COMPANY PROFILE

1.1 Brief history of the company

CARBORUNDUM UNIVERSAL LTD (CUMI)

Carborundum Universal, also known as Carborundum Universal Ltd (CUMI) is an India-

based coated and bonded abrasive manufacturing company. Carborundum Universal was
established in 1954 as a joint venture between the Murugappa Group, India, the
Carborundum Co, USA and the Universal Grinding Wheel Co. Ltd, U.K. The main business
activity of CUMI involves manufacture of coated abrasives, bonded abrasive, super-
refractories, electro-minerals, industrial ceramics, and ceramic fibers. Further, CUMI
produces about 20,000 different varieties of abrasive products, refractory products, and
electro-minerals. Carborundum Universal Ltd. has 14 manufacturing facilities across India
and these manufacturing facilities are meticulously connected with a wide network of
distributors and sub distributors. The company pioneered the manufacture of Coated and
Bonded Abrasive in India in addition to the manufacture of Super Refactories , Electro
Minerals, Industrial Ceramics and Ceramic fibers . Today the company ranges over20,000
different varieties of abrasives, refractory products and electro-minerals are manufactured
in ten locations across various parts of the country.

CUMI-Business Distribution (As per the revenue)

CUMI is known to be an innovator and exports its products to 23countries spread across
North America, Europe, Australia, South Africa, and Asia. All the manufacturing facilities of
Carborundum Universal are ISO 9001:2008 certified for quality standards and ISO 14001
certified for environment-friendly manufacturing

1.2 Business process of the organization - Products

 Fused products
 Specialty products
 Micro powders
 The following is a brief explanation about the various types of electro minerals falling
into these 3 categories, produced by the Electro Minerals Division (EMD) of
Carborundum Universal Limited.

 Fused Products
1. Brown Fused Alumina

Brown Fused Alumina is a tough, sharp abrasive which is highly suitable for grinding
metals of high tensile strength. Its thermal properties make it an excellent material for
use in the manufacture of refractory products. This material is also used in other
applications like blasting and surface hardening.

2. White Fused Alumina

White Fused Alumina is a high purity, synthetic mineral, manufactured by the fusion of
controlled quality pure grade Bayer Alumina in an electric arc furnace at temperatures
greater than 2000°C followed by a slow solidification process. Strict control over quality
of raw materials and fusion parameters ensure products of high purity and high
whiteness.

White Fused Alumina is highly friable and hence used in Vitrified Bonded Abrasives
products where cool, fast cutting action is essential and also in the manufacture of high
purity Alumina refractories. Other applications include use in Coated Abrasives, Surface
treatment, Ceramic Tiles, Anti-Skid Paints, Fluidized Bed Furnaces and Skin/Dental Care.

3. Silicon Carbide

Silicon Carbide is a man-made mineral of extreme hardness and sharpness. It is the ideal
abrasive for grinding/sanding materials of low tensile strength such as Cast Iron, Brass,
Aluminium, Bronze etc. Its thermal properties make it an excellent medium for use in
the manufacture of refractory products and crucibles.

 Specialty products
1. Semi-Friable Alumina
Semi-Friable Alumina is a low titania containing brown corundum produced by
controlled smelting of special grade Bauxite in an electric arc above 2000 deg C. The
lower titania gives an intermediate toughness between that of White and Brown Regular
corundrum and strict control of this parameter over a narrow band ensures consistent
quality.

In Bonded Abrasives, semi friable alumina can be used in depressed center wheels, cut
off Wheels, in Surface and cylindrical Grinding of heat sensitive metals, alloys etc. The
wheels made of this material are made best use of where cool and fast cutting is
required.

In Coated Abrasives, these grains are best suited for use in metal finishing and for
sanding of wood, plastic coatings and paint.

2. Blue Fired Semi Friable Alumina

Blue Fried Semi Friable Alumina is a low titania containing brown corundum produced
by controlled smelting of special grade Bauxite in an electric arc furnace at greater than
2000 deg C. The lower titania and an intermediate toughness between that of White and
Brown Regular corundum and strict control of this parameter over a narrow band
ensure consistent quality.

3. Fused Mullite

Fused Mullite is manufactured by fusing a mixture of high purity Bayer Alumina and
pure Quartz in a tilting type are furnace at a temperature around 2000 deg C. Controlled
cooling of the molten mass ensures a high degree of mullitization characterized by well-
defined columnar crystals.

4. Fused Zirconia

CUMI manufactures Fused CalciaStablized Zirconia material for use in the manufacture
of slide gate refractories used in the continuous casting of steel.

5. Sintered Alumina
 AzureS is a Sintered Alumina abrasives grain. It is manufactured by our patented state-
of-the-art process through sol-gel technology. This grade of sintered alumina abrasive
grain is well known for its high performance and unique fracture characteristic. It
performs better in high pressure grinding application and also withstands other sever
application conditions. It also provides cooler cutting and longer life of the wheel. All
these make this grain a unique choice for the abrasives manufacturers.

6. Zirconia Mullite

CUMI’s Fused Zircon Mullite (ZirMul) is manufactured by fusing a mixture of high purity
raw material by a unique process. The fused solidified ZirMul is crushed and graded to
custom sizes in a state of the art facility.

CUMI HEAT ZirMul is used in applications requiring high resistance to environmental

corrosion and a low coefficient of thermal expansion like refractory shapes requiring
resistance to molten slag and molten glass, ceramic pressure casting tubes etc.

7. Nebulox

Nebulox ultra high porous insulation refractories offers very low thermal conductivity
for high temperature applications up to 1700°C. Produced from pure raw materials
through a patented technology, Nebulox products are free from fibre and hence safe for
health and environment. The unique porous structure offers excellent thermal shock
resistance over a wide temperature range and can be easily machined to suit the specific
applications.

 Micro powders

1. Brown Fused Alumina – Micro Grit

Brown Fused Alumina Micro Grits are produced by the grinding & classification of
selected Macro grain feed stock in an advanced milling and classifying facility. This
ensures an iron free product of narrow particle size distribution with a high
repeatability.
 Major applications include:-

 Bonded abrasives and Coated abrasives

 Lapping & micro-blasting applications
 Surface hardening
 Brake linings

2. White Fused Alumina – Micro Grit

White fused Alumina Micro Grits are produced by the grinding & classification of
selected Macro grain feed stock in an advanced milling and classifying facility. This
ensures an iron free product of narrow particle size distribution and high whiteness.

