Dear Shareholders

The growth momentum in CUMI continued during the FY 2018-19 driven by improved performance across all its business segments despite the challenging economic conditions. Though starting on an upbeat note in 2018, the global economic growth lost momentum primarily owing to implementation of tariffs by major economies and counter retaliatory measures. This coupled with heightened uncertainty resulting from financial market volatility and economic policy ambiguity tapered the growth momentum. India emerged as one of the fastest growing economies in the world, a bright spot in a grim forecast for the world economy.

CUMI, its subsidiaries and joint venture companies continued their good run with consolidated revenues increasing by thirteen per cent over the previous year. Strong demand across user industries, continuing inflation of metal prices, introduction of new & innovative products and an efficient distribution network contributed to the revenue growth. Operational efficiencies through Total Productive Maintenance (TPM) practices across its several plants and effective cost management resulted in increase in overall profitability. The Company continues to remain debt-free owing to prudent working capital management and well executed capital expenditure programmes. These programmes were on the lines of capacity increases as well as maintenance which were met entirely from internal accruals.

Considering the future projects and cash flow position, the Board has prudently considered an enhanced dividend of `2.75 per share for the year of which `1.50 per share has already been paid as interim dividend during the year.


Abrasives, CUMI’s largest segment in the business of engineering surfaces recorded a eight per cent growth during the year backed by a very steady growth in the standalone business. The growth also came from new markets and products aided by a robust distribution network. The business continued to face challenges from slowdown in the economy especially during the second half of the year. The indigenous sourcing of input materials and better efficiencies through TPM practices improved the operational efficiency despite a significant increase in the cost of materials and fuel. The Russian subsidiary, Volzskhy Abrasive Works continued its growth trajectory riding on newer products, expanded territories and improved product mix. Sterling Abrasives, the Indian subsidiary manufacturing specialist conventional Abrasives also did well. Wendt India, the joint venture company which addresses the Super Abrasives, Grinding machines & Precision components market delivered improved performance in terms of both revenue and profitability on the back of enhanced exports.

The Bonded abrasives business of CUMI America improved leading to a decrease in its loss levels compared to the previous year. While the topline performance of CUMI Abrasives and Ceramics Company, China remained stable, the profitability dipped mainly attributed by sale of its aged inventories and the necessity to move to a new location. During the year, we have commenced setting up an additional Coated Abrasives maker facility in Sriperumbudur, India to address the growing market and demand. This state of the art facility will be equipped with IOT enabled process monitoring and other advanced features.


The Ceramics business marked the year with a significant increase registering a nineteen per cent growth over the previous year. The Metallized Cylinders and Wear Ceramics business continued to grow by focused marketing efforts, new markets and global customers. Our participation in global expositions like Ceramitec, Powergen, etc. was very well received. The state of the art manufacturing facility of Industrial Ceramics aided in the division receiving the coveted Gold rating for manufacturing excellence from Frost & Sullivan. Successful commissioning of a pilot plant for tape casting and sputtering for manufacture of substrates and sensors saw the division foraying into space and electronics.

CUMI Australia, the subsidiary engaged in lined equipment business continued to perform well and with better performance by CUMI America, the overall consolidated performance was enhanced substantially. Refractories and composites part of the business delivered a superior performance with a twenty five per cent growth over the last year driven by commodity upcycle and capacity expansion of user industries. The performance of the Company’s joint venture Murugappa Morgan Thermal Ceramics engaged in manufacture of Ceramic Fiber products also improved owing to good growth in volumes.


The Electrominerals business of CUMI continued to grow despite adverse business conditions registering a fifteen per cent growth in revenues. Value creation through grain treatments, product and process innovations, joint development projects continue to be the division’s strengths. This year the power plant operations had to be discontinued for nearly 3 month period owing to severe flooding resulting from rains in Kerala which consequentially led to increase in input cost for the business. Though the Russian subsidiary, Volzhsky Abrasives ran at near full capacity, the profitability remained static due to adverse impact of foreign exchange fluctuation as well as increase in energy prices. Despite higher revenues in Fused Zirconia in South Africa, higher fixed costs and inability to pass on the entire costpush to the market impacted the profitability. The Board of Foskor Zirconia Pty Limited is reviewing the business and will initiate suitable measures in due course.

