Elgi Equipments, which is targeting to double its turnover by 2020, is looking at acquisitions outside India as part of its growth strategy, according to a top official.
“We are up there on technology, we need to acquire [companies] to get customers,” Jairam Varadaraj, managing director, Elgi Equipments, told The Hindu
“That will be our emphasis on acquisition. We have started the process. It takes time,” he added.
New products
The company is also open to acquisitions to bring into its portfolio products that might not be part of core business (air compressors) of Elgi but will help widen its product offering, he said. By 2020, when the company reaches the milestone of doubling its turnover, it would derive 35% to 40% of foreign revenues, including exports. “We want to be a global company that also does business in India,” he said. Mr. Varadaraj also said that India was a key market where Elgi had a strong presence. However, there were opportunities to grow further. The economy, too, was on a positive track.
In the last two years, the company had introduced new products across sectors to leverage the opportunities. Almost all these products had inbuilt IT-driven technologies such as IoT. Compressed air is used in all industries. Sectors such as foundries, steel plants, forgings, food, and FMCG were doing well, offering scope for growth. The compressor industry had been growing for the last two years and as long as there were no disruptive policy changes, growth would be there, he said.
Elgi was investing selectively in its units. “We are integrating backward on select range of motors. We hope next year we will get into production for captive use.We are investing for plant capacity balancing. We continue to invest in machine-building capabilities as we design and build some of our critical machines,” he said.