Major applications include:-

 Bonded abrasives and coated abrasives

 Floor/Wall Laminates
 Thermal spraying (Plasma Spraying)
 Lapping & Micro-blasting applications
 Super Refractories, Ceramics and Tiles
 Brake linings

3. Semi Friable Alumina – Micro Grit

Semi Friable Alumina Micro Grits are produced in an advanced milling and classifying
facility using selected macro grains as feedstock.

These high quality powders are used in the manufacture of Bonded Abrasives and
Coated Abrasives.

4. Blue Fired Semi Friable Alumina – Micro Grit

Blue Semi Friable Alumina Micro Grits are produced in an advanced milling and
classifying facility using selected macro grains as feedstock. The fine powder is further
 heat treated at a high temperature in a specially designed kiln to build predictable
toughness characteristics.

These high quality powders are used in the manufacture of Bonded and Coated
Abrasives.

5. Silicon Carbide Powders – Micro Grit

Silicon Carbide Micro Grits are produced by milling of selected and cleaned macro grain
feedstock.

Major applications include:-

 Bonded abrasives
 Coated abrasives
 Super Finishing stones
 Lapping
 Silicon wafer slicing
 Brake Liners
 Diesel particulate filters

6. Thermal Spray Powders – Micro Grits

CUMI produces Pure Alumina, Alumina – Titania Composite, Pure Titania and pure
Chromia Powders for thermal spray and plasma spray applications.

The closely controlled Chemical Composition and particle size distribution are
instrumental in producing uniform high quality ceramic coatings. The dense and
rounded particles ensure free flow of the powders.

1.3 Customers of the company / Organisation-Level of Operations

ORGANIZATION STRUCTURE OF CARBORUNDUM UNIVERSAL LTD

 Managing Director

Vice President EMD

GM GM AGM Pro AGM Sr. Mgr. AGM

Marketing Technical EDA Accounts HR mfg

AGM Sr. Mgr Sr. Manager Deputy Sr.

Marketing Technical Manager Accounts Manager Manager

Deputy Junior Deputy Junior Junior Deputy

Manager Officer Manager Officer Supervisor Manager

Manager Staff Manager Staff Staff Manager

Junior Executives Executives

Officer

Junior Junior
Staff
Officer Officer

Staff and Staff and

Operatives Operative

1.4Competitors of the Company

COMPETITORS

 Grindwell Norton Ltd

 Orient Abrasives
 Wendt Ltd

COMPETITORS IN EMD
 There are only few companies dealing in the field of electro minerals. Therefore there
are only few competitors. The major competitors in the domestic market are Saint
Goban (Grinwell Norton Ltd) and Orient Abrasives. The major global competitors are
Washington Mills Pvt. Ltd. Saint Gobain, and Tray Bucker etc.

1.3 Strategies – Business ,Pricing, Management

Pricing Strategy

In the domestic market, the company sells the product at a premium price. However in
the export market, the company is facing great competition from the Chinese products
so, in this market the company sells the product at economic price.

Payment Collection

After the sales, the invoice details are sent to the corporate office in Chennai. The
collection is made in Chennai. Similarly cash payment for purchase is also made from
there.

1.6 CSR Activities

Preamble

The Murugappa Group is known for its tradition of philanthropy and community service .
The Group’s philosophy is to reach out to the community by establishing service-oriented
philanthropic institutions in the field of education and healthcare as the core focus areas.

Carborundum Universal Limited “The Company” has been uploading the Group’s tradition
by earmarking a part of its income for carrying out its social responsibilities. We believe
that social responsibility is not just a corporate obligation that has to be carried out but it is
one’s dharma. Therefore, our philanthropic endeavours are a reflection of our spiritual
conscience and this provides them a way to discharge their responsibilities to the various
sections of the society.
They have been carrying out Corporate Social Responsibility (CSR) activities for a long
time through AMM Foundation, an autonomous charitable trust, in the field of Education
and Healthcare, while also pursuing CSR activities for the benefit of community around our
local areas of operations viz., locations where our plants operating.

Corporate Social Responsibility Purpose Statement

The Company shall seek to impact the lives of the disadvantaged by supporting and
engaging in activities that aim to improve their wellbeing. We are dedicated to the cause of
empowering people, educating them and in improving their quality of life. While we will
undertake programmes based on the identified needs of the community, education and
healthcare shall remain our priority. Across the different programme areas identified by
the company, it would be our endeavour to reach the disadvantaged and the marginalised
sections of the society to make a meaningful impact on their lives.

They are committed to identifying and supporting programmes aimed at:

 Empowerment of the disadvantaged sections of the society through education, access to

and awareness about financial services and the like;

 Provision of access to basic necessities like healthcare, drinking water & sanitation and
the like to the under priveliged;

 Work towards eradicating hunger and poverty, through livelihood generation and skill

development;

 Supporting environmental and ecological balance through afforestation, soil

conservation, rain water harvesting, conservation of flora & fauna, and similar programme;

 Promotion of rural sports, nationally recognized sports, paralympic sports and Olympic
sports through training of sportspersons;

 Undertake rural development projects;

 Any other programme that falls under our CSR purpose including those listed in schedule
VII of the Companies Act, 2013 as may be amended from time to time and is aimed at the

empowerment of disadvantaged sections of the society.

Scope

This policy will apply to all projects/programmes undertaken as part the Company’s
Corporate Social Responsibility and will be developed, reviewed and updated periodically
with reference to relevant changes in corporate governance, international standards and
sustainable and innovative practices. The policy will maintain compliance and alignment
with the activities listed in Schedule VII and Section 135 of the Companies Act 2013 and the
rules framed there under.