Other Businesses

Southern Energy Development Corporation Limited, the gas based power generation subsidiary which recorded a substantial increase in performance in the beginning of the year was severely impacted by disruption in its operations due to Gaja Cyclone resulting in drop in overall revenues for the year and consequential dip in profitability. While Net Access, the subsidiary providing IT facilities management and allied services recorded a double digit growth in turnover, the profitability continued to be flat owing to competitive market conditions and delays in project assignments.

Research and Development

Research and development continues to be a significant driving force in CUMI’s growth trajectory and is vouched by the continuing increase in IPR creations. Over 50 IPRs were created and the seven Centers of Excellence recognized by the Department of Scientific and Industrial Research, Government of India continue to support the technology initiatives across the organisation. CUMind – a customized innovation framework based on design thinking methodology launched during the year indicates the level of importance we attribute to nurturing this talent across the organization. During the year, a customized innovation hub was inaugurated in Sriperumbudur to provide a physical space for creative minds to unleash their ideas. Dedicated workshops, training sessions and an innovation friendly environment across CUMI has led to development of several breakthrough products, processes and solutions.

Human Resources

People continue to be the core strength of any organization and the most valuable resource. CUMI continues its focus on training and development not only across the organization but also across geographies to enhance every individual’s capability in ushering the carbon age. The various teams across countries have been ably led by Mr. K Srinivasan. They have done well not only in facing challenges with great commitment, conviction and courage but also gearing up to take on the future. The devastation caused by the natural calamities in Tamilnadu and Kerala in the form of cyclone and floods brought out the best in our people. The CUMI teams in the respective locations, not only ensured minimal disruption to the operations and rebounded quickly but also actively & selflessly volunteered in the rescue and rehabilitation efforts in helping neighbouring communities adversely impacted by these calamities return to normalcy.

The CUMI Centre for Skill development (CCSD), the CSR initiative of CUMI addressing the training and development requirements of rural and underprivileged youth and honing their skills for future employment expanded its horizon to Ranipet, Tamilnadu. The year also witnessed the graduation of over 100 students who not only aced the training but also won in various regional and national level skill competitions.

Safety at the workplace remains top priority with focused and highest attention from the Board. Periodic training and awareness sessions continue to be conducted for identification and elimination of unsafe working conditions.

CUMI continued to be the proud recipient of several prestigious and coveted awards/ recognition’s. CUMI’s non-woven product received the prestigious Golden Peacock award for innovative product during the year and the Company’s commitment to transparent detailed disclosures in its annual report was recognized by conferment of the Silver shield in manufacturing category by the Institute of Chartered Accountants of India.


After serving the Company passionately for thirty five years and fourteen years at the helm as Managing Director, Mr. K Srinivasan will retire from the Company on 22nd November 2019 upon reaching the age of superannuation. Under Mr. Srinivasan’s dynamic leadership the Company was transformed into a reputed and respected global player in Electro minerals, Abrasives and Ceramics. His vision, knowledge and perspective has helped the Company grow profitably and he has also nurtured future leadership across various divisions of the Company. We thank him for his outstanding contribution to the Company, wish him well during the rest of his tenure, his retirement and future endeavors. We deeply appreciate his contribution and are indeed immensely grateful.

The Board has selected Mr. Ananthaseshan, President Abrasives Division to succeed Mr. Srinivasan as Managing Director. Mr. Ananthaseshan has been inducted as an Executive Director in April 2019 to ensure a seamless transition during the course of this year. Mr. Ananthaseshan who commenced his career with CUMI has worked across several business verticals and we are extremely proud to see him taking over the mantle from Mr. Srinivasan. Further, Mr. M Muthiah after having served the Company for over 15 years retired as the Head of Human resources division. We wish him well in his retirement. Mr. Rajkumar Arul has taken over the helm of affairs of this division from Mr. Muthiah. We wish Mr. Ananthaseshan and Mr. Rajkumar all success in their new roles.

CUMI’s Board of Directors continue to be a source of great inspiration and wise counsel to me. Their involvement in guiding, supporting as well as challenging the team has been most commendable. The Board deliberations have always been a good mix of encouragement, challenge and caution ensuring sound governance and adherence to our core values & beliefs. I am thankful to them for being generous with their time and wisdom.

We thank all our stakeholders be it customers, suppliers, vendors, bankers, authorities and of course you – the shareholders for your unstinted support and encouragement in our journey in “Making Materials Matter”. As we now transition from an information age to an imagination age – The Carbon Age.

I look forward to working with each of you in this exciting new phase of growth and progress.