Putin’s Abrasive Action Puts Abrasive Maker Carborundum Universal In A Spot

The world has indeed termed this as an abrasive action by Russian President Vladimir Putin. The Russia-Ukraine military face-off has certainly thrown the nation states across the globe in a tailspin. The ongoing war between the two hostile neighbouring nations is bound to have far-reaching implications for the international community. Nearer home in Chennai, this business group is keeping its fingers crossed. The abrasive action of Putin has put this abrasive maker in a tight spot.  Carborundum Universal (CUMI), a Murugappa Group company, it may be recalled, acquired 84% of the ordinary shares of Volzhsky Abrasive Works (VAW), located in the Volgograd Region of Russia, through its wholly-owned subsidiary, CUMI International Ltd., Cyprus, for a consideration of around $37 million sometime in 2007. The Russian venture fetched CUMI a PBT of Rs 1,350 million during 2020-21. The company expanded the capacity of the nitride bonded silicon carbide facility at VAW. This was ostensibly done to provide the company the capability to address the increasing global requirement of nitride bonded refractories for non-ferrous and waste-to-energy applications. Well, the dynamics have completely changed now. With the two countries at loggerheads, a sense of uncertainty has gripped Indian business in Russia. An abrasive action has put this abrasive maker in a bind, it appears.