Report: P.Tharyan, Photography: Mohd. Nasir
Can you briefly take us through the Elofic journey in the last few
years when it diversified from just being a filter manufacturer to engine oils
and lubricants?
Our core business is filters
and it will remain filters only. Filters and lubricants are complimentary to
each other. That’s the demand from the trade. That is also the reason why we
have slightly diversified. It is again a very big industry and we are looking
at a small of chunk of business from lubes. We shall be consolidating in
filters, maybe start in different segments altogether. We are already leaders in automotive filters.
We have started two wheelers also. We got a very good response from this segment
and got around five or six OE approvals. Suzuki Motorcycles is one of them. This
is for air filters. We have also tied up with Royal Enfield, DSK Motowheels,
etc. We are in talks with Yamaha, TVS and Mahindra and we hope to get approvals
from them in the next six months.
As far as the aftermarket is
concerned, we have got a very good response. The quality of our filters is
better that some of the OE filters. For lubes, we have put up our own plant in
Faridabad. The capacity is around 400KL. This can be enhanced in three shifts.
Right now we are doing one shift and doing around 70 to 80 KL per month. We
have introduced the latest grades of lubricants. Besides, we have greases too.
We hope to introduce brake oil in times to come.
Recently we entered into
industrial segment. That means we are now into earth moving construction
segment. The dynamics of this particular industry is different from the
automotive industry when it comes to filters. We have invested around Rs 50
crore in putting up the machinery for making these filters. Quality of filters
is very important when it comes to the industrial segment. The customer here is
very quality conscious. Initially we shall do the aftermarket and then we shall
move to the OE segment. In the next one year we are targeting around Rs 50 to
Rs 100 crore revenue from this segment alone.
In the filter business, how much of your revenues comes from the OEs
and how much from the aftermarket?
Exports contribute around
30pc, OEM is 30 pc and the remaining 40pc is aftermarket. This ratio will not
change and will remain more or less the same in the next few years. We want to
balance it out so that recession does not hit us. Industrial segment business
we shall consolidate in the next few years. Then we hope to add more segments
to it like water filtration etc. We want to move ahead in the filter business
while lubes will be an additional business for us. We have around 1000
distributors across the country and 20,000 dealers to cater to this trade we
have added lubes and coolants. In the
times to come we shall be consolidating ourselves as a global leader.
Can you elaborate on your lubes business?
We get all base oils and
additives from leading players. We then do the blending in-house. Then we sell
this in our own brand. We are leveraging our brand. The fact that we are
selling around 80kl per month, it means we are very well accepted.
Which regions are the best markets for your products?
If you look at the auto
components industry, primary the West and the North contribute the maximum.
East and the South put together contribute around 35pc of the business in
India.
What are your views on the trade shows like the ACMA Automechanika? Is
it good for the industry?
I feel that it is good for the
industry. My opinion is that in the times to come this exhibition will be more
of a business show as compared to the ACMA stand alone show during the Auto
Expo. During the Auto Expo, because of the glamour attached to it due to the
bikes and cars, the components show takes a back seat. Last year when they
separated the components show and the vehicle show (Auto Expo 2014) and put
them in two different venues, it was good. It was then very business-like for
us, rather than a leisure kind of show that happens at the Auto show. In fact,
we have given a feedback to both CII and ACMA, not to merge these two shows
again. The auto components show and the vehicles show should be kept separate
at two different venues.
What is your take on the number of days that this show needs to be
held?
Ideally it should be four or
five days, nothing beyond that. Automechanika is four days and it is fair
enough. One day here or there will be just fair.
How do you describe the importance of foreign participation at such
shows?
That is very good because it’s
a very good platform for those especially who are not able to go out. A small
manufacturer can show their strength and they can attract foreign customers. It
is a very good platform and everybody can show the products they have.
Elofic as a brand has grown big time and now the ‘Elofic’ name is
splashed on taxis, hoardings, etc. What are you trying to convey or achieve?
As far as diversification is
concerned, it’s a “No”. As far as global is concerned, “yes”. Globally, we may
think about getting into a joint venture or an acquisition. We want to be a global leader.