The new venture will provide advanced technology compressors for Indian Navy, Marine and specialized Industrial applications

New Delhi: Elgi Equipments Limited (EEL), Asia's largest integrated manufacturer of air compressors, entered into an agreement with J P Sauer & Sohn of Germany for forming a joint venture "Elgi Sauer Compressors Ltd."

Speaking on the occasion and highlighting the venture's objective, Dr.Jairam Varadaraj, Managing Director of EEL said, "The joint venture would provide advanced compressors, indigenized for customers like Indian Navy, Marine and special segments of the industry."

"The joint venture will also provide product and logistic support for the Indian Navy, Marine and specialized industrial applications," he added.

The company's production unit is set up at Coimbatore in Tamil Nadu, involving an investment of Rs.28 million and with an installed production capacity of 400 compressors per annum.  While JP Sauer & Sohn will hold a majority of the stake in the new venture accounting for 74 per cent, EEL will retain the remaining 26 per cent. The new entity will be headed by Mr. Satish Kini as General Manager and is expected to post a sales turnover of Rs.100 million during the first year of its operation, Dr.Jairam Varadaraj added.

"We found Elgi as the right partner, which is a market leader in India for air compressors with widespread sales and service network.  Through this joint venture, we aim to explore business opportunity in all the sectors of Indian market in which we operate and provide products with latest technology", said Mr. Harald Schulz, Managing Director, JP Sauer & Sohn while commenting about the Joint Venture.

The business relationship between EEL & JP Sauer & Sohn started in 2004 with Elgi promoting the Sauer range of high-pressure compressors in India. The successful sales collaboration has taken the form of a joint venture with J P Sauer now. The joint venture would provide state-of–the-art compressors for emerging and refit shipbuilding projects by the Indian Navy, shipyards and special applications in domestic industry.

Allaying fears that the global meltdown will have any impact on the new entity Dr. Jairam said that shipping and defence business are not much affected by global slowdown.  In fact defence expenditures are necessary for the security of the country and as such it is independent of market volatility.

ELGI was established in 1960 and is Asia's largest integrated manufacturer of air compressors and automobile service station equipment.  ELGI's products are used in a wide range of applications in   industrial, defence, power, locomotives, textiles, ship building etc. In the financial year ended March2008, ELGI has posted a sales turnover of Rs.504 crores.

J.P Sauer & Sohn, Maschinenbau, Gmbh-Germany was established in 1884. Sauer is a market leader for high-pressure air compressors for naval, marine and industrial applications. Sauer high pressure compressors have a strong presence in NATO Navies, shipyards, offshore and industries worldwide.  In the financial year ended Dec 2007, Sauer has posted a turnover of 72 million euro.