Challenging times

Challenging times, Winning strategies

Refractories in India The first batch kiln for manufacturing  refractories  in India, and among the few in the world with firing temperatures of 18000 C

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.

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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.

Foskor Zirconia Team Foskor  Zirconia Management Team

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.

Silicon Carbide

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.

Smelter Process

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.

Foskor Zirconia Plant Foskor Zirconia plant , Phalaborwa, South Africa

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.

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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.

Metallized Ceramics Plant Metallalised Ceramics Plant, Hosur

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. 

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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.

Metallizing Furnace This metallising furnace at the new plant at Hosur is among the largest in the world

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.

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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.

Super Refractories Plant Batch Kilns at the New Super Refractories Plant

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.

New Anticorrosives facility The New Anticorrosives facility

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.

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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.

Transnational Team

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.

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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.

New Products

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
Abrasive Products New Range of Abrasive Products

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.

Wear resistant lining Wear resistant lining provided for complicated shapes as per customer's design. 

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.

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Murugappa Group Abrasives & Ceramics Manufacturers