With clients like Bigbasket and PepsiCo, this commercial refrigeration company has clocked Rs 145 Cr in 10 years
In the past few years, India has been witnessing an increase in the number of full-service restaurants. According to MarketWatch, the demand for less-time consuming, frozen and packaged food and beverages has also increased, fuelling the growth of the commercial refrigeration market in the country.
Sanjay Jain, Director, Elanpro
While there are a number of Indian companies in the segment such as Tata Voltas, Birla Aircon, Blue Star, etc., Gurugram-based Elanpro has managed to uniquely position itself in a short span of time.
Started in September 2009, the company was founded by industry veterans including Sanjay Jain, Ranjan Jain, and Shashank Joshi. It currently offers products such as chest freezers and coolers.
Sanjay and Shashank met while working at Blue Star. This was the place where Sanjay picked up his interest and love for the refrigeration segment, he tells SMBStory.
The idea to start a company in the segment came to Sanjay somewhere around 2004 when he realised a significant vacuum of quality services and products in the commercial refrigeration segment. Sanjay started a company called Celfrost in 2004, which was later sold to an American company, Middleby Corporation.
Thereafter, when the time was ripe and right, he started Elanpro with two other co-founders.
Starting up again
Unlike most entrepreneurs, Sanjay started nurturing his dreams of building a billion dollar company at the age of 39, after having already started a company before. “It is like having a baby at the age of 39, which is not at all easy,” he reminisces.
Nevertheless, his passion for the industry compelled Sanjay to take on the task and start everything from the scratch. From getting people on board to arranging for capital, he had to put himself to task.
However, he points out that trust played a very big role in getting a foot in the door of opportunities from industry stakeholders in the initial stages of building a business.
Challenges and tackling COVID-19
Talking about how challenging it was to get the right and skilled workforce on board, Sanjay says, “We were not an MNC or a venture capital funded company that would attract people.”
While it is true that VC-funded companies and the startup ecosystem has become quite an obsession among Indians today, it is hard to miss the fact that stability and consistency in growth is something that only traditional businesses have been able to exhibit. And Elanpro is a good example to look at.
Also, in times of a crisis like COVID-19, when some of the well-established companies in India are firing and laying off staff, Elanpro claims to have had no layoffs in the last four months. In fact, Sanjay says, the company is in a good position because of the way it has managed its cash flows.
In addition, the company claims to have clocked a turnover of Rs 145 crore in FY 2018-2019, but due to the pandemic, it recorded Rs 115 crore turnover this financial year.
Decoding the commercial refrigeration market
The demand for commercial refrigeration in India is vast and yet India is still in the evolving stage. Catering to the(Hotel/Restaurant/Café) segment, Sanjay says, Elanpro has been limited by the scope of the Indian market.
“We are a country that believes in consuming fresh food and therefore the proliferation of refrigeration in the commercial field has been restricted in India.”
He says, chest freezers and visi coolers are the two most popular categories of refrigerators that are manufactured in India.
“But the world is much bigger, and so is the market. Back bar, ice machine, wine cooler, and beer cooler also make up as popular categories, but the scope in India is limited, and hence we have to depend on imports,” he says.
The company outsources the manufacturing facilities from vendors across the country. Moreover, the business has to import raw materials from the UK, Turkey, the US, and China, which concentrates the largest market.
China-as-a-global-supplier debate has become a hot topic of discussion ever since the pandemic broke out. The world has come to realise that it cannot fully depend on this economy for their raw material needs. This also presents an opportunity for India to leverage and present its manufacturing capabilities to the world.
Sanjay says, "India has all the ingredients it takes to become a global supplier”, including talent, skills, engineering prowess, a robust legal system, and much more, but the “right perspective is missing.”
Now, with voices around domestic manufacturing strengthening, especially with the ‘Vocal for Local’ campaign, Sanjay expects the creases in the ecosystem to smoothen.
“PM Modi has done a good job by encouraging local manufacturers. To bolster such efforts, it is important to not restrict India as a manufacturer within the domestic market. We must manufacture and aim towards exporting our products.”
The products by Elanpro costs anywhere between Rs 3,000 to Rs 8,00,000 lakh.
Intersecting technology and affordability
“We wanted to bring hi-tech solutions that can actually work in our country, considering our weather conditions and consumer preferences are very different when compared to other countries,” Sanjay says.
Today, the company has some marquee clients like online grocery major, for which Elanpro designed some refrigeration equipment. Elanpro is also working with companies like PepsiCo, Coca Cola, Amul, Kingfisher, and several other brands.
Among its other technological advancements and innovations, Elanpro also counts creating a solar battery equipped mobile freezer three years ago. Apart from that, it also introduced freezers that can work on LPG in 2012.
Moreover, with social distancing becoming the norm, the business is gradually transitioning from human-oriented technologies to contactless products. “Keeping the same in mind, we introduced Safe Sani Dispenser, an infrared sensor-based hand sanitising dispenser,” he says.
COVID-19 has changed the way businesses function, but not much in the commercial refrigeration business, Sanjay says, adding that products will be tweaked - like visi coolers will be automated, but the industry as a whole will not be going under any major change.
The pandemic has also brought some lessons for one and all. “Never depend on your past, work on cash flows, and continuously innovate to remain relevant,” is how Sanjay sums up everything.