Elofic expresses optimism, expands capacity
The filters’ specialist has been augmenting its R&D and manufacturing muscle in keeping with a rapidly growing product basket.
Leading automotive filters manufacturer, Elofic Industries Ltd. (EIL) has come a long way since its inception in 1951. During this period, the company has gone from producing a very modest 100 filters per annum, to a whopping 250 filters per minute. The latter figure translates into 72 million filters per annum – distributed to OEMs as well as the aftermarket. Therefore, despite the dismal state of the automotive industry, Elofic has managed to maintain 20-25 percent growth over the last five years. ‘ We plan to notch up a turnover of Rs. 270 crore this year, relative to the Rs. 220 crore achieved last year,’ says K D Sahni, JMD, EIL. Keeping in line with its goals, the company is setting up a new plant in Gujarat, with an overall investment of Rs. 80 crore. This plan is designed to increase Elofic’s filter production capacity by 60 million units. Capacity expansion has been an ongoing affair, with close to Rs.50 crore having been invested in this regard over the last three years. Today, the company operates five plants. While three are located in Faridabad, there are two others in Hosur and Nalagarh. Elofic, has been supplying products such as air, oil, fuel and hydraulic filters to makers of two- and three-wheelers, passenger cars, commercial vehicles, farm equipment, small engines, off-road vehicles as well as construction equipment and gensets. Some of Elofic’s key CV
clients include OEMs, like Tata Motors, M& M, Ashok Leyland, New Holland, VST Tractors and John Deere. Now the company is getting ready to add new clients.‘ The market is evolving rapidly with the influx of international players. We have developed products for many of these new entrants,’ says K D Sahni. He adds, ‘ We develop close to 100 new filters every year at our R& D centre in Faridabad. Each engine has different specifications, thus requiring a different type of filter.’ Elofic has been according major thrust to backward integration, in order to facilitate better marriage between product and technology. It currently develops everything from filter paper, plastic parts and sheet metal parts in-house. ‘ We have a flat sheet analyser which determines if sheet media can be made into a filter. Further, we have 3D printers for rapid prototyping of filters,’ says M D Sahni, Managing Director, EIL. The firm deploys advanced software platforms like 3D modelling, stress analysis which decodes the stress levels of filters at various points in their life cycle, as well as flow analysis stimulation software, to understand the dynamics of flow, for filters. Elofic is not just content to provide the ‘right’ levels of quality. It aims to push the envelope. Here is a case in point. Conventionally, oil filters are manufactured based on the recommendations of the OEM in question. As such, filters typically last for 9,000-10,000 km. But Elofic according to Pawan Sharma, VP, Domestic Business, ‘ is in discussions to put out a more advanced range of filters that can keep going till 40,000 kms.’ As laudable as Elofic’s foresight may be, market deployment of these advanced products is a tricky affair. While 25 percent of Elofic’s total revenues comes from OEMs, 45 percent is derived from the aftermarket. Herein lies the challenge - higher quality levels will lead to longer replacement cycles and therefore to a shrinkage in aftermarket volumes for the distribution network of over 900 distributors and 30,000 dealers. ‘Indeed there is resistance from the trade with regards to filters with longer replacement intervals. But, they also realise that change is inevitable. Newer generation vehicles will call for longer lasting consumables such as lubricants and filters,’ explains Sharma.
Diversification
Elofic is in the process of diversifying into products like hydraulic, oil, air and fuel filters for industrial applications. In fact, a special line has been set up at the Faridabad plant to deliver high pressure filters for earth moving, and construction equipment, AC compressors, and gensets. Elofic also plans to grow its export market, which currently accounts for about 30 percent of its total revenues. The company primarily exports its products to customers across USA and Europe. The company operates a warehouse near Chicago, US to serve small engine manufacturers like Kohler engine, Briggs and Stratton and Generac, Kawasaki. Elofic also supplies Italyheadquartered Lombardini with air, oil and fuel filters. In addition to this, the Indian company has also been manufacturing filters for distribution under specific customer brands.