The Hindu Business Line : Carborundum’s China unit to begin production soon

Chennai, Oct. 26 Carborundum Universal’s Chinese subsidiary Jingri CUMI Super Hard Materials Co Ltd is setting up a manufacturing unit in China to produce bonded abrasives. This new plant will be production-ready next month, according to a press release from the company.

Indeed, between September and December 2007, a number of initiatives of Carborundum Universal will begin to bear fruit. Examples are: the Rs 25-crore bonded abrasives plant in Uttarkhand has just gone on stream, as has the Rs 30-crore industrial ceramics unit at Hosur. A new Rs 37-crore metallised ceramics plant, also at Hosur, will commence production shortly. So will the new facility for producing power tools at Bangalore.

Major projects

This bunched take-off of projects would give the company a leg-up in the coming quarters. However, two other major initiatives will also strengthen the company. One is the acquisition of Volzhsky Abrasive Works, Russia, which is a large producer of silicon carbide grains that go into the making of abrasives.

VAW can produce 65,000 tonnes of the grain, in addition to 30,000 tonnes of bonded abrasives and 3,000 tonnes of refractories. The company recorded sales of $50 million in the nine months to September, roughly the same as it did in the whole of last year.

The other major project is the Rs 60-crore coated abrasive plant at Sriperumbudur. This project was inaugurated last year and is expected to “gear up to its full potential over the next few quarters.”

In the second quarter of 2007-08, Carborundum Universal achieves sales of Rs 160 crore, 23 per cent higher than in the corresponding quarter last year. However, due to higher depreciation and interest charges and an exceptional expenditure of Rs 2.6 crore (VRS payments), the company’s net profit dipped to Rs 12.3 crore from Rs 15.7 crore previously.

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