Carborundum Universal South East Asia, Europe

Our Corporate Bureau

Chennai, Sept 12: Carborundum Universal Ltd (CUMI), a Murugappa group company, is looking for new pastures to take the heat out of its bottomline following recession in the user industries on the back of Chinese invasion. The company would be shortly spreading its wings to Europe and south east Asia, besides sprucing up its US operations.

Top company officials told The Financial Express that Carborundum is “actively considering” proposals to enhance its exports in a big way in the current fiscal. “We are looking at Europe and south east Asia as major export destinations. We are working on several proposals to improve exports to these regions,” sources said, adding that “the company would also enhance its marketing presence in the US.” Among others, CUMI would examine the possibilities of roping in local partners in these countries, so that it can leverage local partners’ strengths in marketing its products. “This is an option we are examining. However, nothing has been finalised so far,” sources said.

CUMI had floated a wholly-owned subsidiary in the US, Cumi America Inc, a couple of years back. The company has managed to stabilise the marketing operations of its US arm and its sales during the last fiscal were to the tune of $1.34 million.

Sources also said that recession the in domestic economy has hit the prospects of the company considerably during the current fiscal. Major user industries like automobile, construction, general engineering and glass have seen their sales and production dropping in the first eight months of the current fiscal. The company’s sales are directly correlated with the growth of these industries. Besides, the company is facing stiff competition in certain product lines from Chinese products. CUMI is expecting to beat the threat posed by the dragon by a better cost structure and revamping its product lines, sources said. “Especially in markets like south east Asia, we will be competing on the basis of better quality. What matters in such markets is the price-performance relationship, rather than price alone. Therefore, we are confident of beating competition, even from China,” sources said.

The Rs 280-crore company is into the business of both coated and bonded abrasive, electro-minerals, refractories and industrial ceramics. The total revenue from exports last year was to the tune of Rs 24 crore and the company is expecting it to go up by a notch, over to Rs 26 crore during the current fiscal.