26/5/10 – Murugappa Group records significant growth in profits during 2009-10.
26 May 2010
The diversified Indian group Murugappa, whose business portfolio companies spans abrasives as well as engineering, finance and agricultural businesses recorded an increase in products despite the background of economic uncertainty globally.
The company recorded that the financial year “began on a difficult note due to the lingering effect of the financial crisis and the note of pessimism caused by rising inflation. Yet, from the second quarter, the financial stimulus driven economy improved smartly and recorded higher Industrial Production.”
The Group’s businesses capitalised on the overall recovery to post impressive growth in profits, supported by key strategic initiatives including Continued focus on organic and inorganic growth coupled with Concerted efficiency measures. The Group says it is well poised to achieve the milestone of US$ 7.2 billion by 2013-14.
The Murugappa Group is one of India’s leading business conglomerates with a turnover of USA 3.03 bn. The Group has 29 companies under its umbrella, of which seven are listed and actively traded in NSE & BSE. Headquartered in Chennai, the major companies of the Group include Carborundum Universal, Cholamandalam DBS Finance Ltd, Cholamandalam MS General Insurance Company Ltd, Coromandel International Ltd, Coromandel Engineering Company Ltd, EID Parry (India) Ltd, Parry Agro Industries Ltd, Tube Investments of India Ltd and Wendt (India) Ltd
The organization has a workforce of over 32,000 employees and is market leaders in served segments including Auto Components, Abrasives, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Construction, Bio-products and Nutraceuticals, the Group has forged strong joint venture alliances with leading international companies like Mitsui Sumitomo, Foskor, Cargill and Groupe Chimique Tunisien.
During the year, the Engineering Businesses of the Group made a strong comeback and posted a jump in profits on the back of recovery in the user industries. The company recorded a strong rebound in performance from the Engineering Businesses (Tube Investments of India Ltd and Carborundum Universal Ltd). Tube Investments of India Ltd (TII) registered an overwhelming performance by growing 132% in Earnings Before Interest, Taxes, Depreciation and Amortization and 11% in turnover. Going forward, improvement of operational efficiencies and emphasis on the growth segment will be major focus areas for the Company.
Looking at its abrasives activities, Carborundum Universal Ltd (CUMI) ended the year on a positive note with a revenue growth of 6% with Earnings Before Interest, Taxes, Depreciation and Amortization growth of 22% aided by the strong performance of the Indian operations. Despite competition from global players, CUMI with its diversified product portfolio and focus on niche product segment continues to be the market leader in the highly competitive domestic abrasive market.
CUMI’s China operations became a 100% subsidiary of CUMI in 2009-10. This will help address the abrasive requirements in the fastest growing market and also complement CUMI’s other abrasive businesses. CUMI China’s focus in 2010 will be towards consolidating the existing investments.
Industrial Ceramic Division’s consistent strategy of increasing the customer base and expanding the export market has helped counter the slowdown. The state of art metalized cylinders plant, set up in 2008-09, reached its full capacity during the year. The Division will continue to focus on increasing the capacity and customer base for exponential growth going forward. Steady industry demand and resumption of postponed project orders is expected to help the growth of CUMI’s Super Refractories Division.
Electro Minerals Division is expanding the Micro Abrasives capacity in order to take advantage of the opportunities in the Photovoltaic industry, especially in the export market. The new facility will be commissioned in three phases starting April 2010. The focus in 2010-11 will be towards market development and establishment of customer base.
Volzky Abrasive Works (VAW), a subsidiary of CUMI and the world’s second largest producer of Silicon carbide, continued its good performance with the profit growth of 31% over last year. CUMI is planning an increase in capacity in order to leverage its market leadership position. CUMI’s investment in Foskor Zirconia (Proprietary) Limited, South Africa, is expected to yield desired results with the revival in growth of world refractory.