Dear Shareholders

Dear Shareholders

It has been a year of cautious optimism for CUMI, and I am immensely pleased to share the highlights of FY 2021-22. The year commenced in the background of the second wave of the Covid pandemic, reckoned to be the deadliest wave affecting the globe. Yet, the impact on the economy and business operations was not as devastating as the first wave owing to preparedness, the shield of vaccination, coupled with less severe lockdown conditions imposed by States balancing the health of its citizens and economy.

While the economy was on a revival path, the fear of the pandemic’s third wave and the emergence of the geopolitical crisis due to the intensified Russia – Ukraine conflict put the global economy back into a volatile condition towards the end of the year. Today, global growth is expected to decelerate against the backdrop of continuing disruption caused by Covid and supply bottlenecks. The rebound in the global activity, together with supply chain disruption, and higher food-energy prices, have pushed up inflation in many countries. However, unlike the rest of the world, the risk for India is predicted to be lower, backed up by strong national policies and the resilience demonstrated in the last few years.

Despite the challenging and volatile conditions, the year 2021-22 has been a milestone for CUMI. After a decade-long hiatus, we at CUMI, decided to forge ahead in our inorganic growth path. The CUMI team has been able to complete three acquisitions, in line with its long term plans – one domestic and two international. The acquisitions of PLUSS, AWUKO and RHODIUS Abrasives reaffirm our ability to thrive in tough volatile conditions. We look forward to growing stronger by synergising the strengths of each other.

Organic growth has been encouraging. The demand side has been strong across businesses with most of the economies coming back post the pandemic and the standalone revenues have grown by 33% and consolidated revenues by 26% showing a significant improvement in profitability at both levels. The results have been driven by improved performance across all businesses throughout the year through enhanced efficiencies backed by volume, realisation growth, and higher capacity utilisation. The significantly improved performance of the subsidiaries aided in the accelerated consolidated performance. The Company spent over Rs. 1705 million towards Capex which was fully funded by internal accruals. Also, internal accruals funded the three acquisitions made during the year, aggregating to an investment of about Rs. 6600 million. This is a valid testimony to the prudent and efficient liquidity management and robust cash flow position.

Despite increased cash outflows during the year to support the improved performance, capex and acquisitions, the Board of Directors have recommended a final dividend of Rs. 2 per share. Together with the interim dividend of Rs. 1.50 per share paid earlier during the year, the total dividend aggregates to Rs. 3.50 per share, which is higher than the previous year dividends.


The Abrasives business recorded a 29% revenue growth during the year at standalone and consolidated levels, backed by improved volumes, margin and better product mix. While the business concentrated on building further on its strong distribution leadership, its focus on retail development also sharpened. At a consolidated level, the business was well supported by CUMI America and Volzhsky Abrasives, the American and Russian subsidiaries. Sterling Abrasives, the subsidiary in Gujarat, recorded a stellar performance for its agro-processing products, driven by higher agriculture acreage during the year and new product development. Wendt (India) Limited, a joint venture company, also registered its highest-ever revenue growth – 38% in the Super Abrasives business and 22% in Non-Super Abrasives and Machines business. However, in the backdrop of the continuing pandemic conditions and other operational constraints posing limited opportunities for CUMI Abrasives and Ceramics Limited, the subsidiary in China, the Board of the subsidiary is reviewing the continuation of its operations.


The revenue at the consolidated level grew by 23%. Maximising opportunities in India, backed by timely capacity enhancements and swift alternate product development, the standalone business grew its revenues by more than 40%. The Russian Subsidiary – Volzhsky Abrasives Works registered a double-digit growth (in Roubles) despite the challenges faced in the last quarter owing to the intensified Russia – Ukraine conflict. Under the able local leadership, the subsidiary continues to run its operations with a greater focus on local demand. In the Electominerals business, Foskor Zirconia (Pty) Ltd, the South African subsidiary, made a significant turnaround in its performance, registering a double-digit growth on the back of increased demand and improving its operational efficiencies and tightening its sales and distribution process.


