CUMI Universal looks at setting up operation in US

Murugappa Group firm Carborundum Universal Ltd (CUMI), which has its own operations in Russia and China, is looking at starting its operations in US. The company has various options including organic and inorganic modes of entry into the country.

The business opportunities in all the business sectors including abrasives and electrominerals are high in US and it is a lucrative market, said company Managing Director K Srinivasan.

“We have a sales operation at the moment in US and also sell to many large customers there, including ceramic products. But we do not have a large operating or manufacturing company in US, as of now. We are looking at various options, including whether we start some thing and do it, or whether we buy something. We have not come to any firm conclusion and it is in the stage of ideation,” he said.

Earlier, speaking to analysts, he said that the company has a challenge in US and while the market is growing, the company has lost money there. At present, it sells all the products it has, in the abrasive, ceramics and electrominerals verticals and the overall business in the US market is roughly around $15 million of all the three verticals combines, out of CUMI’s consolidated sales of around $340 million.

The Board of Directors of the company has approved that the company should go ahead and invest up to about $5 million to improve its working capital requirement, etc, and to grow the US market, he told analysts.

“Significant part of that would be to grow the Abrasive business there and we have to work around and see how we are going to grow this in the US, because that not only is a big market but also allows you to work with some of the high end customers and that will allow you to make products or co-create products which will eventually also be useful in other parts of the world, so that we are mindful of it,” he said. This is true for Abrasives as well as the other parts, he added.

Founded in 1954 as a tripartite collaboration between the Murugappa Group, The Carborundum Co, US and the Universal Grinding Wheel Co Ltd, UK, CUMI manufactures coated abrasives, bonded abrasives, super refractories, electro minerals, industrial