A company statement said that the company had signed a joint venture agreement with Jingri and CEEB, the promoters of Jingri, to acquire 49 per cent in parent Jingri Industrial Diamond Company for an investment of $4.9 million (about Rs 23 crore).
The Chinese company is manufacturer of synthetic diamonds. A senior CUMI official said the stake was acquired in an all-cash deal and was funded by internal accruals.
The company plans to set up a 2000 tonne bonded abrasive plant at an investment of $5 million (about Rs 23 crore) in the Yanjiao province at a new site, land for which has been allotted by the province.
This plant will not require additional investments from CUMI, apart from the already invested amount of $4.9 million in the joint venture.
Since the stake will be acquired by the Indian company, with JINGRI issuing fresh shares to CUMI in the capital of Jingri. The joint venture will be re-christened as JINGRI CUMI Super Hard Metal Company.
According to the official, the plant is expected to go on stream by 2007, the bonded abrasives manufactured will be marketed under the CUMI brand name internationally. This facility will eventually house all the Jingri and its joint venture operations.
CUMI will supply the technology for the abrasive plant, besides it will also be involved in the management of the business as a joint venture partner.
The abrasive and ceramic company reported 100 per cent jump in net profit to Rs 77 crore (Rs 770 million) for the year ending March 31, 2006 compared with Rs 32 crore (Rs 330 million) the previous year.
Net profit included earnings of Rs 32 crore (Rs 320 million), which the company had garnered by selling its stake in Parry Agro. Total turnover registered 18 per cent growth to Rs 434 crore (Rs 4.34 billion) in 2005-06 compared with Rs 357 crore (Rs 3.57 billion) the last year.
CUMI completed its first international acquisition four months ago by acquiring the business of a Canadian coated abrasives distributor.
The company had acquired Abrasive Enterprises Inc, for an investment of Canandian $2.25 million (about Rs 9.5 crore). This has helped the company to gain a long-term presence in the North American coated abrasives market.