Governance

The approval of the CSR policy and oversight is the responsibility of the Company’s Board
of Directors. The responsibility of the CSR committee is to formulate the policy and to
administer the policy through implementing partner(s) or via self-implementation. The
CSR Committee shall provide guidelines for projects/partner selection to the respective HR
or CSR teams, wherever applicable. The CSR committee is to ensure that
projects/programmes are compliant with regulations and are monitored and reported
effectively. As the Company’s CSR activities evolve, the policy may be revised by the CSR
committee and approved by the Board of Directors.

CSR Expenditure

The CSR Committee shall recommend to the Board the amount of expenditure to be
incurred on the CSR activities to be undertaken by the company as approved by the Board.

In case of any surplus arising out of CSR projects, the same shall not form part of business
profits of the Company.

Implementation
The Company shall undertake CSR project/programmes identified by the CSR Committee
and approved by the Board of Directors in line with the CSR Policy.

The Company shall implement its CSR programmes/projects:

a) Through an implementation partner that can be a public charitable trust or a society

registered under applicable Acts or a Company registered under Section 8 of the
Companies Act 2013;

or

b) On its own, through the relevant HR or CSR department or

c) through its own foundation (if applicable) specifically created for implementing its CSR

initiatives.

The Company may enter into partnerships or alliances with NGOs, Trusts, or other
Corporate Foundations etc. to effectively implement its CSR programmes/projects.

The Company can also implement programme in collaboration with other company(ies), if

permissible and feasible in such a manner that the CSR Committee is in a position to report
separately on such projects / programs.

The Company shall formulate criteria and procedure for selection, screening and due
diligence of its implementing partners.

Monitoring and Reporting

The CSR Committee will oversee the implementation and monitoring of all CSR projects/

programmes and periodic reports shall be provided for review to the Board.

The Company will institute a well-defined, transparent monitoring and review mechanism
to ensure that each CSR project/programme has:
1. Clear objectives developed out of the societal needs that may be determined through
need assessment studies and research (secondary or primary);

2. Clear targets, time lines and measureable indicators, wherever possible;

3. A progress monitoring and reporting framework that is aligned with the requirements of

Section 135 of the Companies Act 2013 and the CSR Rules.

1.7 Exports or Imports

1.8 Collaborations & Expansions plans

Future plans

 Implementation of new chemical plant called cellars at Kalamassery

 Upgradation of substation for meeting increased power demand
 Integrated programs for cost reduction and increasing profits

1.9 Swot analysis

SWOT analysis is a tool for auditing an organization and its environment. It 1s the
first stage of planning and helps marketers to focus on key issues. SWOT stands for
Strengths, Weakness, Opportunities and Threats. A SWOT analysis (alternatively
SWOT matrix) is a structured planning method used to evaluate the strengths,
weaknesses, opportunities, and threats involved in a project or in a business
venture. A SWOT analysis can be carried out for a product, place, industry or person.
It involves specifying the objective of the business venture or project and identifying
the internal and external factors that are favourable and unfavourable to achieve
that objective. The technique is credited to Albert Humphrey, who led a convention
at the Stanford Research Institute (now SRI International) in the 1960s and 1970s
using data from Fortune 500 companies.

Strengths
 Company owns mines in Gujarat and also a hydroelectric project in Maniyar. This reduces the
cost of processing raw material and production

 CUMI is having a better organizational climate and manage the environmental effectively. The
company grows in an accelerated manner with new products and services.
 As it has been found that one of the major problem facing new firms is power and its cost to
maintain. CUMI was able to counter the problem to an extent by establishing a hydroelectric
plant in Maniyar.
 EMD has a very good working environment. It has got professionally managed personnel
department.
 The company has got professionally managed sales team with strong back up of reputed dealers.

 ISO 9001 certification also helps in obtaining some orders as well as maintaining the standard of
the company.
 CUMI has high capital investment. It acts as an entry barrier for new firms to enter to this field.

 CUMI has been in the field for more than half century. Hence it has deep knowledge about the
market.
 The company has triplicate collaboration with companies in USA & UK. Hence they can enjoy
benefits such as access latest technology, management techniques, etc.
 The company has to make strict rule regarding wearing of personnel protective equipment’s like
safety shoes, helmets, goggles, gloves, jackets etc.

Weaknesses

 The salinity of water has to be improved.

 The roads within the company are to be developed so that the man and material can be moved
easily.
 Promotion is based on the seniority not on performance.

 As the significant financial decisions are taken at the Head office at Chennai, the speed and
efficiency of the branch is not satisfactory.
 No permanent employees have been recruited for the last few years.

 The plant entirely depends on KSEB for power supply therefore power failure can affect the
production.
 Opportunities

 The company can introduce more of its product in the market.

 The company can produce new and improved products with less labour and advanced
technology.
 More mines have to be found. Globalization and liberalization can make its product globally
acceptable.
 The company can employee the best brains from top business and technical institutions for
better working and management.
 Foreign acquisitions and merger make it possible to oversee the market

Threats

 Chinese product threatens the company since it is cheaper.

 CUMI faces stiff competition from the world merger and local players into the market.

 Power and other equipment’s are expensive.

 The demand for abrasives has fallen down because of industrial and economic shutdown.

 Rise in the cost of essentials such as power, raw-materials, freight charges and unavailability of
raw-materials.

An Overview of the Industry

2.1 Brief History of the Industry

Aluminum is mainly produced from bauxite. Over 90% of the world’s bauxite resources are
concentrated on the tropical and sub-tropical belt in Australia. Guinea. Jamaica. Surinam, Brazil, and
India. Its applications are widespread and include spark plugs, tap washers, electronic substrates,
grinding media, abrasion resistant tiles, cutting tools- bio ceramics and laboratory ware and wear
parts etc.
Alumina or aluminum oxide is produced from Aluminum ore also known as bauxite. Despite its name,
it has nothing to do with clay or black soil but resembles a flour or very white sand. Alumina is then
transformed into aluminum through electrolytic reduction. One tone of aluminum is produced from
every two toners of alumina. Fused alumina is made in electric arc furnaces by passing a current
between vertical carbon electrodes. The heat generated melts the alumina. The furnace consist of a
water cooled steel shell and 6-8 tones batches of material are fused at any one time. The fused
alumina has high density, low porosity. low permeability and high refractoriness. As a result it is used
in the manufacture of abrasives and refractory.

