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Friday, Aug 27, 2004

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Carborundum to expand global operations

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Mr M.M. Murugappan, Chairman, Carborundum Universal Ltd (left), and Mr Ramesh Agarwal, Managing Director, at a press conference in Chennai on Thursday. — Bijoy Ghosh

Chennai , Aug. 26

CARBORUNDUM Universal will set up at least a marketing unit in Europe by next year. It is also looking at setting up shop in China, company officials told a press conference today.

The presence in Europe could also happen through an acquisition, but if the buy-out option does not yield results, the Murugappa group company would set up a marketing unit there, just as it has in Australia and in the US, officials said.

Carborundum Universal, now into its 50th year, claims a 29 per cent share in the Rs 650-crore abrasives market in the country. The company manufactures a range of bonded and coated abrasives, industrial ceramics and electrominerals.

Being present in more locations around the globe will help the company double its exports to about Rs 60 crore over the next three years, the Managing Director, Mr Ramesh Agarwal, said.

The company is grappling with an "interpretation problem" as regards the Electricity Act. Carborundum's electrominerals unit in Kerala is a big consumer of electricity and the company would like to wheel power from its gas or wind-based power plants in Tamil Nadu. But the Electricity Boards of both States want to collect wheeling charges, which would make the whole exercise unviable.

Since gas is available in Tamil Nadu, Carborundum would like to expand its power plant (a 5 MW joint venture) but unless the company is able to wheel electricity to Kerala, it makes no sense for it to expand the power plant.

In an informal chat with Business Line, company officials said that the German collaborator of one of Carborundum's joint ventures, Wendt India, had given the company a larger territorial responsibility. Until recently, the collaborator has given opportunity to market and service its products east from India, but now West Asia has also been included.

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