Dear Shareholders


Dear Shareholder,

I hope you and your families are doing well, and trust this message finds you in good health.
It is my pleasure to share with you CUMI’s performance during the past year and our future plans. CUMI recorded a 40 percent growth in consolidated turnover, largely owing to the recent acquisitions in Germany and a strong performance across all businesses. The turnover at a standalone level registered a 13 percent growth. The profitability also grew significantly on a standalone (24 percent) and consolidated basis (30 percent).

This performance of CUMI was good, especially amidst continuing volatility and uncertain global economic conditions severely impacted by global uncertainties due to the Russia-Ukraine conflict and the sporadic emergence of many COVID variants. The consequences of these crises, including inflation, unavailability of raw materials, supply chain disruption, and fluctuations in currency and interest rates, continued to prevail, impacting business conditions. Despite these significant economic challenges, India remains one of the fastest growing economies worldwide, providing hope in a rather bleak business environment.

The resilient domestic economy and CUMI’s overall good performance in the last financial year made it possible for us to make a significant Capital Expenditure of Rupees 2.94 billion. Higher capacity utilisation, better product mix, volume growth and better realisation helped CUMI outperform under difficult business conditions.

CUMI’s cash position continues to remain healthy and this will facilitate future growth and maintain our dividend track record. The Board of Directors have prudently recommended a final dividend of Rupees 2 per share over and above the interim dividend of Rupees 1.50 per share paid during the last quarter of the financial year. The total dividend for FY 2022-23 aggregates to Rupees 3.50 per share and is in line with the dividend paid during the previous year.

While the Board’s report and other reports forming part of the Annual report will provide you more details of the business performance, let me share with you some of the significant highlights:


Revenues grew by 59 percent in this business, largely owing to the incremental sales by the recent acquisitions in Germany. This was duly supported by significant growth from subsidiaries, including Volzhsky Abrasives Works (VAW) in Russia and CUMI America Inc in the United States of America.

The business’s profitability came under pressure due to the increased input costs and costs involved in integrating the newly acquired subsidiaries with the business. While the uptick in demand from the auto sector and price increases effected periodically did help the business in securing volume growth, competition from cheap imports and rising prices of raw materials impacted the efficiency, the adverse effects of which were minimised by several cost control initiatives including adapting to new methodologies in design-tovalue leading to packaging cost improvements, process efficiencies and several digital techniques to keep the costs under control. The volume growth is also attributed to the expanding distribution network of the business and enhanced digital marketing initiatives. On a consolidated level, the performance of the subsidiaries in China and the Middle East was subdued due to the conscious decision to minimise operations in these regions due to the continuing business challenges associated with these geographies.

Sterling Abrasives Limited achieved a 24 percent increase in sales on the back of higher agricultural production, good monsoon conditions and greater reception for new products. The measures taken to improve operational efficiencies led to a 36 percent growth in profitability.
Wendt (India) Ltd, our Associate, grew by 17 percent. This was largely due to enhanced export sales and increased sales to the Auto and Auto component sectors. A better product mix, continued focus on operational efficiency measures, and cost control led to a significant 48 percent jump in profitability.

In 2021-22, CUMI added two entities in Germany and Europe within our fold – RHODIUS Abrasives GmbH (RAG) and CUMI AWUKO Abrasives GmbH (CAAG). The integration of the newly acquired subsidiaries is in progress. While RAG was an operating company, a new leadership team was established post the change in control and the organisation is well-positioned for future growth. RAG also managed to achieve 95 percent of the plan. Still, it was impacted by the Russia-Ukraine conflict coupled with shortages in production volumes, delayed deliveries due to transportation issues and, most importantly, increasing energy costs. CAAG was a company formed by acquiring the assets of AWUKO GmbH through a liquidation process in Germany, and hence a significant portion of the time last year was spent on re-establishing the business. The actions that have been put in place over the year across various fronts give us the confidence that the business will be on track soon.

The full integration of the subsidiaries in Germany and the initiatives taken by the standalone business in India together with the support from the subsidiaries in Russia, America, and other parts of the world, gives us confidence that the Abrasives business will emerge stronger in the coming years.


The Electrominerals business registered a consolidated growth of 25 percent and a standalone growth of 13 percent. The business also recorded a 42 percent growth in profitability (standalone) due to a high increase in demand for minerals paving the way for high-volume growth backed by higher realisation. With a significantly improved performance of subsidiaries viz., VAW in Russia and Foskor Zirconia Pty Limited, South Africa (FZL), the business also recorded a much Company Overview Annual Report 2022-23 19 improved profitability growth at a consolidated level. Although the reluctance for Russian products from the Western and European markets intensified last year, VAW registered a double-digit growth by increasing its domestic market share. For FZL, it has been a year of a turnaround in operations owing to higher product demand and better efficiencies through a revamped distribution strategy. A balance sheet restructuring programme also helped improve its net worth position.

The growth in this business was also impacted by a lower generation of power from the Maniyar Hydel power plant and an increase in State power tariffs. The overall good growth registered by the business despite continuing challenging conditions depicts the business’s resilience and the ability to grow stronger in the coming years.


The Ceramics business comprising Industrial Ceramics, Refractories and Composites also recorded good growth at the consolidated level (29 percent) and standalone (26 percent). Demand growth in key user industries, technological advancements in vital sectors, and overall sustainability push across domestic and international industries drove strong growth. All businesses in Ceramics are highly customer-centric, requiring the businesses to work and co-create solutions for the customers.

Technological and people capabilities are being continuously upgraded, thus aiding in retaining existing customers and expanding the clientele. The subsidiaries in Australia and America had a record performance. CUMI (Australia) Pty Limited recorded its highest-ever growth during the last year, backed by increasing demand for mineral processing, resulting in large volumes and better results. CUMI America Inc., the subsidiary in the United States, also contributed significantly to the volume growth and profitability.