Bauxite consists of 40-605 alumina as well as earth silicon, ferrous oxide, and titanium dioxide. To
separate pure alumina, the Bayer process is applied. The ore is heated in an autoclave with caustic
soda. It is then cooled and a solid residue (red mud) is separated from the liquid. Aluminum
hydroxide is then extracted from this solution and calcined to produce pure alumina.

Over the past 40 years there has been a continuous improvement in the technology used to produce
aluminum. The focus has been on the size of the electrolytic pot in which the aluminum is smelted
and the amperage at which it is operated through the introduction of the pre-baked anode
technology, which replaced the Soderberg technology. Whereas in the 1960’s a typical new smelter
operated at 120KA improved smelting technology raised the amperage of potlines progressively,
where today 300KA technology is widespread and 350KA technology is available.

One of the main inputs in aluminum smelting is alumina, which in turn depends on bauxite as critical
input. Accordingly, many countries with bauxite deposits are interested to develop an integrated
aluminum industry. Given that these are globally traded commodities with global prices. Each of
these investments has to be evaluated on its own merits. In strong contrast to aluminum smelting, it
should be noted that the decision to invest in bauxite mine or an aluminum refinery does not
depends on an inexpensive power source. In a developing country with few major industries, it is
often argued that the government should subsidize a selected number of industries, partially to
offset other disadvantage. Aluminum production technology applies pre-baked anodes, a method
used at many European and American aluminum smelters, and characterized by less power
consumption and a negative impact on the environment. The anodes are baked in huge gas furnaces
and then having been fixed into holders, are lowered into a furnace. Consumed electrodes are
replaced with new ones and the remaining ones sent away for recycling.
About 89% of India's recoverable bauxite reserves are of metallurgical grade. Orissa, Andhra Pradesh,
Madhya Pradesh, Gujarat, Maharashtra and Bihar are the principle states were bauxite deposits are
found in the country with Orissa and Andhra Pradesh accounting for bulk of it.

An abrasive is a hard, tough and water resistance substance for grinding and polishing operations.
Manufactures through a complex and high technology process, these abrasives are in metal removal,
cutting and finishing operations in almost all industries.

Abrasives are the most used materials across the various industries for cleaning the hard surface,
grinding and polishing. An abrasive helps to provide surface finish and shape for the material.
Abrasives are mineral materials available in different sizes, shapes, and sizes depending upon the
need. They are used to clean, abrade, scour, grind and remove solid materials by the action of
rubbing. Two kinds of abrasives are available in global abrasives market as synthetic and natural.
Most of the natural abrasives have been replaced by synthetic abrasives in the abrasives market due
to their consistent properties as required in industrial applications. Apart from natural diamond most
or the abrasives are variable with their properties. One of the basic properties an abrasive must
possess is hardness and that it must be harder than the material to which is polished. grinded or
removed.

Abrasives market covers wide variety of materials used on large scale in various industries such as
transportation, metal fabrication, machinery and electronic equipment. General application of
abrasive material includes grinding, tumbling media, cutting wheels, tool sharpening and metal
cleaning. Some of the high-end industrial application of abrasives material market are peening, de-
flashing, paint stripping, blast cleaning and de-burring.

On the basis of product type, global abrasives market is segmented as coated abrasives, steel
abrasives, loose abrasive grains, raw super abrasives, bonded abrasives and others. As of 2013,
amongst the product type segments, bonded abrasives segment is predominant in terms of market
share followed by coated abrasives and loose abrasive grains.

The bonded abrasives market segment is expected to maintain its dominant position during the
forecast period. Whereas. in terms of revenue, super abrasives is the fastest growing segment in
global abrasives market with a double digit CAGR.
Additionally, trends in global abrasives market such as use of abrasives in blast cleaning and water jet
cutting technology in industrial applications for achieving faster and efficient operation is increasing
significantly and has drastically contributed to the increase in demand for the abrasive products.

THE GLOBAL SCENARIO

In recent years there has been an upsurge in the price of aluminium, largely due to increased
demand from China and, to lesser extent, India. While supply has kept pace, partly through the
expansion or reopening of older, less competitive factories, which are often in areas that once had an
advantage with respect to energy costs. It is forecast that there will be a shortage of global aluminum
smelting capacity within five years.

The aluminum, alumina and bauxite industry must focus on innovative measures to come out of the
global recession. For this, the industries should focus on the optimum use of the capacity, effective
utilization of manpower and raw-materials, adoption of innovative marketing strategy, waste
utilization and use of modern technology in the production process. Such important indices need to
look at with seriousness for reviving the growth in this sector.

The current global situation of the aluminum industry and the potential of new source of low cost
energy also mean that investors are likely to show a keen interest in exploring new possibilities in the
region.

Aluminum Oxide industry is an industry that migrates to wherever the comparative advantage
happens to lie and, to be economic, must be undertaken on a large scale requiring large long-term
base load electric power. The two regions are also home to important international sources of
bauxite, the main raw material for the production of aluminum. Moreover, a large plant for refining
bauxite into alumina which is then smelted into aluminum is nearing completion in Guinea. This
suggests that specific countries or group of countries could have a comparative advantage in
developing an integrated aluminum industry, including the mining and refining of bauxite into
alumina and the smelting of alumina into aluminium.

The global abrasives market which is a major user of alumina is estimated to grow two told in terms
of market revenue, with a double digit CAGR for the forecast period. The global abrasives market is
segmented in seven key regions which are North America, Latin America, Western Europe, Eastern
Europe, Asia-Pacific, Middle East and Africa and Japan. As of 2013, Asia-Pacific abrasives market
 dominated the global abrasives market in terms of volume followed by Western Europe and North
America. The growth of Asia-Pacific abrasives market is supported by various factors such as
increasing production of automobiles, electronic equipment, medical devices and packaging
especially in emerging economies such as India and China. The government norms on the use of silica
abrasives, volatile prices of raw materials in production of abrasives are the major challenges of the
global abrasives market.

