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Dr Jairam Varadaraj, Managing Director, ELGi Equipments Limited

Image: ELGi Equipments Ltd

Energy-efficient compressors “Aligning to disruptive technology”

Jul 19, 2017

According to Dr Jairam Varadaraj, Managing Director, ELGi Equipments Limited, the Asian markets are the key growth drivers for the air compressor industry today. In an interview with Megha Roy, he highlights the current trends in the industry and briefs on the company’s strategies resulting in an optimum power consumption. Excerpts…

How do you view the trends in the air compressor market in India and globally, in terms of the industry performance, demand, growth prospects, technology developments, etc?

From a customer perspective, India is a maturing compressed air market when compared to markets, such as the USA and Europe. Specifically, there is more emphasis in western markets on areas such as energy efficiency, air quality, and service. Indian customers are starting to demand such attributes and, thus, it presents an opportunity for us to work towards this.

Technology follows these customer trends. For example, compressors with Variable Frequency Drives (VFDs) that adjust motor speed according to air demand thus saving energy, are becoming commonplace in the USA and Europe, while they are still to gain widespread traction in India. Oil-free screw compressors, by virtue of their lower service requirements and air cleanliness, are replacing oil-lubricated screw compressors across many industries. Both these technology trends will become prevalent in India.

From a growth perspective, India, China and other Asian markets will be the key growth drivers owing to both capacity expansion and the emergence of new industries. Western markets are more stable and, thus, conducive for customers to replace their older machines with newer and more efficient machines.

As recently announced, how do you strategise your plans to bag the Number 2 position in the global air compressor market by 2027?

We have spent the last fifteen years developing our technology and competence to compete with the best. Now, our challenge is to increase the distribution of our products in our key markets. With a strong position in India, our focus will be on markets such as the USA and Europe. We believe that achieving our goal will require a combination of organic and inorganic initiatives. We will grow organically by understanding customer behaviour in each market and tailoring our solutions accordingly. We will also consider acquisitions that will fast-track our presence in the markets.

Given that energy cost is the highest component in the lifecycle cost of a compressor, can you detail on your company’s strategy to reduce the consumption of energy in this industry?

Improved energy efficiency derives from better technology and better understanding of customer applications. With regards to technology, ELGi’s screw compressors run large airends at slow speed to produce compressed air. An airend is the heart of a screw compressor and it comprises of two screws that rotate in opposing directions. Their rotation draws a volume of compressed air and compresses it to a required pressure. The size of the screws determine the volume of air. ELGi’s Airend design employs large rotors rotating at low speed, which offers high volumetric efficiency, thereby, resulting in the lowest energy consumption. While we already offer motors of efficiencies ranging from IE1 to IE4, for the next stage of efficiency, we are working on motors that are custom matched to our Airend size, which allows for optimum power consumption. Finally, our machines are designed with variable frequency drives (VFDs) that help save power during fluctuating air demand.

We believe that energy efficiency starts with understanding the customer. Often, we find that manufacturers sell larger than required compressors to customers. As a result, customers suffer high energy costs. As manufacturers, we believe it is our responsibility to right size customers for their compressor requirements. Thus, we have invested in training of our sales team to study customer applications and recommend the right size of compressors.

What are the current capacity utilisation levels at the ELGi plants? How much do exports contribute to the overall business of your company?

While we cannot comment on our capacity, we are well set up to achieve our growth targets. More than 50% of our revenues accrue from our global markets, with 30% stemming from the USA and Europe, which represent the most demanding markets in terms of quality and efficiency.

Manufacturing enterprises have increasing focus on optimising performance, productivity and asset management as well as an effective technology management. What is your approach towards this?

Specific to technology management, we believe that our future success will rely on disruptive technology. Thus, we have an extensive technology roadmap that is focused on building the compressed air system of the future.

What are the manufacturing practices and advanced technologies adopted in your company that are helping the company to achieve competitive excellence?

We would like to focus on two examples. With regard to manufacturing, we employ a supplier integrated production system that allows us to maintain low inventory levels, thereby, enabling us to provide the highest quality at the lowest cost. As a second example, we have vertically integrated our operations for greater quality control. We have a foundry that supplies nearly 400 different varieties of casting for our products. We have also custom-built machining centres to manufacture our airends. Our machining centres allow for higher productivity and better quality.

How do you think are the advanced technology adoption levels in the Indian manufacturing industry, such as Industry 4.0, IIoT, etc? What kind of challenges do you see in this area?

We have already equipped our machines with data transmission capabilities that will allow ELGi to monitor key machine parameters, such as energy consumption, temperature and air usage. The data will allow us to improve quality and predict any failures. The challenge with this system is determining the level of information that is to be shared with the customers so that it is meaningful and not excessive.

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