It’s been now 2 years since ELGi started to expand its footprint in Europe. In this interview with Chris Ringlstetter, we discuss the accomplishments realized during these 2 years and how ELGi is looking ahead, how the company managed in the COVID-19 times, how they do work with their channel partners and last, ELGi’s approach to meeting customers’ expectations and needs for compressed air solutions.
Chris Ringlstetter: Since February 2019, when we decided to re-enforce our commitment to the European market, we have built out a regional sales leadership team covering the key markets including: Benelux, UK & Ireland, France, Iberia, Italy & Southern Europe, Eastern Europe and the Nordics.
We’re delighted to have been able to attract the talent we did thereby allowing us to build a European leadership team from some of the most experienced compressed air industry experts. An example is my sales leadership team, each with an average of 25 years of experience in the industry. By combining the strengths of our people together with the quality and performance of our product portfolio, we strongly believe in our aspiration of becoming one of the top three global compressor manufacturers in the world.
The market has been receptive to ELGi as a new entrant since they like the fact that we build high-quality compressed air solutions that have one of the lowest total cost of ownership on the market covered by an industry-leading warranty program. We are also being recognized as a company that is easy to do business with, one that sticks to its word and avoids complexity. We have made a conscience effort to eliminate the “small print” in all our agreements so that our channel partners, end customers, and suppliers don’t have to be lawyers to understand what they’re signing.
C. Ringlstetter: With a well-established product portfolio and increasing investments in the region, we are optimistic about the future, and therefore plan to continue our investments in Europe by expanding our presence.
We have set ourselves an ambitious target as part of our ten-year plan, and in only two years, we have already built a strong distribution network. We now have a strong European leadership team as well as talented regional sales and support teams to match. We have more than doubled our Channel Partners in this time frame – further extending the reach of our products while ensuring excellent service support.
This translates into strong sales and increased market awareness. We continue to be right on course to significantly increase our market penetration, despite a market impacted by the pandemic thereby allowing us to achieve a higher market share.
C. Ringlstetter: The compressed air market in Europe is considered as a replacement market although, when the market recedes, an emphasis is put on repair as opposed to replacement of aging equipment. The Covid-19 pandemic has had a similar impact to the compressor industry in Europe, and while customers were postponing new equipment purchase decisions last year, we are confident that a correction in the market will follow the widespread introduction of efficacious vaccines.
As for ELGi, the events associated with the pandemic acted as a bottleneck in the short term i.e., we temporarily closed our manufacturing and logistics activities in Italy, but shortly after the first lockdown, we were operational again and have continued to see a steady recovery especially in the Food & Beverage, Pharmaceutical, Glass, and even General Industry verticals.
C. Ringlstetter: ELGi’s channel partner community is the backbone of our business. Strong partnerships with our distributors have enabled us to enter new markets, gain insights into evolving market needs, and serve customers better. ELGi has, in turn, helped its partners grow their businesses with innovative and technologically superior products.
We are looking forward to welcome new partners to expand our existing channel network in order to deliver on our commitment of being’ the Customers choice, everywhere. We keep growing our customer base, and build true relationships with our partners in order to gain more traction as well as increased market share across Europe.
C. Ringlstetter: The challenges we see are the same for us as they are for other industries. They include lowering the total costs of operating capital equipment while increasing reliability, serviceability, and ease of operation. At ELGi, we have leveraged innovation and technology to create a portfolio that delivers against each of these attributes.
I am personally proud to have been given the opportunity to create an organization in Europe whose objective is to create value for our channel partners and end users. No fine print, no tricks, just honest and ethical business practices, hard work, and commitment to our mission of gaining market share by the merits of our efforts.
C. Ringlstetter: Increasing energy prices are causing companies to move to highly efficient compressors, and companies are purchasing our equipment in order to help them meet their efficiency improvement goals.
In Europe, it has been estimated that 10% of all electricity from industry is used to produce compressed air accounting for 80 TWh/year. With the energy efficiency improvements ELGi has been able to introduce across its portfolio (ranging in recent years from 5 to 10%), these gains equate to a considerable reduction in total energy consumed across the region.
