Carborundum Universal integrating Russian acquisition
Saturday, 29 December 2007, 04:27 Hrs
Chennai: Indian abrasives major Carborundum Universal is proceeding carefully in integrating its $37-million Russian acquisition Volzhsky Abrasive Works. The $133-million turnover company is also confident of mopping up the four percent stake held by other shareholders in Volzsky with an open offer that will close on Jan 1. Carborundum Universal, through its special purpose vehicle Cyprus-based Cumi International, bought 96 percent stake in the $54-million turnover Volzhsky Abrasive Works this September. Handling its first major overseas acquisition with care, Carborundum Universal did not disturb the Russian company's management team nor posted its officials there. Part of the Murugappa Group, Carborundum Universal is focussing on improving the Russian company's production efficiencies and integrating it with its global supply chain. Volzhsky Abrasive Works is the world's second largest silicon carbide manufacturer with a capacity of 65,000 tonnes per annum (tpa). The company also manufacturers bonded abrasives (capacity 35,000 tpa) and specialised refractories (3,000 tpa) similar to what Carborundum Universal has in India. Volzhsky Abrasive Works sells around 9,000 tpa of bonded abrasives and there is huge scope to increase production. According to Carborundum Universal officials, the integration is happening by strategic business units (SBU) - silicon carbide, bonded abrasives and specialised refractories. The officials say the Russian acquisition has come at a time when there is globally a shortage in the alumina grains segment. With no new capacity added in the world, the officials feel Carborundum Universal can now become a global player in the value-added alumina micro-grains segment.