The Ceramics business represented by Industrial Ceramics and Refractories & Composites grew by 27% at a consolidated level, with subsidiaries in Australia and America registering growth despite challenging business conditions, including the logistic issues and cost challenges. CUMI (Australia) Pty Limited, the Australian subsidiary continued to grow its revenues and profits notwithstanding the trade tensions and adverse logistic conditions. In addition, the standalone business, which is largely export-oriented in Industrial Ceramics and projects in Refractories, grew by a solid 32%, signifying strong international and domestic business capabilities.

Other subsidiaries and associates

CUMI invested Rs. 1150 million to acquire 72% equity stake in PLUSS Advanced Technologies Private Limited (PLUSS) during October 2021. PLUSS and its wholly owned subsidiary in the Netherlands became the subsidiaries of CUMI under this acquisition. PLUSS is a speciality materials research and manufacturing company engaged in phase change materials for thermal storage and speciality polymeric additives. It is a niche technology company with good growth prospects, and the acquisition is in line with our long-term goal of pursuing opportunities that leverage materials sustainability. Furthermore, phase change materials is a growing technology with versatile applications in pharma cold chain, refrigeration & food supply chain, medical devices, buildings, and HVAC applications, offering good future opportunities.

In February 2022, according to an asset purchase agreement executed in December 2021 with the Insolvency administrator of AWUKO Wandmacher GmbH & Co. KG, Germany, a Company undergoing insolvency proceedings, the main assets including land & building, plant & machinery, fixed assets, leased assets, brands & trademark, patent, technical know-how and other intangible assets excluding cash and receivables had been acquired by CUMI for Euro 8 million. AWUKO is a 120-year-old leading brand in Coated Abrasives. Besides being one of the market leaders in leather and wood applications, AWUKO has a strong presence in metal and lacquer applications. AWUKO’s makers with wide width capabilities will provide a competitive advantage for CUMI. Backed by an experienced process and application engineering team, AWUKO’s distribution base will help CUMI access European markets. However, considering the operational challenges AWUKO has had as an entity prior to the asset purchase leading up to the insolvency process, the stabilisation of the operations is expected to take some time.

February 2022 also marked the execution of a share purchase agreement for acquiring all shares in RHODIUS Schleifwerkzeuge Verwaltungsgesellschaft mbH (RQS GmbH) and all limited partners’ interest in RHODIUS Schleifwerkzeuge GmbH & Co. KG (RQS KG) (together RHODIUS Abrasives) from M/s. Gebrüder Rhodius GmbH & Co. KG for an enterprise value of Euro 55 million. The change in control to RHODIUS Abrasives GmbH, a subsidiary incorporated during the year, concluded on 31st March 2022, with RHODIUS Abrasives and its subsidiaries becoming part of CUMI effective 1st April 2022. RHODIUS Abrasives is a leading global manufacturer of thin wheels well recognised for its high quality and performance. They are reckoned as leaders in product innovation with a unique professional segment product suite backed by a strong proprietary product production process. They have a strong legacy of seven decades, serving more than 100 countries with trained and experienced employees backed by a committed leadership team. Infrastructureled growth is expected to enhance the demand for thin wheels in India, the United States of America and other international geographies. The CUMI-RHODIUS synergy will benefit both entities by positioning them in a strong spot to play to potential and capitalise on global market opportunities.

We at CUMI believe that the above acquisitions offer mutually beneficial opportunities to all entities. The diversity of the new entrants into CUMI will provide novel and fresh resources for growth and an opportunity to relook and align our existing processes and offerings. However, the unified passion for serving our customers in the best possible manner will help accelerate the synergy benefits of these acquisitions. As the overseas acquisitions were made by CUMI International Limited, Cyprus (CIL), I wish to place on record my appreciation and thanks to the Board of CIL for spending their time and efforts in the fructification of these investments.

The continuing pandemic dampened the growth prospects of CUMI Middle East with a decrease in demand, as was the case for the IT subsidiary Net Access India which, despite a marginal growth in revenues, was impacted by the lower demand for services from its customers. On the other hand, Southern Energy Development Corporation Limited, the gas-based power generation subsidiary, recorded a sales growth. However, the volatility of the gas prices in the last quarter of the year owing to the geopolitical crisis impacted margins and slowed down the acceleration.

Murugappa Morgan Thermal Ceramics Limited, our joint venture, recorded an improvement in performance owing to demand improvement in user industries with higher capital expenditure project orders. CIRIA, another joint venture, did reasonably well, backed by a strong clientele and execution strategy and process.

