CUMI on integration mode

Venkatachari Jagannathan
29 December 2007

Chennai: It is integration time at the Indian abrasives major Carborundum Universal Limited (CUMI) which acquired and set up plants in Russia, India and China.

The last two years saw the Rs 526 crore turnover CUMI going on a shopping and expansion binge within and without India. In September this year, the company acquired $54 million turnover Volzhsky Abrasive Works (VAW), Russia. CUMI acquired a 96 per cent stake in VAW for $37 million through its special purpose vehicle CUMI International Limited, Cyprus. An open offer to acquire the balance from other shareholders is on and will close on 23, January, 2008. 

In August, CUMI acquired the Rs 12 crore revenue industrial ceramics division of IVP Limited at Aurangabad, Maharashtra for around Rs 6.25 crore on a slump sale basis.

In China, the Indian company's joint venture company Jingri CUMI Super Hard Materials Company Limited has started commercial operations of its new 3,000 tpa bonded abrasives plant. The fag end of 2006 saw CUMI buying two units in Jabalpur, Madhya Pradesh for Rs 3.2 crore.

While one unit manufactures monolithic refractories, the second is engaged in the manufacture of high quality refractory cement, an input for the former. The acquisition provided CUMI an additional monolithic manufacturing capacity of 12,000 tonne per annum (tpa) catering to markets in Central India.

According to company officials, these are exciting times as they are in the process of integrating the new acquisitions in their supply chain dynamics and chalking out which plant would supply where.