INVESTOR PRESENTATION DISCLAIMER The communication may contain statements relating to future business developments, company’s performance and economic performance that may constitute ‘forward looking statements’. While these forward looking statements represent the company’s judgments and future expectations, a number of factors could cause actual developments and results to differ materially from expectations. The company undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances. CUMI @ 2015 2 Murugappa Group An Overview CUMI @ 2015 3 MURUGAPPA GROUP INR 269 Billion Conglomerate One of the largest family promoted, professionally managed, diversified business groups CUMI @ 2015 4 The Philosophy we cherish The fundamental principle of economic activity is that No man you transact with will lose; then you shall not. CUMI @ 2015 5 Murugappa Group Today ~ INR 269 Billion Conglomerate One of the largest family promoted, professionally managed, diversified business Groups… CUMI @ 2015 6 The Spirit of the Murugappa Group CUMI @ 2015 7 Social Responsibility AMM Foundation is a non-profit organization run by the Murugappa Group 1% of PAT from Group companies to AMM Foundation 4 Schools, a polytechnic; approximately 10,500 students 4 Hospitals - around 8.15 lakh patients treated last year Scholarships for needy meritorious students Scholarships for scholars for pursuing their professional degrees CUMI @ 2015 8 Carborundum Universal CUMI @ 2015 9 Birth Of CUMI • Incorporated as a joint venture 1954 between Carborundum Company USA, Universal Grinding Wheel Company, UK and the Murugappa, CARBORUNDUM UNIVERSAL India USA UK • Acquired a coated abrasives facility from Ajax products Pvt Ltd • Bonded abrasives facility set up in Chennai India CUMI @ 2015 10 Business Portfolio PBIT Share Sales Share CUMI – FY 15 Revenue :Rs. 20.2 bn EBIT :Rs. 1.9 bn Capital Employed :Rs. 14.9 bn Abrasives Ceramics Electro-minerals Revenue : Rs 8.6 bn Revenue : Rs 4.8 bn Revenue : Rs 7.3bn EBIT : Rs 0.6 bn EBIT : Rs 0.7 bn EBIT : Rs 0.8bn Capital Employed : Rs 5.5 bn Capital Employed : Rs 4.0 bn Capital Employed : Rs 4.3 bn Industrial Ceramics Super Refractories Wear Resistance Heat and Corrosion Abrasion Electro Resistivity Resistance Electro Minerals CUMI @ 2015 11 CUMI Consolidated – Exports its products to 50 countries – Over 20,000 varieties of Products – 29 manufacturing locations – 7 countries – Over 5000+employees – 2100+ outside India – Consolidated Gross Sales Rs 2131 cr (FY 14-15 ) – Market Cap~ Rs. 3500 cr CUMI @ 2015 12 CUMI World Wide- By Business Verticals RUSSIA Abrasives Ceramics Electro minerals USA CHINA Abrasives Abrasives Ceramics THAILAND Abrasives S. AFRICA EUROPE UAE INDIA AUSTRALIA Foskor Zirconia Electro Minerals Abrasives Abrasives Abrasives Ceramics Electro minerals Ceramics Electro minerals Abrasives l Ceramics l Electro Minerals CUMI @ 2015 13 Manufacturing Base Marketing & Distribution Base OUR VISION/MISSION We will be an Admired Company in Abrasives & Technical Ceramics, driven by Innovation, to create Stakeholder VISION VISION Wealth. Become one of the largest Abrasives (including Super Abrasives) / Technical Ceramics in the Company in the World by MISSION MISSION 2020. CUMI @ 2015 14 ABRASIVES CUMI @ 2015 15 ABRASIVES – Products & Application Bonded Products and other applications …. For Rough Grinding and Cutting applications:- General Engineering Fabrication Foundry and other applications …. Rolling Mills Projects Thin Wheels and other applications …. Coated Products CUMI @ 2015 16 ABRASIVES – Products & Application and other applications …. Wood working Metal working Construction Power Tools Rotary Tools Creep Feed grinding Cutting Tool industries Notch and Slot grinding Printing and Paper Roll grinding Tungsten Carbide Roll grinding and other applications …. Ceramic and Tile grinding Ceramic and Refractory grinding Super Abrasives Products Wood Working Tools Glass Industry CUMI @ 2015 17 ABRASIVES – Facilities Manufacturing Marketing & Distribution Thiruvottriyur, Chennai Hosur, Tamil Nadu Sriperumbudur, Chennai Uttarkhand CUMI Middle East India VAW, Russia CACCL, China Venlo Netherlands Overseas CUMI USA Wendt, India Wendt, Thailand/CME Sterling Abrasives, Gujarat Subs / JV’s Subs CUMI @ 2015 18 ABRASIVES – Performance Rs. Mil Consolidated Net Sales - Annual 0% -2.5% 6.3% +18.7% +26.7% + 6.4% +3.6% + 29% + 24.7% % sales in India 87% 83% 75% 70% 78% 74% 74% 74% 73% 77% CUMI @ 2015 19 Opportunities for CUMI Abrasives Infrastructure 100 smart cities across India Steel Industry – Roll Grinding wheels Fabrication – Thin wheel Freight corridor, Industrial Corridor Sagar mala - connectivity to the Port Gas Grids Auto & Auto Components – Crank/ Auto Refinishing – Coated