Home»Chairman's Message

Dear Shareholders,

With the global financial crisis continuing to impact manufacturing and trade worldwide in 2009 - 10, CUMI’s efforts towards ensuring sustainable all round performance was indeed a great challenge.  The bold steps taken by Governments across the world and in particular, in India, triggered a revival in the second half of the year.  As CUMI serves customers in the industrial consumables, capital goods and infrastructure sectors, the revival was slow but steady. The focus was on improving efficiency across all facets of the business operations ensuring strong cash flows and continuing selectively a carefully planned capital expenditure programme.

The Abrasives business of CUMI did well to improve its market position in India over the previous year in both, Bonded and Coated Abrasives. However, sales in other parts of the world, including from Volzhsky Abrasive Works (‘VAW’) in Russia were severely affected owing to weak customer demand. Margins continued to be under pressure despite concerted efforts in managing costs and improving efficiencies.  The Chinese operations were restructured into a 100% CUMI owned company after an amicable agreement with CMGB - our erstwhile partners. This will result in a greater focus on the business in coming years. Sterling Abrasives, a subsidiary located in Ahmedabad India turned in a truly Sterling performance based on a strategic shift in product mix towards custom-built products. Wendt India, the joint venture that manufactures diamond and CBN tools performed creditably, despite difficult market conditions.

Refractories and Industrial Ceramics had a very difficult year owing to a sharp decline in capital consumables and the postponement of many projects in the infrastructure related sectors. A strong focus on manufacturing excellence, seeking new markets and applications in India and overseas ensured a steady operating performance. The refractory ceramic fibre joint venture, Murugappa Morgan Thermal Ceramics maintained profitability on lower sales. CUMI Australia which addresses industrial ceramics applications in the coal and mining industry once again had an outstanding year. In addition to Australia, the team has been entrusted to replicate their business model selectively in other parts of the world. The new metallised ceramics production line went into full production during the year, making CUMI the third largest producer of metallised cylinders in the world.    The products from the new line have won supplier commendation. This bears testimony to CUMI’s capabilities in design engineering and operations.

Electrominerals both in CUMI, India and at VAW, Russia continue to grow well and profitably complimenting each other in both raw material security and value added products. The first phase to manufacture 2400 tons of the eventually proposed 10,000 T silicon carbide micro grits plant was commissioned in the Cochin Export Processing Zone in April 2010. This will serve the growing demand in the solar wafer processing markets worldwide. Raw material constraints continue to be a challenge for Brown Fused Alumina, causing technical teams to seek new sources and modify processes to ensure quality consistency. Market demand and a volatile South African Rand proved a big challenge for Foskor Zirconia in South Africa.  However, towards the second half the operations improved through addressing new markets beyond the steel industry.

Through all these challenges and uncertainties the CUMI team dedicated itself towards its larger vision of becoming a strong and robust Abrasives Ceramics and Technical Ceramics company worldwide. Research and Development efforts continued and so did the emphasis on people development, in terms of building capabilities and leadership.  We at CUMI firmly believe that this will be the bedrock for future growth and progress.

The CUMI team very ably led by Mr K Srinivasan, our Managing Director, the Business Management Committee in India and Chief Executives in all the overseas operations have marshaled all their resources, exercised prudence, and have relentlessly pursued the company’s larger vision. This has ensured a sustained business performance in the face of many challenges. Mr P R Ravi, President of the Ceramics, Refractories and Electrominerals businesses retired formally during the year and has very kindly accepted to mentor the Industrial Ceramics team for a further period.  My appreciation goes out to the entire CUMI team across the world for all their good work.

Mr A Vellayan, a Director on our Board stepped down consequent upon assuming charge as the Chairman of the Murugappa Corporate Board. My most grateful thanks to him for his contributions to CUMI and his continued interest in CUMI’s development and progress as part of the Murugappa Group. On behalf of everyone at CUMI I wish him a very successful tenure at the helm of the Murugappa Group. I am pleased to welcome Mr Sanjay Jayavarthanavelu to the Board. He brings with him a strong experience in the machinery and machine tool business apart from an overall industry perspective. I look forward to his contributions to CUMI. Our Board of Directors have been a great source of both inspiration and support to the entire CUMI team and to me in particular. To all of them my most grateful thanks.

In pursuit of a strategic direction towards being a leading player across the world in the field of Material Sciences, CUMI also seeks to balance the interests of all stake holders viz. customers, employees, shareholders, suppliers, Government and society, in every sphere of its operations worldwide. The support of all of you shareholders is indeed most valuable to us in our continuing quest to make Materials Work For Man.