Along with the improved performance amidst volatile business and economic conditions and effective timely execution of the planned inorganic growth strategy, the organisation continued to do what it does best. The year 2021-22 continued to be a year of recognition of awards and accolades for CUMI. I am extremely proud and happy to share with you that CUMI has been recognised as one of the ‘Best Managed Companies’ by Deloitte in its maiden programme launched in India this year. The awards process was based on a stringent evaluation process encompassing internal processes, strategy, and governance criteria. Among the other recognitions, the Industry Excellence Award for the Electrominerals Business from the Ministry of Heavy Industries is yet another noteworthy accomplishment for the organisation.

During the year, the Company continued its Research and Development (R&D) activities in a focused manner and continued to create several Intellectual Property Rights in Trademarks, Patents and Design. The organisation’s R&D is well supported by its seven centres registered with Department of Scientific and Industrial Research. The Company, as well as its newly acquired subsidiary PLUSS, have been awarded the prestigious Global Innovation Technology Alliance Award (GITA) by Confederation of Indian Industry – Government of India, which recognise companies that have developed cutting edge technologies.
The contribution to the community and society at large continued with zeal and zest in dedicated Corporate Social Responsibility (CSR) programmes in the field of health and education, with a focus on combatting the pandemic. In addition to the mandatory CSR programmes executed as per the annual approved action plan, the employees voluntarily engaged in good citizenship initiatives around the many plant locations serving the neighbouring communities upholding the virtues of the Five Lights.

Safety at the workplace tops our priority list. The year was marked with an enhanced focus on training and creating awareness at shop floor levels and across the organisation. The learning and development initiatives to hone employees’ skills and knowledge levels continued with rigour during the year with structured programmes like CUMI Leadership Programme (CLP), Business Leadership Progamme (BLP), and CUMI Super Star. Employee health and safety continues to be monitored, and despite the normalising conditions with the pandemic becoming less severe, we at CUMI have not let our guard down. Dedicated vaccination drives helped us achieve almost 100% vaccination for our staff. These camps were also extended to employees’ families and our business partners. The hygiene and safety protocols continue to be practised in the interest of the overall wellbeing.

In the previous year, in line with our purpose of engineering materials science solutions for an enduring planet, we had crafted our Sustainability Policy. This year, the CUMI team put it into action with a 25:25 goal – aiming to reduce intensity of energy, waste, emissions and water by 25% from current levels by the year 2025. I am happy to report that all businesses have commenced their efforts towards achieving this goal and looking forward to sharing with you our progress over the next few years.

It is also laudable to note the significantly improved performance – both organic and inorganic, in a year struck by volatile pandemic conditions, severe logistic issues, supply chain constraints, and which ended at the peak of a geopolitical crisis led economic turmoil. These results have been because of the tireless efforts of our employees across the globe ably led by N Ananthaseshan, Managing Director, and Sridharan Rangarajan, Director – Finance & Strategy. The leadership teams of the subsidiaries and associates, and the Business Group Management Committee of CUMI have done exceedingly well to lead the teams by example in demonstrating not only to survive under difficult conditions but to emerge stronger by converting challenges into opportunities. The role played by the Corporate functions like Finance, Treasury, Compliance, Legal and Human Resources in concluding multiple acquisitions in a time-bound manner is commendable. On behalf of the CUMI family, I extend a hearty welcome to the teams – PLUSS led by Samit Jain; CUMI AWUKO led by Robert Wehowsky, Thomas Müller, Fabian Hoffmann and Ton Hintzen; RHODIUS Abrasives led by Bernd Lichter, Klaus Rudolph and Ernst-Henning Sager. We look forward to working with them to create enduring quality solutions for our global customers.

I am very thankful to my colleagues on the Board for their continued support and wise counsel. They have been a great source of inspiration to me personally and have been most generous with their time and wisdom in a buzzing year like the last. Besides ensuring sound governance and adherence to our value system, their active involvement in guiding, encouraging, and challenging the management team has been invaluable.

In closing, we thank all our stakeholders – customers, suppliers, vendors, bankers, regulatory authorities, legal advisors, investment advisors, financial & tax advisors, consultants and of course, you – our shareholders for your unstinted support and belief in all that we do in forging new paths ahead.