CUMI signs MoU for acquisition of Volzhsky Abrasives Works, Russia

Chennai, 9th June 2007: Carborundum Universal Ltd (CUMI) of India has entered into a binding MOU for the purchase of 84.14 per cent of the ordinary shares of Volzhsky Abrasives Works located in the city of Volzhsky in Volgograd region, Russia.

Volzhsky Abrasive Works (VAW) is the largest producer of Silicon Carbide (SiC) abrasives in Russia, with 65,000 tonnes per annum installed capacity. VAW also produces Bonded Abrasives and Refractories. VAW's sales in 2006 was about USD 54 million.

VAW management had been able to grow VAW by maximizing the SiC production as well as bring in sound management practices. To take VAW to its next growth phase, clearly needed a Strategic Investor with interests in Abrasives, Grains and Refractories. CUMI, is one of the 2 companies globally with this range, and was hence a logical choice.

CUMI is a fully vertically integrated company with operations in Australia, Canada, China, Middle East, US and in India. CUMI brings to VAW its brands, market access, application engineering expertise and global management practices. This will help VAW to grow its Bonded and Refractory business as well as to move a part of the high volume SiC business to new value added micro abrasives.

The change in ownership is expected to benefit VAW's customers, employees and the community in Volzhsky as CUMI is known for its Good Governance Practices. The deal will be formally concluded as soon as the necessary clearances including an approval by Russian Federal Antimonopoly Service are obtained. This is expected in July 07.

About CUMI
CUMI is one of the flagship companies of the USD 2 billion Murugappa Group. The company has pioneered the manufacture of coated and bonded abrasives in India and has made forays into other material science areas such as ceramics (Industrial Ceramics, Ceramic Fibre Refractory and Bonded Refractories) and electrominerals. CUMI is the largest company in the abrasives business in India.

About the Murugappa Group
Headquartered in Chennai, the USD 2 billion (Rs.8500 crore) Murugappa Group is India's leading business conglomerate. Market leaders in diverse areas of business including engineering, abrasives, finance, general insurance, sanitaryware, cycles, sugar, farm inputs, fertilizers, plantations, bio-products and nutraceuticals, its 29 registered companies have manufacturing facilities spread across 12 states in India. The organisation fosters an environment of professionalism and has a workforce of over 28,000 employees.

The Group has forged strong joint venture alliances with leading international companies like Roca, Cargill, Cerdak, DBS Bank, Mitsui Sumitomo and Groupe Chimique Tunisien and has consolidated its status as one of the fastest growing diversified business houses in India.

For further details please contact:
Chandrika Raman
Asst. General Manager,
Group Corporate Communications General Manager
Murugappa Group
Tel: 044 25306535 Mob - 98400 71172
Email: chandrikaR@corp.murugappa.com

Anu Lakshman
General Manager
IPAN
Tel: 044 28217294
Mobile: 9841039574
Email: anu.lakshman@ipan.com

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