Carborundum Universal set to acquire Russian firm

Monday, 13 August 2007, 07:00 Hrs
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Chennai: Abrasives major Carborundum Universal is soon expected to announce the acquisition of a Russian counterpart Volzhsky Abrasives Works that has a turnover of $54 million, top company officials have said.

Most of the formalities have been concluded and the Chennai-based company is now awaiting a decision by the Russian Federal Anti-Monopoly Service, according to M.M. Murugappan, chairman of Carborundum Universal.

In June 2007, the 5.26-billion company ($128 million), which is a part of the $2 billion Murugappa group, had signed a binding agreement with a consortium of investors to acquire 84.14 percent stakes in the Russian company.

If everything goes as per plans, Carborundum will fund the acquisition through a mix of debt and internal accruals, officials said. While the purchase price has not been divulged, it will be less than the Russian firm's turnover.

Volzhsky Abrasives' silicon carbide business, focussed on exports, was the main attraction for the Indian company. The Russian firm's capacity is 10 times that of Carborundum and scope exists for value added micro abrasives, officials said.

In India, a clutch of Carborundum's new plants will go on stream shortly. Its bonded abrasives plant at Uttarakhand - with a capacity of 3,000 tonnes per annum (tpa) and set up at an outlay of 250 million - starts production next month.

September will also see a joint venture in China, named Jingri CUMI Super Hard Materials Co Ltd, start manufacturing bonded abrasives.

Production of power tools, a new business line, will commence in Bangalore soon with a limited range to start with. The capacity of the company's industrial ceramics plant at Hosur is being doubled to 6,000 tonnes per annum.

The company's other major projects, the 300-million second super refractories plant at Ranipet with a capacity of 3,000 tonnes per annum and the 400 million metallised cylinder plant at Hosur, are scheduled to go on stream next year.
Source: IANS
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