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| Financial
Results Of Carborundum Universal Limited
Chennai, October 26,2007: The Board of
Directors met today and approved the unaudited financial results
for the quarter ended 30th September 2007. Depreciation for the quarter was higher by Rs. 1.6 crore and interest expense by Rs. 2.6 crore as a result of the large capital expenditure that is being incurred since last year, the benefits of which will be reaped from the next year. Further, there was an exceptional expenditure of Rs. 2.6 crore, being the VRS payments on closure of the Pallikaranai unit, consequent to the stabilization of the new Sriperumbudur plant. As a result of the above, the profits after tax for the quarter was lower than last year (Rs. 12.3 crore versus Rs. 15.7 crore). The profitability of all the business segments continued to be good except in abrasives which had the largest impact of the higher depreciation and VRS expenses and where the full benefit of capital expenditure has not yet been realised. Q 2 consolidated results
Growth initiatives Jingri CUMI Super Hard Materials Co Ltd (the joint venture with China Engineering and Exploration Bureau) established in October 2006, performed well during 2007 in its existing business lines viz., industrial diamonds and diamond cutting wheels. Sales for the nine months ended September 2007 was USD 9 million. The new plant for manufacture of bonded abrasives (capacity 3000 tonnes) is nearing completion and is expected to start commercial production of resinoid products in November 2007. Manufacture of vitrified products will commence in Quarter 4. The Sriperumbudur Coated Abrasive plant which was set up last year with an investment of about Rs. 60 crore is stabilising operations and will gear up to its full potential over the next few quarters. Establishment of this new plant has helped the Company to strengthen its market position in coated abrasives. Construction of the new plant for manufacture of bonded abrasives in Uttarkhand at a cost of over Rs.25 crore was completed in September 2007. The plant has been equipped with state-of-the-art machinery for manufacturing thin wheels to address the mass markets in the fabrication and general engineering industries. Given the fiscal incentives provided by the State of Uttarkhand, this plant will enable CUMI to strengthen its presence in these segments. A new facility for manufacture of Power Tools in Bangalore is nearing launch and will be inaugurated in the last week of October. CUMI's strong brand image and distribution network will help the Company to gain a visible presence in this fast growing business. The dedicated facility for manufacturing wear resistant liner ceramic tiles in the Hosur industrial ceramics plant at a cost of around Rs. 30 crore has commenced commercial production. The expansion will give the Company a better footing to address the international markets for industrial ceramics. A binding agreement has been signed for acquisition of the industrial ceramics business of M/s IVP Limited at Aurangabad. This is expected to be completed in third quarter. A state-of-the-art facility for manufacturing metallised ceramics is under construction in Hosur at a cost of Rs.37 crore. The plant is scheduled for completion in the last quarter of the year and will help the Company to address the good domestic and global demand for metallised cylinders in power transmission industry. A project for establishment of a second manufacturing super refractories factory in Ranipet is underway. Land for the project has already been acquired. Outlook About the Murugappa Group The Group has forged strong joint venture alliances
with leading international companies like Roca, Cargill, DBS Bank,
Mitsui Sumitomo and Groupe Chimique Tunisien and has consolidated
its status as one of the fastest growing diversified business houses
in India. V Ramesh Chandrika Raman |
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