Carborundum Universal plans two new facilities in India

CUMI acquired the assets, brand and technology of abrasive product manufacturer Dronco of Germany, which went bankrupt. It is planning to set up two new facilities in India to make thin wheels and high purity silicon carbide

Murugappa group firm Carborundum Universal Ltd. (CUMI) is planning to set up two new facilities in India to make thin wheels and high purity silicon carbide, for which it is expecting to spend ₹350 crore in FY25, said a top company executive.

In FY24, CUMI acquired the assets, brand and technology of abrasive product manufacturer Dronco of Germany, which went bankrupt. It is similar to Rhodius in Germany that was acquired by CUMI in February 2022.

“We have moved assets into India last month. We are setting up this facility in India using Rhodius technology and it would take two years. That is how the synergies will start playing out,” said Managing Director Sridharan Rangarajan during an analysts call.

According to him, the new plant will have a capacity to produce 50 million thin wheels and is expecting to generate revenue worth ₹250-300 crore from FY27.

Similarly, CUMI is also setting up a six-ton-per-month high-purity silicon carbide facility in Kerala. This will take about 18 months. Besides, it is also planning to set up IT infrastructure and safety-related capex.

The carbide facility will serve two markets - the semiconductor industry where high-purity silicon carbide will be used and in the technical ceramics field. The capacity will be scaled up depending upon utilisation.

Asserting that they have moved from a lab to establishing a plant, he said they have tied up with an anchor customer in silicon carbide for ceramic business and another for semiconductor use.