Carborundum Universal Ltd (CUMI), part of $3-billion Murugappa group, is planning to invest around Rs 480 crore in Russia and India. The proposed investment will be for expanding the existing capacity and to set up a greenfield facility in Gujarat.

Speaking to Business Standard on the sidelines of the company's annual general meeting, which was held here on Friday, K Srinivasan, managing director, CUMI, said the company was planning to expand its capacity by another 100,000 tonnes at Volzhsky Abrasive Works in Russia. The facility, which manufactures silicon carbide fusion and has a capacity of 70,000 tonnes, will be expanded in phases. 

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Greenfield unit in Gujarat
He added that the company also entered into an agreement with Gujarat Mineral Development Corporation (GMDC) to set up brown-fused alumina (BFA) plant with a capacity of 35,000 tonnes, along with 24-Mw lignite-based power plant.

“We will sign a joint venture agreement with GMDC in a month's time. CUMI will hold majority stake, over 51 per cent”, said Srinivasan. CUMI is planning to invest over Rs 100 crore in the proposed facility.

The company reported a 126 per cent increase in net profit in Q1, at Rs 43.47 crore as compared to Rs 19.19 crore last year. Total income rose 27% to Rs 359.96 crore from Rs 282.37 crore. “We expect to grow at the current pace,” he added.

“Currently, 55 per cent of the revenue comes from the domestic market. This proportion is expected to change as overseas business is growing. We expect it to touch a level of 60 per cent,” he said.

The company said it was scouting for good acquisition opportunities. “Europe and US acquisitions will be customer-centric, while in other parts of the world like South Africa, Russia, South America, China and others, it will be mainly for manufacturing capacity,” said Srinivasan.

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