Here is a list of the Biggest Abrasive Suppliers in the World:-

1. Saint Gobain
 Saint Gobain – Founded in 1665, headquartered just outside of Paris, France.
 Added abrasives and ceramics in 1986 to their existing product lines, then other construction
materials. Manufactures all three types of abrasives: Bonded, coated, and diamond, under three
brands: Norton, Winter, and Flexovit.
 Products: 250,000 +
 Subsidiaries: 3 abrasives brands, distributors in 26 countries.
 Employees: > 16,000
 Revenue: Abrasives revenue unknown
2. TYROLIT
 TYROLIT – Established just after WWI, headquartered in Schwaz, Austria.
 Was an original offshoot of the Swarovski-Crystal Factory.Company manufactures conventional and
super-abrasive grinding wheels, cut-off wheels, diamond tools for the construction and stone
industries, sawing tools, dressing tools, and coated abrasives.
 Products: 80,000
 Subsidiaries: 29 producing in 12 countries, distributors in more than 65 countries.
 Employees: 4,655
 Revenue: 562 million euros (2013)

3. SaitAbrasivi

 SaitAbrasivi Established in 1953, headquartered in Collegno near Turin, Italy.

 Two factories in Italy produce cutting and grinding wheels, paper, cloth and fiber-backed coated
abrasives.
 Products: 90,000+
 Subsidiaries: 6 in Europe and the Americas, 150 distributors worldwide.
 Employees: >200 in sales alone
 Revenue: Unknown

4. Sia Abrasives Industries

 Sia Abrasives Industries – Founded in 1867, headquartered in Frauenfield, Switzerland.

 First a chemical company, Sia now manufacturers five styles of abrasives: Bonded, coated, foam,
non-woven, and micro-abrasives in different sizes and grits. Exports more than 90% of its products.
 Products: 2 brands – one for the trades, one for do-it-yourselfers
 Subsidiaries: Producing in 17 countries, distributors in 40 countries.
 Employees: 1,250
 Revenue: Unknown.

5. Winoa Group

 Winoa Group – Founded in 1961, headquartered in Le Cheylas, France.

 Produces Steel abrasives and diamond cutting tools. World leader with 1/3 of the world market.
 Production: Unknown
 Subsidiaries: 13 plants on 4 continents, 240 distributors worldwide.
 Employees: 1,051
 Revenue: $420,000 million

Due to rising demand of loose abrasive grains from abrasive product manufacturers, the loose grain
segment is estimated to record strong growth during the forecast period in the abrasives market. As
of 2013, use of abrasives in machinery is the predominant industry for abrasives. This is followed by
metal fabrication, transportation and electronic equipment. However, industries such as
transportation and electronic equipment are estimated to record robust growth due to higher
demand for automobiles and electronic appliances. Apart from this use of abrasives in construction,
cleaning, maintenance, power generation and medical devices are expected to rise significantly in the
coming years thus driving demand in global abrasives market.

THE INDIAN SCENARIO

The Indian Abrasives Industry is catered by a few large players and numerous smaller players that
specialize in selected products where imports from China cater to the lower end of the market. Due
to the soft market conditions in many advanced economics, India is becoming a focus market for
major global players resulting in intense competition. The market is getting increasingly crowded by
overseas competition and low cost imports from ASEAN countries. The world Abrasives market which
is currently valued at approximately USD 36 billion is estimated to reach USD $51 billion by 2019.
North America and Europe together account for 50-55 per cent of the abrasives consumption
followed by China with 17-20 per cent. The Indian Abrasive market size is estimated to be above INR
25 billion.

In India, the abrasives industry is dominated by Carborundum Universal and Grindwell Norton, which
command 70% of the Indian abrasive market size. The bonded abrasives segment and the coated
abrasives segment are important segments in the Indian scenario and contribute maximum in terms
of revenue to this industry due to higher comparative margins. Besides the two top players, there are
several abrasives marketed by China, Japan and Europe. The abrasives from China are generally the
lower end ones. Super abrasives have been seeing growth in the past couple of years and this
segment is dominated by the German company, Wendt, which commands 35% of the market share
in this segment.

The abrasives industry caters to industries such as Steel, Automobiles, Auto components, General
Metal Fabrications and Woodworking. The dependence of the industry on each one of them is about
15% each and therefore the industry enjoys less dependency on these related industries. Taking into
account the fast pace growth of the Indian economy and the push given to manufacturing and
industrial activities under the Central Government’s “Make in India” initiative in this situation seems
highly unlikely. The industry also contributes to the exports of the nation and companies such as
Carborundum Universal have manufacturing facilities in Russia, China and are exporting abrasives
around the world.

2014-2015 was the fourth consecutive year of low industrial growth and though there are some signs
of recovery, it is too early to say whether the recovery will be weak or strong or whether it will be
sustained. Low inflation and a stable Rupee are the positive aspects of the economy and could fuel a
cyclical upturn of industrial activity. Under the current circumstances, a gradual industrial revival is
the most likely scenario.
 With the prices of bauxite and power the two most important inputs under government control,
governments can do have considerable influence on entry and development of private sector
investors. Government exercise the prominent role in the capacity as:

 Regulators: tax regimes, price controls, environmental, commercial and industrial policies.
 Suppliers or granters of access for mining rights and power development.

There are 4 major players in the abrasives market in India and they are listed by their net annual
sales as shown below:-

Company name Net Annual Sales (cr)

Carborundum Universal 930
Grindwell Norton 793
Orient Abrasives 366
Wendt 82
Table 2.1

If you compare them by Market Cap, the same order is seen.

Company name Net Annual Sales (cr)

Carborundum Universal 2752
Grindwell Norton 1300
Orient Abrasives 413
Wendt 307
Table 2.2

There lies immense potential in the abrasive industry. As stated earlier, the push given to domestic
manufacturing under “Make in India” initiative will help in attracting more investment towards
production in India which will help this industry and all those that make use of this industry’s
products.

The INR 25 billion organized Indian abrasives industry is expected to grow at a five-year CAGR of 13%
to INR 40 billion, in tandem with the strong economic growth expected in India. Traditionally too, the
growth in the abrasive industry has been in sync with India’s GDP growth. This highlights the heavy
dependence of the industry on India’s economic performance. The robust growth of India’s GDP of
over 7% is therefore a big advantage to the country.

