ELGI expanding globally
Coimbatore-based Elgi Equipments (EEL), which manufactures air compressors and automobile service station equipment, is going global. It has informed BSE about its plan to launch subsidiaries in Sharjah free trade zone and Brazil. “We have a proposal to start a wholly-owned subsidiary in these countries and got the board approval. However, the contours are still under discussion,” a company official said without disclosing further details. EEL will also be setting up an assembly unit in China. This is because the Chinese compressor market is four times bigger than the Indian market although profitability is same as Indian market. EEL will source raw material from local Chinese suppliers. This unit is expected to go on stream from FY 2009. The company is bullish on its compressor segment and is working on some new products as well as cost reduction measures in the large compressor segment.EEL is in the process of finalising a technology transfer contract for the oilfree piston compressors in the medium size. This will be with a European company and market size of the business is estimated to about Rs 15 crore. For the quarter ended December 31, 2007, EEL’s net sales grew at 24.8% to Rs 119.81 crore led by 24.9% growth in compressor sales of Rs 98.66 crore. Its net profit rose by 30.7% to Rs 12.31 crore. For the nine months ending December 31, 2007, net sales were up by 31.5% to Rs 357.01 crore and net profit spurted up by 69.4% to Rs 43.61 crore.
