By Sharad P Matade and Venkatesh P Koushik| Jun 22, 2021

Elofic Celebrates Its 70th Year Of Evolution

Elofic, which supplies oil, air, hydraulic and fuel filters mainly for the passenger cars, commercial vehicles and two-wheelers, has celebrated its 70th anniversary. Today, it produces over two lakh filters per day, which it will take to 2.5 lakh per day soon. Along with the planned capacity enhancement, the company will also add more dealers to its network and focus on heavy commercial vehicle segment. Excerpts:

Elofic Industries Limited, one of India’s leading automotive filter manufacturing companies, which began operations in 1951, celebrated its 70th anniversary recently. Starting with a humble production of 100 filters per day, the company has grown massively and now produces around two lakh filters per day through its six state-of-the-art facilities in Faridabad (Haryana), Nalagarh (Himachal Pradesh) and Hosur (Tamil Nadu). Elofic is expanding with an increased research investment into creating filters for electric vehicles (EVs).

“I would not say this as a journey, but an evolution. Over the past 70 years, we have witnessed several milestones throughout evolution. But the factors which are most important to us are the values – perseverance, hard work, integrity and being futuristic – that our founder laid down. The right technology, the right machines, the right processes and the right workforce have always been our main priority areas. This is what led to us being the leader in the business,” M B Sahni, Chairman cum Managing Director, Elofic Industries, told Motoring Trends.

To cater to the growing demand, the company will deploy an additional line at its Hosur plant which will take filter production capacity to 2.5 lakh per day. With this expansion complete, the company plans to achieve total revenue of INR six billion by 2025- 2026. In FY21 the company had revenue of around INR 2.85 billion.

The Faridabad-based company supplies oil, air, hydraulic and fuel filters mainly for the passenger cars, commercial vehicles and two-wheelers, with six state-of-the-art manufacturing facilities in Faridabad (Haryana), Nalagarh (Himachal Pradesh) and Hosur (Tamil Nadu) in India.

Founded by Late Mohinder Singh Sahni in 1951, Elofic Industries had a humble start with just 10 employees producing 100 filters per day that the founder sold on his bicycle. The company achieved its first big break in 1974 when it onboarded Hindustan Motors as its first OEM supplier. Then in 1984, Maruti selected Elofic as its designated filter supplier; since then the company has added more than 36 OEMs and is still growing strong. In 1980, the company started its first export business with filter export to Egypt and today is a major exporter to the Europe and the US. Along the way, the company has received various quality assurance certifications including IS 9002 certification in 1995 and ISO/TS: 16949-2002 certification in 2007. The company has a wide presence in the aftermarket sector with seven warehouses and more than 1,000 distributor network spread across the country and abroad.

On the continuous growth and success of the company, M B Sahni added, “We manufacture around 500 filters per minute. We never compromise on the quality of our products as we shop around the world to procure the best possible equipment and materials.”

During its journey, the company has received numerous awards for its achievements in the field of filter manufacturing. The most recent include Maruti Suzuki award for comprehensive excellence, award for innovative healthcare product and Royal Enfield award for supply chain partnership in 2018; best research and development award from Transformance Forums, Hitachi Astemo (formerly Keihin) business partner award, award by Kawasaki engines USA, and manufacturing excellence award from ACMA in 2019 and excellence in new product design and development from ACMA in 2021.

Explaining the effect of the pandemic on the business, K D Sahni, Vice Chairman cum Joint Managing Director, Elofic Industries, said “Despite slowdown in the market due to the nationwide lockdown, we still managed to record over 20 percent growth in FY21 over the previous year. The company made positive strides in all three fronts, i.e., domestic OEMs, Export OEMs and aftermarket. One has to work little harder when the things are better.”

The company adopted many employee welfare initiatives to maintain the morale during the lockdown, helping improve communication and productivity. Some of the initiatives include a virtual meeting every morning with the heads of departments to review the overall situation. These virtual meetings helped the company to stay in touch with all employees, distributors, OEMs and customers, helping the company not only recover the lost sales but also grow stronger through the tough times.

