Carborundum Universal & Grindwell Norton collectively account for 70% of the abrasives industry & have monopolised their long-term standing in this business
03-Sep-2014 •Research Desk
This Murugappa group company is engaged in manufacturing and export of abrasives, industrial ceramics, refractories and electro-minerals with capacities in India, Russia and China. Electro minerals division which contributed 36 per cent to revenue caters to raw material requirements for abrasive and ceramics segment. The company generates 50 per cent of the revenue from exports exploiting the foreign market with presence in 46 countries.
This subsidiary of Saint-Gobain is a manufacturer of abrasives, silicon carbide, refractories and plastic products. The company derives over 70 per cent of its revenues from sale of abrasives and is the oldest player in the Indian market which made the first grinding wheel in India. The company derives its strength from its parent company Saint-Gobain and depends on Norton for technology.
The two companies account for 70 per cent of the total market share, making them a duopoly with equal market share. The sector has felt the pinch with subdued top-line growth and rising input costs. Between the two, Carborundum has been hit hard with fall in its margin due to rising power and fuel costs. Whereas, Grindwell has been able to effectively manage its expenditure to maintain its margins, with backward integration of silicon carbide, a key raw material for abrasives and better technology.