Since ELGi’s increased focus on the European stationary compressor market (which started in earnest only two years ago), we have made considerable inroads in the regions we chose to invest in thanks in part to the fact that we build high-quality compressed air solutions that operate at one of the lowest Life Cycle Cost on the market today.
We also back our equipment by industry-leading warranty programmes. We are able to do this thanks to the skilled and talented individuals we have working in our Engineering and Product Management departments whose main focus is on building the highest level of quality into our compressed air solutions that help organisations lower energy consumption and operating costs.
Additionally, our technology team focuses on achieving advanced breakthroughs aimed at transforming the conventional boundaries of compressor technology with a relentless passion for increasing performance and energy efficiency.
C. Ringlstetter: At ELGi, we focus on building the most efficient compressors which ensure efficient energy consumption and thereby lower energy costs for all our customers. This is reflected not only in our EG Series, but across our entire portfolio. We also focus on ensuring zero downtime for our customers via a relentless focus on quality, reliability, and highly responsive services. With this, our compressors stay up and running thereby helping our customers achieve their productivity goals while keeping the costs of ownership low.
There are very few compressor companies in the world today that have the capability to design their own air-ends, and even fewer that make them along with their own pressure vessels, castings, motors while also conducting complete machining and compressor assembly. ELGi, with in-house technology and manufacturing capabilities for all these various elements, can engineer compressors to deliver maximum uptime and reliability, and in turn ensure energy-efficient compressed air for all demanding applications.
It’s worth mentioning that ELGi’s Heat Recovery System (HRS) provides companies with a solution that captures up to 96% of wasted heat generated during the compression process. The system converts wasted heat into hot water that can then be utilized for heating purposes. This in turn reduces the need for additional heating systems running on conventional power thereby reducing CO2 emissions. Our HRS is best suited for customers within the process industry producing products such as sugar, food and beverages, pulp and paper, dairy, and textiles. In other words, companies requiring compressed air and hot water for their process and heating needs. However, general industry can also benefit by using preheated water for their boilers, as well as hot water for showers and sinks.
C. Ringlstetter: At ELGi we have seen a significant uptick in the textile industry, specifically for protective textile products in response to the global pandemic. As a result, there has been a strong demand for oil free compressed air to maintain sterility in these manufacturing processes. Reliable compressed air is needed at all levels of the supply chain in the textile industry for effective and smooth operations. Power looms, spinning machines and other equipment used to process fabric require varying degrees of compressed air that are also used to power tools that keep equipment clean and in good working condition.
The buzz in the compressed air industry at the moment is the Internet of Things (IoT) which is all about collecting mass data allowing for the integration of digital platforms into industrial processes and machines that improve energy efficiency, reliability, and control.
For example, coming in early 2021, ELGi’s ‘Air Alert’ is an IoT enabling device which, when fitted to a compressor, allows for remote monitoring of data, and provides meaningful insights for the customer regarding their compressor’s running parameters such as service intervals, energy efficiency, changes in air consumption, and general compressor health. This system provides real-time monitoring of compressor efficiency, predictive maintenance to avoid costly down-time, and insights into operating conditions that help product development teams make improvements to connected equipment.
We are also witnessing a rise in demand for oil free, and contaminant free compressed air while still meeting the expectations of reduced lifecycle cost and digital (IoT) compatibility. At ELGi we are already providing such solutions and are particularly proud of our recently launched AB ‘Always Better’ compressor series which can be considered as a disruption in the existing range of oil free compressed air technologies. ELGi’s AB portfolio offers customers with a no-compromise, oil free solution at approximately 8 – 10% reduction in lifecycle costs when compared to prevailing oil free technologies. It offers significantly lower maintenance costs and improves ease of use with unprecedented reliability and high air purity for sensitive industry applications.
We have witnessed strong adoption of our AB range in the pharmaceutical industry on account of our technology’s high reliability coupled with one of the lowest life cycle costs in the market. In Europe’s Food and Beverage industry, this technology is proving its value in, for example - Château Ollieux Romanis, a leading organic winery in France. This specific customer produces high-quality organic wines and therefore purchased several AB Series air compressors to ensure zero contamination during their production processes.