To cope with the current Covid-19 protocols, the company has redefined SOPs and reengineered certain manufacturing processes at its manufacturing plants. The company has also cut down the excess flab to keep costs in check as it’s an important area for frugal manufacturing. Along with this, the company has also started work on industry 4.0 and digitisation. “We are investing in it and the results may be seen in the next one year or 18 months, ” added K D Sahni. Elofic’s manufacturing plants are currently working at 80 percent capacity maintaining the social distancing protocols put in place by the government.

Talking about the evolution of the automotive filter technology, Sahni explained that over the past few years, the evolution is driven by the OEM needs and the stringent norms in respective markets. The key focus areas in both the domestic and international market are efficiency and longevity as OEMs want filters that help improve the efficiency of the engine while having a long life to help with the overall cost of ownership. He also mentioned that there is a sudden rise in demand for cabin air filters with anti-virus media due to the pandemic.

According to Sahni, the pie concerning oil, air and fuel filter in an IC engine vehicle will always remain a constant and product design and development will be driven by the OEMs’ requirements and regulations. With the introduction of BSVI in India, OEMs expected high performance filters that have higher dust storing capacity and higher synthetic blends, which Elofic delivers to help increase the efficiency of the vehicle.

Research and development at Elofic keeps evolving to design and develop filters to meet the market demand. The company has currently applied for 30 patents of which 11 have been granted. The company believes that clean air technology will be in high demand in the future and has already started work in this regard with the recent launch of the clean air tower.

Talking about the company’s export strategy, K D Sahni said, “Our strategy to focus on both domestic and export markets equally helps offset the risk of dependency on one market.” Despite the pandemic, Elofic saw an increase in demand from the export market that now constitutes more than 30 percent of the total revenue of the company. The company majorly caters to OEM players in export markets – Europe and the US.

Elofic ventured into lubricants business in 2008 and since then has been catering to the aftermarket demands of distributors.

When we asked Sahni about the challenges in the aftermarket business, he explained that the Covid-19 pandemic has given rise to e-distributors providing solutions to workshops and mechanics who have now replaced the big markets. This rise in workshop providers has moved the demand from urban cities to suburban cities. Elofic has recently added 80 plus partners to its network to help with the demand from suburban cities in FY21. The rise of this new trend has helped organise and capture the aftermarket sales for the company. “We are looking at something around 120 new networks from suburban cities or from the segments which are in focus,” said M B Sahni.

Currently, the Indian aftermarket is worth around INR 170 billion, 15 percent of which is the filter market. Fifty-five percent of the filter market is controlled by organised players while the unorganised sector controls the rest of the market. Elofic has a 20 percent market share in the organised filter business sector.

Explaining the challenges from the unorganised players, Sahni said that due to the restriction on import from China, the number of small players has reduced. He added that the percentage of unbranded products on sale in the market has come down during the pandemic, reducing the threat from unorganised players in the aftermarket business.

Talking about the challenges in the business, Sahni said that while the company has seen success in the SUVs, MUVs and tractor segments, it has struggled in the heavy commercial vehicle segment. Currently, Elofic is focusing on the heavy commercial vehicle segment to devise a new strategy to collect the market share in the future. The company is also targeting the industrial segment for its filter business in future.

Talking about the introduction of EVs in the Indian market, K D Sahni said, “We have been following the developments in the EV field and believe that the infrastructure required to make EVs mainstream in India is more than 20 years away. So, we feel IC engines will still hold the majority market share in the coming years.” M D Sahni also believes that the heavy commercial vehicle segment will not be electrified anytime soon and hence the company will have a better chance to capture market share in that segment.

He also explained that irrespective of the powertrain used, there will be a need for filters in the vehicle. He expects that the demand for air filters and cabin filters will increase with the rise in EVs. At the moment, Elofic supplies filters to two major players in the EV segment. (MT)

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