ELGi determined to make impact on the industrial compressor market

Being a lesser known brand in a competitive industry can be an issue. But if there is a sure way to prove to an industry that you are serious about being a point of difference, while also trying to build your brand, then winning a prestigious award is a good start.

That is what happened to ELGi, the Indian-based manufacturer of high-quality industrial air compressors. When the biggest competitor is German engineering in the form of Kaeser, it can be a hard row to hoe when trying to convince potential clients about the comparitive benefits of your gear. However, winning the coveted Deming Prize for Total Quality Management – the first industrial compressor manufacturer outside of Japan to win the award – goes a long way to show how committed ELGi is to making a dent in the market, including in food and beverage manufacturing plants in Australia.

Having bought Pulford Air & Gas and its subsidiary Advanced Air Compressors in 2018, the company has an ambition to become the second biggest compressor company in Australia.

It concedes that number one, Atlas Copco, is almost unreachable, but the company is keen to get higher on the ladder. ELGi national sales manager, Greg Gillespie, and business development manager, Brian Vegh, both know that they have a hard job ahead of them going from sixth in the pecking order up to number two. However, they also have a belief and confidence that the product not only has the ability and technology to do the job, but the manufacturing process is second to none.

“Atlas Copco is the Empire State Building on the graph you see on a piece of paper,” said Vegh. “We are number six at the moment, but there is not much difference between number six and number three.”

And in order to get up the pecking order, ELGi’s strategy is to espouse the benefits of its products such as the standards they are manufactured to, and the importance of the total quality management measures it has in place when it manufactures the compressors.

“ELGi compressors meet every international standard that any other company meets,” said Gillespie. “They control 100 per cent of the manufacturing process, from the sand they collect for the castings right through to the final product.”

Both Gillespie and Vegh know that there is a perception that compressors not manufactured in the US and Europe are somehow not up to scratch. This is why the company introduced Total Quality Management processes, which culminated in winning the Deming Prize in 2019. Not only that, the company has so much faith in its compressors it offers a 10-year warranty, something most of its opposition don’t do. There is also the perception that their compressors are made to Indian standards, which can sometimes be at odds with Australian regulations.

“A domestic product in India will have a metal starting box on it, which is acceptable over there, but you can’t have a metal starter box here in Australia,” he said. “The ones that arrive on these shores are all up to Australian standards already.”

Two of the key attributes of the compressors are the aforementioned 10 year warranty and their operational efficiency. Gillespie said the efficiency is about 10 per cent better than most similar products that are on the market. There is a reason for this.

“ELGi manufactures all the main components themselves. They mainly use Siemens motors and contactors,” said Gillespie. “We manufacture our own air end, which is the most expensive part of the machine – from the sand to the finished product. The design work they put into the air end to make it more efficient is top notch.

“Then there is the efficiency. Over a five year period, the cost of compressed air is 85 per cent of the cost of electricity/power. If you get a machine you start talking about 200kW of installed compressed air, and they run 24/5 days a week or 24/7 – which is anywhere between 5,000 and 8,000 hours a year. We can supply customers with a machine that is going to be anywhere between 3 and 8 per cent more efficient than some other machines out there. That is a lot of money over five years.”

The most expensive part of compressor is the air-end, which is important when it comes to the 10-year warranty. This is the actual screw where the air gets compressed, and in the case of ELGi, it is one the company has designed itself. It is for this reason they are happy to offer such a long warranty period for their compressors.

“We have heard of situations where only a 12-month warranty on air-ends was offered,” said Gillespie. “The warranty ended on midnight of that day. If it failed the next day, you have got nothing. Absolutely nothing.”

And how suitable is the company’s range for the food and beverage industry? When you’re talking its oil-free range, they are perfect, said Gillespie.

“When it comes to working in food and beverage, our compressors are Class 0,” he said. “With the quality system we use, everything is 100 per cent trackable and traceable. If you open up a machine you will see every screw, nut and bolt hallmarked in yellow.”

“That means every part has been checked. Every single one,” said Vegh. “If you have been in the factory, everyone who works at the foundry is on a production line. They go through a comprehensive checklist when the machines are being manufactured.”

The company is also aware of the impact its manufacturing will have on the environment and have measures in place to make the least amount of impact as possible.

“The sand they use to do their casting will only come from a reputable source and they recycle over 90 per cent of it because of the environmental issues,” said Gillespie. “It is also cost-effective. They’ve built the plant around that supply so they only have to use the minimal amount of sand they need.”

Finally, there is the back-up service that is available. Both Gillespie and Vegh point out that while the product is very good, if there are not people on the ground to help customers, then that can cause a whole range of problems.

“One of the hardest issues with industrial compressors in Australia is retaining and getting good service personal,” said Gillespie. “Most of them started out as fitter and turners. That is what I started out as and there are not of lot of us that stay on the tools their whole career.”

He believes one of the reasons it is hard to employ service technicians are the specifications of the job.

“Being a service technician means you are on the road a lot,” said Gillespie. “You have to like that. Some guys get sick of the travelling and driving. You have to be very autonomous.
“You do routine maintenance of products but then you have to walk into a business where everybody is looking at you. There’s 30 people standing out on the street like there is a fire drill waiting for you to fix it for them. When that machine is down, the down time is so costly to a company they want it fixed now. And some tradies are just not interested.”
Vegh reiterates that you can’t underestimate the back-up service.

“Some of the bigger air compressor manufacturers, for want of a better description, are just selling boxes. That is all they do,” he said. “Once that is done, they are onto the next customer and that’s it. One of our biggest selling points is our after sales service. We have the Advanced Air and ELGi distribution network. We have 52 service technicians nationally, as well as New Zealand.

“If you need help at 11.59pm just before the whole country is waiting for the fireworks to go off on New Year’s Eve or 9.32am on Christmas Day, we will be there to help you. It’s the 24/7, 365 days a year help and support that we pride ourselves on. Selling a compressor is not the hard thing, it’s what you do for the customer in three years’ time that makes a difference.

“Each person who works in the plant prides themselves on the quality of the product.
“We have a rigorous checking process here in Australia when it comes to the ELGi gear we bring into the country. If it is not up to scratch we send it back.”