Super abrasives currently make up only 10% of the abrasives industry, while the conventional
abrasives (i.e. bonded and coated) account for the rest. Increased awareness about the high-end
technology and benefits of super abrasives is slowly resulting in a preference for such products. Use
of them however in industries other than automobiles is still at a very nascent stage. With increasing
awareness, it is expected that the usage of super abrasives will increase over a period of time. This
therefore brings out the opportunities for diversification and expansion that lies for the industry and
will also enhance margins and overall profitability.

2.2 Business process of the industry

Investment casting, also known as ‘lost wax’ casting, is an increasingly popular

method of manufacturing, particularly in high value applications or where a high
degree of precision is required.

The initial process starts with a wax replica of the part required. Several parts can
be joined onto a central fixture, which is then coated several times. The resulting
shells are then heated to remove the wax, leaving a hollow mould into which molten
metal is poured to create the casting.

Items as varied as automotive components and industrial and gas turbine blades are
commonly manufactured in this way. However, with investment casting typically a
more expensive process than the alternatives such as sand, die or gravity casting,
producing higher value, more precisely manufactured parts, any subsequent processes
must be equally precise to avoid the risk of damage or loss of parts.

As with most other casting processes, once the initial investment casting process is
complete, one or more abrasive processes are typically required to remove
imperfections and deliver the required surface finish.
The abrasive process is integral to product quality, with investment by the leading
players in the market creating products to enhance production quality and accuracy
at all stages.

In fact, introducing abrasive processes can help reduce cost in the manufacturing
process even before casting begins. A variety of handpads are available which can
remove the imperfections on the wax pattern to help reduce the number and extent
of abrasive processes on the final casting. Meanwhile, moulded radial brushes can
 be used to clean wax deposits from the curing oven, with none of the risks of flying
wires posed by wire brushes.

Casting preparation
After cooling, the casting needs to be removed from the central fixture using a large
cut-off wheel. The next process is stock removal from the casting. This is usually the
most labour-intensive process and typically requires a heavy duty grinding belt.
Many companies choose to invest in automatic or semi-automatic equipment for
this task, with robots very much at the fore to deliver faster results.
Recent advances in abrasive grain technology in belts – in particular, 3M Cubitron
abrasive grain which sharpens as it wears; resulting in faster cut rates – are leading
to reductions in process times, cooler running temperatures and longer belt life.

Finishingprocesses

In high-end applications where a premium surface finish is required, a ‘highlighting’

process may be included. The aim of this is to highlight and remove any small surface
defects, imperfections or inclusions on the surface of the casting. 3M Scotchbrite
Surface Conditioning Belts can be used to treat the whole casting in one or to work on
smaller areas.
Virtually all castings have a ‘skin’ which needs to be removed, as will any platinum pins
and split lines in leading and trailing edges, root end and around the ‘fillet’ on turbine
blades. This is best achieved through the use of coated abrasive belts.

Once again, belts with a high cut rate and long life should be specified to keep
processing time to a minimum, whereas a grinding aid will be needed to deliver a
fast, cool cut on heat-sensitive metals such as titanium. Medium grade belts are
available in varying degrees of coarseness to deliver the required finish.

For intermediate blending and finishing of split lines or aerofoils, or as an alternative to

surface conditioning belts for the highlighting process, structured abrasive belts should
be employed. Research and development in this area by 3M has created Trizact
Structured Abrasive Technology, based on three-dimensional structures containing
multiple layers of abrasive, with a new layer exposed as each structure wears down to
deliver a consistent, predictable finish, with an even cut rate and long belt life. These
products deliver a higher quality finish than conventional coated abrasives, while in off-
hand applications, they can also produce a higher cut rate than non-woven belts while
maintaining the same finish quality in more demanding applications such as casting
skin removal.

Once this step is complete, surface conditioning belts can be used for final blending and
satin finishing prior to polishing, shot blasting and other subsequent processes.
Meanwhile, radiussing and general deburring, and finishing of leading and trailing
edges on turbine blades can be undertaken using non-woven wheels, which are
available for exotic metals, stainless steel or titanium. Scotchbrite non-woven wheels
produce less vibration and have a smoother running action than rubber bonded wheels.

About 3M
3M is a $23 billion diversified technology company which, since 1902, has been creating
innovative products that help make the world healthier, safer and more productive.
Well known 3M brands include Scotch, Post-it, Scotchgard, Thinsulate and
Scotch-Brite. 3M employs some 75,000 people worldwide and has operations in more
than 65 countries. The UK and Ireland is home to one of the largest 3M subsidiaries
outside the USA, employing more than 3,500 people across 17 locations, including 10
manufacturing sites. Products manufactured in the UK include coated abrasives,
occupational health and environmental safety equipment, adhesive tapes, industrial
microbiology products, drug delivery systems, high-performance coatings, secure
documents and passport scanners.
More information can be obtained at www.3M.co.uk/abrasives

2.3 Market demand and supply-Contribution to GDP-Revenue generation

The global abrasives market size is projected to grow from USD 46.4 billion in 2020 to
USD 58.0 billion by 2025, at a CAGR of 4.5% from 2020 to 2025. The growth of this
market is attributed to the growing automotive, metal fabrication, machinery,
electronics, electrical, medical, and construction industries have contributed
significantly towards the growth of the abrasives market. However, factors such as
uncertainty in economic conditions and rising raw material costs inhibit the growth of
the market.

In terms of value and volume, the coated segment is projected to lead the
abrasives market from 2020 to 2025.
Based on type, the coated segment is projected to account for the higher demand in
the abrasives market during the forecast period. Due to the focus on rapid
industrialization in emerging economies, and the development of the metal
fabrication industry is expected to shift the inclination of both suppliers and
consumers towards abrasive. Moreover, increasing demand for coated abrasives in
all end-use industries is expected to propel the growth in the abrasives market.

