Carborundum defers plans to set up greenfield project in Gujarat

Abrasives maker Carborundum Universal, a part of the Murugappa Group, has “deferred” plans to set up its proposed greenfield project in Gujarat, a top company official has said.

The city-based company was planning to establish a greenfield project as part of its Rs 200-crore capital expenditure plan this financial year, to expand its fired and castable refractories.

“No no. We have deferred it,” Carborundum Universal, Managing Director, K. Srinivasan, told PTI, when asked about the project.

He said the reason for this move was the company’s recent acquisition — RHI Isithebe Pty Ltd by its subsidiary CUMI International (Cyprus) Ltd.

CUMI had signed a pact with RHI AG, Austria, the parent company of RHI Isithebe for its 100 per cent purchase.

“Sometimes inorganic growth will help and after making this Isithebe acquisition, we have decided to defer it,” he said.

Isithebe is a fused mineral manufacturing facilities in South Africa with annual production of 30,000 tonnes.

“Besides, we will be using our Ranipet and Jabalpur facility (for manufacturing fired and castable refractories)”, he said.

On meeting the company’s capital expenditure plans for this financial year, he said, “We will stick with it and hope to end up by Rs 170 crore overall.”

Responding to a query on the company’s operations in Russia and South Africa, he said, the plants were making a “slow progress” due to uncertain global market conditions.

The plan was to commission the $7 million Russian facility by March, 2013. “Now, we are hoping to commission it towards the end of 2013,” he said.

On the outlook for the third and fourth quarters, given the company’s consolidated net profits dipping by 48.5 per cent for the second quarter ending September 30, 2012, Srinivasan expressed the hope that the company would make a “steady progress” in the coming quarters.

“The net profits for second quarter 2012—13 declined. But you are comparing with the corresponding period of last financial year. If you look at the sequential results of Q2 with the fourth quarter of last financial year, we have grown by about 10 per cent”, he said.

“We expect to keep that trend (for the third and fourth quarters as well”, he said.

Carborundum Universal reported a 48.5 per cent decline on its consolidated net profits at Rs 33.75 crore for the second quarter ended September 30, 2012 from Rs 65.60 crore registered during the same period of last year.

The consolidated total income of the company for the second quarter ended September 30, 2012 soared to Rs 528.34 crore from Rs 516.84 crore registered during the same period of last year.

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