to recovery. Industrial investments together with infrastructure projects and swift urbanisation will be just some of the growth drivers for the compressed air industry.
Escalating concerns about sustainability and building a carbon neutral future, together with government policies pertaining to energy conservation, will drive the adoption of energy-efficient air compressors. In a shrunk economic condition, customers are not going to be driven by brands, as much as by value proposition. For Elgi, this is advantageous as our value proposition is high; we expect to be strongly placed in terms of customer receptivity.
How is Elgi positioned to take on the world air compressor market?
Dr. Varadaraj: At Elgi, we believe in continually building on technology, products, process and people to achieve our growth aspirations. Since our inception, over 60 years ago, we have adopted innovation as a key differentiator, keeping pace with global compressor technology trends and evolving customer needs. And we believe our technological capability is a key foundation. Not just the know-how of technology but the know-why of technology pertaining to the core elements and critical parts of the compressor.
Today our 400+ product range offers customers across the globe a complete range of compressed air solutions. We are directly present in over 20 countries and a global footprint spanning over 120 countries across the world, our state-of-the-art manufacturing facilities are based in India, Italy and the USA, we are possibly the only company in the world to make our own air ends, pressure vessels, castings, motors and conducts complete machining and compressor assembly.
Elgi has recently launched its new AB (Always Better) Series. What are the unique features and benefits of this series?
Chris Ringlstetter, President, Elgi Europe: With increasing air pollution concerns and stringent environmental regulations, oil free air is a top priority, but companies have historically suffered the constraints of high cost and low efficiency in order to have oil free air. The Elgi AB ‘Always Better’ series is a disruption in oil free compressed air technology, offering customers a no-compromise, oil free solution at approximately 8 – 10 % reduced lifecycle costs when compared with prevailing oil free technology. With significantly lower maintenance and ease of use, customers will also be assured of reliable, high air purity for sensitive industry applications.
The AB Series plays a significant role in Europe. According to Food Drink Europe (the trade organisation representing Europe’s food and beverage industry), this vertical in the EU alone employs 4.72 million people, generates a turnover of 1.4 trillion dollars, and is the largest manufacturing industry nourishing a population of nearly 450 million Europeans. It requires Class-0 (oil free) compressed air meeting ISO standard 8573-7 (insuring against colony-forming microbiological organisms such as yeast, bacteria and endotoxins) and our AB Series compressors complies with both of these requirements. We have witnessed strong adoption of our AB range in the pharmaceutical industry on account of the compressor’s high reliability coupled with the lowest life cycle cost in the market.
In 2019, Elgi established its new European headquarters. What are the potential business opportunities for the company in this market in the background of the EU Green Deal?
Ringlstetter:We embarked on a journey almost 2 years ago in full knowledge that Europe was one of the three largest compressed air markets in the world. With a well-established product portfolio and increasing investments in the region, we are optimistic about the opportunities, and therefore plan to continue our investments in the region by expanding our presence. As for the Green Deal, high energy prices are causing companies to move to highly efficient compressors, and companies are purchasing our equipment in order to help them meet their efficiency improvement goals.
The Green Deal and subsequent environmental policies that follow will also put in focus Elgi’s Heat Recovery Systems (HRS) which provides companies with a system that captures up to 96 % of wasted heat generated during the compression process. The system converts wasted heat into hot water that can then be utilised for heating purposes. This in turn reduces the need for additional heating systems running on conventional power thereby reducing CO2 emissions. Our HRS are best suited for customers within the process industry producing products such as sugar, food and beverages, pulp and paper, dairy, and textiles.
What are Elgi’s plans for the future?
Dr. Varadaraj: To accomplish our growth goals globally, our strategy includes in addition to organic growth, business acquisitions across the world with specific focus on India, Europe, USA, Australia, Indonesia and Thailand. Our recent acquisition of Michigan Air Solutions and incubating new distributors in key markets will strengthen our presence in the North American market. We are continuing to strengthen our sales, service and channel partner network across Europe. On the value proposition dimension of strategy, we are focusing on innovation centered around energy efficiency and oil-free and quality to be the best in the world.