In terms of value and volume, the metal fabrication segment of the end-use
industry is projected to grow at the highest CAGR during the forecast period.
The metal fabrication segment is the fastest-growing end-use industry segment in the
abrasives market. This growth is attributed to its usage and demand in the metal
fabrication for cutting-off and grinding, removing welds and excess material, surface
blending, finishing, and polishing.

In terms of both value as well as volume, the Asia Pacific region is expected to

account for the largest share in the global abrasives market during the forecast
period.

Asia Pacific is the fastest-growing market for abrasives due to its increasing
economic growth. owing to the rapid growth in industries such as automotive,
machinery and metal fabrication in the region. The growth of this region is
supplemented by the increase in the consumption and production of industrial
 products in developing economies such as India and China. A rise in disposable
income, especially in developing countries, has led to an exceptional demand for
passenger and commercial vehicles. Thus, this augmented demand for automobiles
is expected to indirectly drive the growth prospects of the abrasives market in the
coming years.  The rise in the sales of electronic devices is likely to boost the
demand for coated abrasives in the electronic industry during the forecast period,
especially in the consumer goods sector.

2.4 Level and type of competition- Firms operating in the Industry

Industry Insights
The global abrasives market size was valued at USD 39.62 billion in 2018 and is estimated
to witness a CAGR of 5.9% from 2019 to 2025. The growth is majorly driven by the
increasing popularity of superabrasives and growing automotive production. The industry
is anticipated to witness significant growth on account of growing demand for the product
in grinding and polishing applications in end-use sectors such as automotive, Electronic
and Electrical (E&E) equipment, metal fabrication, and machinery.

Growing demand for abrasives from the automotive industry is the key driving factor for
the rising product demand. Abrasives play a vital role in manufacturing automotive
components in modifying operating parameters such as lowering the noise levels and
reducing the carbon dioxide emissions of high-performance engines, and machining of
components. According to OICA, the global cars and commercial vehicles production grew
by 9.2% in 2018 from 2013. This factor is anticipated to positively influence the product
demand from the automotive industry.
 Expansion of the construction sector on global scale is also expected to drive the growth in
demand for abrasives, especially superabrasives. Evolution of the manufacturing industry
has enabled improvement in precision tooling, which is useful in manufacturing smaller
components with greater accuracy, in turn boosting the consumption of abrasives used in
the process.

The product demand is however, expected to be restrained by stringent regulations and

cost of raw materials. There are certain restrictions with regard to the manufacturing
process of the product, which can cause obstruction in production. Abrasives production
requires raw materials in large amounts and concentration of raw materials in limited
number of nations is anticipated to affect the distribution strategies coupled with
additional costs such as transportation and fuel among others.

Report Coverage & Deliverables

PDF report & online dashboard will help you understand:

 Competitive benchmarking
 Historical data & forecasts
 Company revenue shares
 Regional opportunities
 Latest trends & dynamics
Material Insights
In terms of material, the abrasives market has been bifurcated into natural and synthetic.
The natural segment accounted for a volume share of 16.7% in 2018. The small share of the
segment is owing to the high production cost and less availability. U.S. is a significant
market for natural materials due to production of garnet in the region.

Synthetic materials segment is forecast to register a CAGR of 6.2% in terms of revenue,

over the forecast period. High demand for fused aluminum oxide and silicon carbide
abrasives is a major reason behind the growth of the segment. Ceramic grain abrasives held
one-fourth share of the synthetic materials segment in 2018, in terms of revenue.

Ceramic segment can be further segregated into coated and bonded ceramic. Bonded
constitutes a higher share than the coated variant. The demand for bonded ceramic
abrasives is high in Asia Pacific owing to the presence of a large players in the region.

End Use Insights

Automotive held the largest revenue share of 36.6% in 2018. Abrasives are used for
various applications such as coarse sanding, lacquer sanding, repair sanding, and
polishing.Superabrasives in the form of diamond discs are preferred for grinding and
polishing. Growing automotive production is expected to boost the consumption of
abrasives over the forecast period.

Machinery held the second largest market share in 2018. The demand for advanced
abrasives in specialized applications, including the machining of metal matrix composites
and advanced ceramics, is expected to witness promising growth. Robust growth in Asia
Pacific machinery industry is expected to drive the growth in the forthcoming years.

Metal fabrication is projected to register highest CAGR in terms of revenue over the
forecast period. The segment growth is driven by increasing consumption for fabricated
parts in aerospace, automotive, ship building, and various other industrial sectors.

Product Insights
Based on product type, the market is segmented into bonded, coated, and superabrasives.
Bonded was the largest segment in 2018, accounting for a volume share of 74.3%. Bonded
abrasives are available in different forms like wheels and discs and they find application in
precision and rough grinding. The growth of automotive industry is anticipated to boost
the segment growth over the forecast period.

Coated abrasives consist of thin layer of grains, attached to a substrate like paper or cloth
with the help of adhesives, for example, sandpaper. These are available as rolls, discs, belts,
and sheets, among others. The product growth is attributable to its growing demand from
Asia Pacific, especially in China and India where these are used in applications such as
grinding, polishing, and sanding various types of materials including leather, rubber, wood,
ceramics, and others.

Superabrasives segment is forecast to expand at an estimated CAGR of 6.4% during the

next seven years, in terms of revenue. These are used for hard materials to provide high
quality surface finish. Growth in manufacturing sector across the globe is anticipated to
boost the consumption of the product over the forecast period.

Regional Insights
Asia Pacific was the largest regional segment and accounted for a volume share of 51.1% in
2018 of the global market. The demand for abrasives is estimated to be steady owing to the
surge in construction and manufacturing sectors. The emerging economies in the region
acquiring high-end technology for the manufacturing of customer-specific abrasives is also
expected to augment the market growth.

China held the largest share in Asia Pacific accounting for a volume share of 42.9% in
2018.The market in China is mature with the presence of numerous unorganized players
and abundant raw material availability. As per a 2018 report published by the U.S.
Geological Survey, China was one of the largest producers of fused aluminum oxide and
silicon carbide globally.

North America is expected to expand at a CAGR of 4.9% in terms of revenue, over the
forecast period. The regional demand is led by U.S., which is expected to witness significant
gains in terms of market share over the forecast period. The development of precision
tooling and sophisticated machine part manufacturing units in North America is expected
to promote market growth in the forthcoming years.

