"ELGi Partners with Italian Firm for Manufacturing and Sales of Vacuum Products"

ELGi Equipments Ltd, renowned for its air compressor manufacturing expertise, has inked a technical licensing agreement with Italy-based DVP Vacuum Technology SpA, a distinguished player in the vacuum industry since 1973. This collaboration marks ELGi's foray into assembling, manufacturing, and selling vacuum products, a strategic move aligned with the company's long-term growth vision.

The expansion into vacuum products signifies a significant vertical diversification for ELGi, part of its overarching strategy to tap into a global business opportunity estimated at $20-21 billion. This strategic thrust encompasses a diverse portfolio spanning compressors, vacuum products, aftermarket accessories, among others.

Jairam Varadaraj, Managing Director of ELGi Equipments Ltd, emphasized the strategic rationale behind this expansion, citing the company's solid traction in the compressor segment globally as a foundation for venturing into vacuum products. With a robust presence in key global markets constituting a substantial portion of the compressor opportunity, ELGi is strategically poised to capitalize on the vacuum product segment's potential, treated as a distinct vertical within the company.

Under the technical collaboration with DVP Vacuum Technology SpA, ELGi will channel investments into engineering resources to assimilate DVP's technology and tailor it for the Indian market. Manufacturing of vacuum products will be centralized at ELGi's facility in Coimbatore.

The venture will see investments in establishing assembly lines and bolstering sales and service infrastructure over the next few years, though specific investment figures have not been disclosed yet.

The global vacuum pump market has witnessed robust growth in recent years, with an estimated market size projected at $6-7 billion by 2024.

In its recent quarterly financial report, ELGi posted consolidated revenues of ₹823 crore in Q3 of the fiscal year, reflecting a notable increase from ₹772 crore recorded in the previous year. Net profit stood at ₹84 crore, up from ₹80 crore in the corresponding period. Compressor sales contribute to 92% of the revenue, with the remaining generated from the automotive business. ELGi derives approximately half of its revenue from the domestic market and the remainder from international operations.

With a market share exceeding 20%, ELGi stands as one of India's premier compressor manufacturers, boasting an extensive overseas footprint encompassing subsidiaries in Europe, the US, Brazil, UAE, Australia, and Indonesia.

HBL