Challenging times, Winning strategies
2008 - 2009. A year that made international news. A year, that was marked with daunting challenges and cataclysmic changes, across industries around the world.
There are two ways to handle anything. One, go with the prevailing dictum, the other, challenge the existing logic. At CUMI, we decided to do the second.
The year that was, saw CUMI challenging each of the key rules of a volatile market. In keeping with its strategy to gain a global position in its area of operations, the company acquired a 51% stake in Foskor Zirconia, South Africa, the 3rd largest producer of zirconia in the world. Similarly, while a new, state-of-the-art plant for metallised cylinders was commissioned at Hosur, expansions and new projects of strategic significance went according to schedule across the company.
New product lines, foray into untapped market sectors, application specific research or prudent cost management - to surmount the challenging times CUMI adopted the method of doing things differently.
Across the company, dream driven teams, worked on business and process methodologies that challenged the times and came out with winning strategies. Strategies that were born from an inherent conviction that defied popular wisdom. A conviction of strength and inner resilience. A conviction, of a true pioneer.^ Top
We decided to invest in a global acquisition
Market logic : During bad times, divest.
CUMI’s Strategy: We decided to invest in a global acquisition.
Capability integration and global positioning determined CUMI's acquisition of a 51% equity stake in Foskor Zirconia (Proprietary) Limited, Phalaborwa, in the Limpopo province in South Africa, the third largest producer of zirconia in the world.
With a 4,200 tonnes of installed capacity, per annum, for calcia stabilized zirconia, monoclinic zirconia and fumed silica, this strategic acquisition has helped enlarge CUMI's existing electromineral product range of silicon carbide, brown fused alumina, white fused alumina and sol gel grains.
Manufactured through the smelter process at 28000 C the products are supplied as raw materials for refractories, abrasives, castings, foundries, etc. The products are largely exported to countries such as UK, Germany, Italy, China, Korea, Taiwan and India.
With CUMI’s technical expertise in electrominerals and Foskor’s raw material resource, this acquisition would be a strategic fit for the company’s entry into new product segments and new geographies.^ Top
Venturing into new product lines was natural to our pioneering spirit
Market logic : When markets are scarce, the wise don't venture.
CUMI’s Strategy: Venturing into new product lines was natural to our pioneering spirit.
Foray into new product sectors to increase market presence was another of CUMI’s aggressive growth strategies for the year. To enlarge its presence in the burgeoning power sector, the company commissioned a green field plant for the manufacture of metallised ceramic components, at Hosur, in September 2008. With a capacity to manufacture 500,000 cylinders per annum, this fully automated, state-of-the art facility, has advanced process and quality control systems, that are on par with international standards.
The new plant has positioned CUMI among the select few global manufacturers with the technical expertise to produce critical ceramic components, for the power transmission industry. With quality affirmations from major OEMs, CUMI is poised to become a significant player in metallised ceramic components, both in the domestic and global market.
Construction of the first phase of the new 10,000 tonnes silicon carbide microgrits plant, at Cochin SEZ, commenced during the year. On completion, this facility would enable CUMI to cater to the burgeoning demand for speciality grains for the photovoltaic industry, and help leverage its position as the second largest producer of silicon carbide in the world.^ Top
For us, cost control is a discipline and a work culture
Market logic : Controlling cost is necessary only in a recession
CUMI’s Strategy: For us, cost control is a discipline and a work culture.
Cost control and paring down of non essentials became another strategic enabler to beat the challenging times. CUMI's largest division, Abrasives, demonstrated a fiscal discipline and innovative cost management that was the focal point of profit sustainability. Here small teams across the division worked continuously to mitigate loss, reduce cost or control breakages, thereby increasing product and process efficiencies. These initiatives helped to lessen the impact of the cost push in fuel and raw materials. This model of prudent fiscal management was institutionalised across the company as part of the best practices, aiming at elimination of non value add activities.
Our strategic capacity augmentations went as per plan
Market logic : During bad business times, refrain from capacity expansions.
CUMI’s Strategy: Our strategic capacity augmentations went as per plan.
CUMI's capacity augmentation strategy included a modern, 2,400 tonnes fired refractories plant at Katpadi Taluk, Tamilnadu.
Spread over an area of 22 acres, this automated plant with advanced process controls and batching systems, is designed to reduce cycle time, improve productivity and ensure zero defect products. Built to international quality standards , this world class facility is the first in India and among the very few world wide, to have batch kilns, with firing capabilities at 18000C for refractory manufacture.