National Optical fiber network up to Cam the village level Agri Rail Network Diamond Quadrilateral project – Bullet train General Engineering – Off hand/ tool Construction Industry- Thin wheels/ room wheels super abrasives CUMI @ 2015 20 Opportunities for CUMI Abrasives Energy Scarcity Oil-1 mbpd to be added Gas – 135 bcm to be added 1000 TeraWh to be added Thermal / Nuclear will dominate Renewable energies will rise Turbine grinding Zircon alloy grinding in the nuclear energy space Fabrication Wind Mill Fabrication Industrial Ceramics World Class Manufacturing Strong Technology Platform Global Reach Leadership Position in Key Markets CUMI @ 2015 22 INDUSTRIAL CERAMICS Product Range Wear Ceramics Technical Ceramics Grinding Wear Ceramic Engineered Ceramics Metallized Ceramics Media Resistant Lined Liners Equipment Applications Applications • Bulk Material Handling • Fluid Handling • Ceramic Tile/Mineral • Battery Tooling Processing • Ignition System • Coal Based Thermal Power • Ballistic Protection • Mining • Vacuum Interrupters • Cement • X Ray Tubes • Steel • Night Vision Cameras • Communication Devices CUMI @ 2015 23 INDUSTRIAL CERAMICS – Move up Value Chain • Currently we are in the business of Alumina based Ceramics. We constantly look at Products Competing Criteria extending offerings in that range and target newer industries. Technology, Process Metz Cylinders Capability • Move up the Value Chain constantly by offering high value products. We have been Armored & actively pursuing the same as depicted in the Engineered Technology, Process Capability picture alongside. ceramics Build customer facing entities as we have in • Wear & Corrosion Cost, Installation Australia to provide end to end solutions in resistant product Service Capability other geographies – South Africa / North America. Grinding Media Moving up the value chain Cost • Grow in Ceramic medical business CUMI @ 2015 24 Our Strengths… A Global Leader in Wear Protection Solutions State of art Ceramic Material Preparation Automation, Process Control & TPM Application Engineering & Design Customized Engineered & Metallized Ceramics ISO, EMS & OSHAS Certified CUMI @ 2015 25 Impact of Megatrends Infrastructure Mining Power Generation • Wear Protection Urbanisation • Metallized Cylinders Power Transmission CUMI @ 2015 26 Impact of Megatrends Global Rebalancing Manufacturing • Wear Protection • Metallized Cylinders Engineered Ceramics Emergence of • Affluent Healthcare CUMI @ 2015 27 SUPER REFRACTORIES CUMI @ 2015 28 SUPER REFRACTORIES– Product Range CUMI Refractory Products Fired products Monolithics Precast Shapes Conventional Silicon Carbide Dense (CUMIFRAC) Castables (CUMICRETE) Insulation Nitride bonded Castables Silicon Carbide (CUMICRETE Light Weight) Low cement Mulite (CUMILITE) castables (CUMIHICAST & CUMIPLASCAST) High Alumina (CUMILOX) Self Flow Castables (CUMIFLOW &CUMICAST EF) Zirconia Mullite and Zircon (CUMIZITE & CUMIZON) Ramming Mass (CUMIRAM) Insulation Firebricks (CUMILAG) Laying Mortars (CUMI Bond) CUMI @ 2015 29 SUPER REFRACTORIES • Refractory is any material that can withstand high temperature. CUMI is into High Alumina, Silicon Carbide, Zirconia based refractories which are capable to withstand very high temperature:- − Fired Refractories: Is a block of refractory ceramic material used in lining furnaces, kilns & fireplaces. A refractory brick is built primarily to withstand high temperature. − Monolithics : These are refractory material in powder form. These are materials which are installed as some form of suspension that ultimately harden to form a solid mass. • The division also manufactures and sells Anti-corrosive products: Corrosion is a degradation of materials’ properties caused by chemical reaction with their environments. Anti-corrosive products are used in plants/ products which undergo such corrosion. CUMI @ 2015 30 SUPER REFRACTORIES - Application Ceramic Industries Chemical Process Industries Non – Ferrous Insulators Carbon Black Aluminum Sanitaryware & Tableware Fertilizer Copper Abrasives Petro-Chem. / Refinery Zinc Wall Tiles Refractories Cement Iron & Steel Electro Ceramics Power Generation Sponge Iron (DRI) Glass Boiler Gas-Based Container Coal - Based Soda-lime Boro-silicate Foundries Decorative Fibreglass CUMI @ 2015 31 SUPER REFRACTORIES Ability to manufacture complex shapes and meet all surge requirements CUMI @ 2015 32 Roof Sheet for Chennai Metro FRP Roof sheets were required to shield the high voltage metro lines from interfering with flight path near the Chennai Airport Roof sheets made in specified Red & White colours by Prodorite-CUMI; Installation completed by Chennai Metro CUMI @ 2015 33 Opportunities for CUMI CERAMICS (IC+SR) Coal Washeries Ceramics for Steel