LITTLE BIG GENIE

THERE ARE NO SHORTCUTS IN JAIRAM VARADARAJ’S VISION TO TAKE HIS ELGi EQUIPMENTS TO NO. 2 IN THE WORLD. HE DOESN’T JUST WANT TO BE BIG. HE WANTS TO BE THE BEST. INDIAN CAPITAL GOODS COMPANIES DON’T TYPICALLY TAKE THE BRANDED PRODUCT ROUTE BUT THE THIRD-GEN ENTREPRENEUR IS COUNTING ON HIS STATE-OF-THE-ART AIR COMPRESSOR TO DO THE TRICK.

- T. Surendar

FOR JAIRAM (JAY) VARADARAJ, global domination by an Indian company was always conceivable. Even as a doctoral student of international business at the University of Michigan, U.S., his final dissertation was titled: “Internationalization of Indian firms: A study of technology acquisition, exports and foreign direct investment.” This was in 1987, in pre-liberalised India. His professor and avant-garde management thinker C.K. Prahalad was not impressed with his protégé’s choice of topic. He told Varadaraj that he was wasting his time; Indian companies did not have the muscle to make it internationally. But Varadaraj, 27 then, was neither dismayed nor swayed.

Over the last three decades, the third-generation entrepreneur and managing director of Coimbatore-based air compressor maker ELGi Equipments has made his thesis his mission. So much so that in 2010, he announced his intent of making ELGi the second-largest air compressor manufacturer in the world by 2027. (It is currently seventh in the global pecking order. In India, it is already No. 2, behind Atlas Copco.)

Varadaraj’s ambition is powered by the size of the opportunity. The global market is pegged at $15 billion, 80% of which is accounted for by the organized sector, comprising market leader Atlas Copco and Chicago Pneumatic, among others. The larger companies (including Kirloskar Pneumatic and Ingersoll Rand) have a similar hold on the $2-billion domestic market; the unorganized sector controls 20% of the industry and includes hundreds of manufacturers that play in the low end of business.