The plant manufactures a wide range of highly specialised refractories such as High Alumina, Mullite, High Temperature Insulation products, for various industries such as Ceramics, Glass, Iron & Steel, Non Ferrous and Chemical Process industries.
This strategic expansion would increase CUMI’s presence in speciality refractories for niche applications, helping the company to cater to a wider market, globally.
Unlocking value from the sale of its Madhavaram location, CUMI put in a new and fully automated production line for its anticorrosive and acid resistant products at Katpadi Taluk, Tamilnadu, to optimise the synergies with its refractory business. With a capacity of 10,000 tonnes per annum, the new facility has almost quadrupled production capabilities, in line with the company’s strategy for aggressive expansion. The anticorrosive and acid resistant products also registered an impressive growth in export sales during the year, addressing new markets in Africa, Middle East and South East Asia.^ Top
We retained our people because we believe they are our greatest assets.
Market logic : During In a downturn, downsize.
CUMI’s Strategy: We retained our people because we believe they are our greatest assets.
CUMI continued to invest in its people, imparting skills and training them for seamless integration into job roles that define a global work culture. Strategic workshops were conducted to align and energize the top management and 'lead to grow' initiatives nurtured new incumbents, instilling institutional integration. Across the Company mentoring programs engaged senior management in transition skills and fast track programmes in leadership created a talent pipeline. Company wide role specific programmes were held to train employees across locations, to face the challenges of a changing economic order and market dynamics.
The Company won the 'Employer Branding Award' instituted by the World HR Congress in 5 categories: Training and Development, Managing Health in Work place, Innovation in Recruitment, HR Strategy in line with Business and Talent Management.
Assuaging the fears of attrition, CUMI, once again reiterated its commitment to its workforce, by its employee responsive policies. The focus was to build people capability and synergies in skills that are required for a Corporation aspiring to become global.^ Top
To us, shrinking markets offered possibilities to explore untapped territories, new product cycles
Market logic : When demand comes down, markets shrink.
CUMI’s Strategy: To us, shrinking markets offered possibilities to explore untapped territories, new product cycles.
CUMI, took on the challenge of a shrinking market, to explore new territories, new product applications. The Abrasives division adopted a 3 pronged strategy for its product lines. While growth in Bonded Abrasives looked at claiming the market space occupied by competition, Coated abrasives focused on enlarging its product range and the coolant line explored new user segments.
With application specific products, value engineering and customer interfacing through a B2B web portal, the abrasives division worked on a focused, segment wise, business strategy to build its growth platform.
The range of new products of the division included:
- High porous Mattison wheels for surface grinding
- Ultra Thin DC and Vitrified wheels
- ‘Shakti’ high performance, large diameter cutting wheels for Chopsaw machines
- ‘Sleek Supreme’, light wheels for new generation power tools
- 'VCool' vitrified wheels with a unique bond system
- Agathon cup wheels for diamond dressing
- Silicon Carbide vitrified rice whitening wheels &
- Rubber Bonded dehusking rolls for agro market
The Coated Abrasives division addressed the OE segment with its high performance belts, rolls and discs for niche applications.
- Improved white Aluminium Oxide buffing rolls for leather finishing in tanneries
- High performance ceramic belts and rolls for hard wood sanding
- Complete range of Velcro and PSA discs for the wood and metal industries
- ‘Alpha’ individual coated Alo Fiber discs for metal sanding
The division also aggressively expanded its distribution and product stock points to enable better customer interface. The focus on differentiated product offering and target market penetration, helped the division to handle tough market conditions.
In refractories, participation in major user projects and a range of customised, application specific products contributed to the division’s growth. Insulation Fire Bricks were a major success in the steel industry. The division also expanded its market for its Mullite and High Alumina products for the Glass and Carbon Black industries. In monolithics, the division's Jabalpur plant registered a growth of almost 50% with its application specific products.
The ceramic business worked on a variable product mix to offer wear resistant products for the untapped Repairs and Maintenance sector. New products in different shapes and geometry were manufactured for markets in Canada, while lined equipments in complicated shapes were supplied to power plants in Australia.
The electrominerals division focused on producing speciality grains for captive consumption, while its Silicon Carbide grains for niche applications for the solar industry, continued to gain major acceptance in European markets.
For CUMI, surmounting a difficult year, has been both a challenge and a learning. In its quest to invent a new future, the company has drawn its own ambitious roadmap for growth and global positioning, in standards and scale.^ Top