Coimbatore-headquartered Elgi Equipments is working towards emerging as a global brand. The company has set its sight on getting to the second position globally in the air compressor manufacturing space, next only to Atlas Copco Corporation, which at present the world leader.

Asserting that global giants in the air compressor manufacturing business have failed to build on technology, people and markets, Elgi Managing Director Jairam Varadaraj said his company has been investing quite a sum on all of this and more including manufacturing systems over the last 20 years. The company has established a new facility at Kinathukadavu near here.

“With the manufacturing systems, quality, integration and technology in place, all we need to do at this juncture is demonstrate our strength,” the Elgi MD said.

Technology for Elgi is no challenge, according to Varadaraj, considering that the company has managed to win over its competitors’ product on quality, performance.

Tech demonstration

The company plans to showcase the technological strength of its product range as “one of its kind in the world” within the next 18-24 months. “We want to demonstrate our technology on a very high emotional platform,” he said, preferring to elaborate at the appropriate time.

“There is huge opportunity for us to grow in this space, for only three companies – Atlas, Ingersoll-Rand and Elgi have been investing on technology,” he added. The global opportunity for compressors is estimated at $15 billion. “The entry barrier is simply the ‘unknown brand’ and ‘made in India’ label,” he noted. Having identified the barrier, the company started working around building Elgi as an international the brand.

“We embarked on this journey four years back. Our earlier strategy was to buy companies in different parts of the world, build the product — every inside part would be Elgi, except the outer frame — and market it as a local brand.”

“The reception for the product was good, but as brand we remained unknown. This coupled with the stigma of ‘Made in India’ is taking more time.”

Brand building strategy

The company has taken to brand building in a very unconventional way.

Explaining this, Varadaraj said “conventional methods would be to advertise, participate in trade fairs and expos and so on. And these are towards creating awareness. For us, the brand building is about every stakeholder’s experience with the brand – be it customers, employees, suppliers, distributors, investors and society.”

“This journey will take quite a bit of time, but we have a clear direction and the foundation is well laid.”

“A global enterprise is not one that is dependent on one country for comparative advantage. We have a long way to go.”

Diversification

To a query on diversification, he said “we will not do anything other than compressors. Global opportunity is huge in this space. We will nevertheless look at contiguous diversification to enhance the quality of our product, not as a separate business,” he said.

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