Abrasives Market Share Insights

Competition in the market is intense as most of the products are priced similarly, even
though each company's products may have slightly different characteristics. The 3M
Company, Saint-Gobain, Robert Bosch GmbH, NIPPON RESIBON CORPORATION,DRONCO
GmbH, and KWH Mirka are among the key manufacturers. New product development is
one of the major strategic initiatives adopted by the players. For example, in November
2019, Mirka launched a new WPF Next Gen paper abrasive that is suitable for both dry and
wet hand sanding.

2.5 Pricing strategies in the industry

2.6 Prospects and challenges in the industry

Abrasives products as integral consumables of industrial production and processing, are

also known as the industrial consumables that we generally said. Abrasives products are
usually used in many areas, and also can be used in most industrial production and
industrial processing, which have always enjoyed the reputation of “industrial teeth”. There
are only two functions about abrasives products: One is the cutting and the other is
grinding and polishing. Industries involved include machinery production, equipment
manufacturing, automobile polishing, furniture polishing and so on.

Along with the economic development in our country, all walks of lives have great
progress, which also stimulates the development of the abrasives industry. However, it also
exposes some problems in the development process of abrasives industry, and the
technology and product innovation, energy conservation, emissions reduction and other
problems all restrict the abrasives industry. Abrasives industry has attractively low
barriers to entry, which makes the entire industry scattered and full of chaos, and there is
also no uniform production and quality standards.

 Abrasives products have the problem about abrasive smelting in energy conservation and
emissions reduction as a special industry. The current domestic brown fused alumina has
excess production capacity, and the next step policy priorities will phase out the backward
production capacity of alumina industry with the implementation of the policy of energy
conservation and emissions reduction. In the next five years, the development tone of the
abrasives industry will also be the fundamental key of whole national economic policy.

Experts think that if we want to keep healthy and orderly development of abrasives
products industry, we also need to solve the following several aspects: scattered enterprise
production ability, small scale, and low efficiency. At present, the scale and structure of
abrasives products enterprises in our country are not reasonable. It still has low industrial
concentration, and small businesses still account for a significant share; The research and
development ability of new products is weak, and the domestic abrasives products are
mainly concentrated in the low-end market, whose technology content is low. And it lacks
high-end technology products, mainly relies on import, and can only meet a third of the
demand of automotive, aerospace, machine tools, bearings, locomotives and shipbuilding
industry; Excess capacity and serious low product homogeneity both need to be solved,
especially the alumina production.
The beginning of the 12th Five-year Plan has brought great opportunities and challenges

for the development of abrasives products industry. Energy conservation and emissions

reduction, and clean production will appear in the production areas of the abrasives

products industry. In addition, the policies for machinery, shipbuilding, automobile, aircraft

and other fields will also have great influence on the development and production of

abrasives products. Abrasive s products enterprises should begin from the direction of

research and development of new products and technology innovation seeking

breakthrough, develop high-end abrasives products, and reduce the dependence on

imports. In the next five years, the development tone of abrasives products industry will

also be the fundamental key of whole national economic policy.

2.7 Key Drivers of the Industry

Key Players

Some of the key players operating in the global abrasives market are Asahi Diamond
Industrial Co., Ltd, Saint-Gobain Abrasives, Inc., 3M, Robert Bosch GmbH, Cabot
Microelectronics Corporation, Fujimi Incorporated, TYROLIT Group, Jason
Incorporated, Noritake Co., Ltd, DowDuPont, Inc., Schaffner Manufacturing Company,
Inc., DEERFOS Co., Ltd, Sia Abrasives Industries AG, Carborundum Universal Limited,
and KREBS & RIEDEL.

The key players in the global abrasives market are focusing on growth strategies such as
capacity expansions, mergers & acquisitions, product launches, and agreements to
maintain their market dominance and increase their global presence.

 In October 2017, Advanced Super abrasives Inc., the US-based leading

manufacturer of high-performance grinding wheels, announced to contribute
 around USD 26 million to expand their existing facility in North Carolina. This
expansion would help to strengthen its position in the US market.

2.8 Stalwarts in the Industry

Top five coated abrasives market vendors

3M

3M offers a wide range of abrasive products for metal fabrication, woodworking,

composite, and advance materials applications. Some of the abrasive products offered by
the company fall under discs, belts, wheels, brushes, and other accessories. Coated abrasive
discs and belts cater to a wide variety of requirements from metal fabrication, composite,
painted substrates and hard-to-grind materials.

Bosch

Bosch is a diversified technology and service company. Through its consumer goods
business, the company provides a wide array of coated abrasives. It offers segmented
diamond abrasive blades, continuous rim diamond abrasive blades, turbo rim abrasive
blades, turbo rim diamond abrasive blades, and diamond cup wheels.

Hermes Schleifmittel

Hermes Schleifmittel manufactures abrasives used to make functional and aesthetic

surfaces in industries such as aviation, furniture, metal fabrication, and automotive. In
addition, it works in close collaboration with major abrasives machine manufacturers to
provide customers with specific abrasives process solutions used in the production of
precision components in the electronics industry and in the medical technology industry.

KWH Group
KWH Mirka is the abrasives business segment of KWH Group that engages in
manufacturing and marketing of paper, net, cloth, and non-woven-based abrasives,
polishing compounds, and sanding machines for a wide range of surface finishing processes
related to the manufacture of composite parts, automotive refinishing and production,
metal processing, furniture production, and for sales in the paint, hardware, and machinery
trades.

Saint-Gobain

Saint-Gobain operates in the global coated abrasives market primarily through its five
subsidiaries: Saint-Gobain Abrasives GmbH (Germany), Saint-Gobain Abrasives Canada Inc.
(Canada), Saint-Gobain Abrasives Inc. (The US), Saint-Gobain Abrasives BV (The
Netherlands), and Saint-Gobain Abrasives Ltd. (The UK). Its abrasives business serves
markets like the automotive aftermarket, composites and marine, construction, floor
sanding, metal fabrication, and professional cleaning. The company markets its products
under the brand names of Norton and Carborundum.