Subsidiaries and Associates

The IT subsidiary Net Access (India) Limited performed well with a 30 percent growth in revenue and 36 percent growth in profitability considering the normalising business conditions with the pandemic receding in India. Southern Energy Development Corporation Limited (SEDCO), the subsidiary engaged in energy production, suffered a serious setback. The unprecedented increase in gas prices owing to the continuing global uncertainties coupled with the enhancement of transmission and generation charges has adversely affected the business performance of the subsidiary during the last year. While the business has already diversified into solar energy as part of its derisking strategy, the time taken to establish this new business and the sudden significant impact on costs beyond its control has severely affected the business. The Board of SEDCO is evaluating options to address these and to neutralise these effects in the coming years.

PLUSS Advanced Technologies Limited, acquired during FY 2021-22, focusses on phase change materials and specialty polymers. The good growth prospects reaffirm our commitment to the long-term strategy of leveraging material sustainability. The year 2022-23 saw heightened emphasis on business development and establishing a robust customer base.

Murugappa Morgan Thermal Ceramics Limited and CIRIA India Limited, both joint ventures, recorded good growth and profitability due to increased demand by user industries resulting from an infrastructure growth push in India.

While the above summarises business performance at a consolidated level, I am pleased to share with you the people capabilities, recognitions and other sustainability initiatives undertaken during the year. People engagement and development continued to be a core area of focus for CUMI. Employee safety and well-being continue to be a top priority, and initiatives such as “Drive Zero”, implementation of a safety excellence model etc., emphasise the need to track and train people on safety aspects continuously. Employee capabilities were honed through several dedicated learning and development initiatives. Employee engagement saw numerous programmes aimed at effectively engaging the workforce to both deliver their commitments and go beyond their duty. CUMI was the proud recipient of several awards last year, including the MMA (Madras Management Association) Award for Managerial Excellence 2022 and the IEI industry excellence award 2022 for the Electrominerals business. The Electrominerals business was also awarded the Kerala State Energy Conservation Award 2022 in appreciation of the commendable achievements towards energy conservation and management in the category of Large-Scale Energy Consumers. CUMI also received the ‘Significant Achievement in HR excellence’ certification from the Confederation of Indian Industry for the second consecutive year.

The DSIR-certified centres across the country helped develop technological capabilities and innovative thinking. I am happy to share that during the year, CUMI entered into a Memorandum of Understanding (MoU) with the Defence Ministry’s Research Centre Imarat (RCI) laboratory for Ceramic Radome technology used in missile systems. Further, an MoU was also signed with the Digital University of Kerala to set up a Centre of Excellence for the large-scale commercialisation of graphene. CUMI takes pride in associating with institutions of such calibre and excellence. This allows us to play a role in strengthening India’s capabilities in vital sectors like aerospace-defence manufacturing and developing new nanomaterials of the future.

The CSR programmes of CUMI – in-house and those undertaken through implementing agencies – were carried out, aiming at inclusive growth and sustainable development of communities in which CUMI operates. The sustainability policy implementation progressed with sincere dedication and passionate vigour for achieving overall socio-economic growth.

The above achievements – both business and others – would not have been possible without the able leadership of N Ananthaseshan, Managing Director and Sridharan Rangarajan, Director – Finance & Strategy. They, along with the leadership team have been able to promote solidarity and a resilient spirit among employees across the globe. I thank our colleagues for performing under challenging situations, extending support to each other in overcoming these challenges and converting them into opportunities.

After serving CUMI in various positions for about 37 years, N Ananthaseshan, Managing Director, will be stepping down from the Board. He will retire from CUMI at the close of business hours on 2nd August 2023. Ananth led CUMI during its most challenging times – the unprecedented COVID-19 pandemic and the continuing global uncertainties from the Russia-Ukraine conflict. He was also at the helm of affairs when CUMI renewed its inorganic growth strategies and made several acquisitions in Financial Year 2021-22, both in India and overseas. During his tenure as a Managing Director, CUMI has grown by over Rupees 20 billion and has also been able to navigate challenging situations and capitalise on many growth opportunities. He has also developed and nurtured a young, energetic leadership team to manage CUMI under the next leader. He leaves CUMI well-positioned for its next growth phase. CUMI wishes him well in his retirement and thanks him for his dedicated and passionate service during his long career with CUMI.

Sridharan Rangarajan, well-known to all of you, has been appointed as the next Managing Director of CUMI and will take over from Ananth on 3rd August 2023. Sridhar has been an integral part of CUMI’s strategy and growth for over a decade. I am confident that his experience and knowledge will ensure a smooth transition as CUMI makes significant shifts for the future. I welcome Sridhar to this new role and wish him the very best.

I also take this opportunity to welcome Jürgen Neubert, the Chief Executive Officer of the German subsidiaries in Europe, and Ralf Blechschmidt who has joined us as the Managing Director of CUMI AWUKO Abrasives GmbH.

My most grateful thanks to my colleagues on the Board for their support and guidance. They have always been very generous with their time. During the year, they spent quality time and helped shape our strategy with their insightful questions and perspectives. Their presence and enthusiastic interactions at our plants and offices was encouraging and inspiring. I appreciate their wise counsel in navigating a challenging, difficult year to ensure good performance and a sound governance framework.

In our journey to make a material difference, the belief and trust of all our stakeholders is crucial. I thank every customer, supplier, vendor, banker, regulatory agency, legal advisor, financial and tax advisor, consultant, and you – our shareholder, for your unstinted support. This gives us the faith to make material progress.