Carborundum Universal to acquire Volzhsky Abrasives Works

Carborundum Universal Ltd has announced that the Company has entered into a binding MOU for the purchase of 84.14% of the ordinary shares of Volzhsky Abrasives Works located in the city of Volzhsky in Volgograd region, Russia.

Volzhsky Abrasive Works (VAW) is the largest producer of Silicon Carbide (SiC) abrasives in Russia, with 65,000 tons per annum installed capacity. VAW also produces Bonded Abrasives and Refractories. VAW's sales in 2006 was about US$ 54 million.

VAW management had been able to grow VAW by maximizing the SiC production as well as bring in Sound management practices. To take VAW to its next growth phase, clearly needed a Strategic Investor with interests in Abrasives, Grains and Refractories. The Company, is one of the 2 Companies globally with this range, and was hence a logical choice.

The Company is a fully vertically integrated Company with operations in Australia, Canada, China, Middle East, the US and in India. The Company brings to VAW its brands, market access, application engineering expertise and global management practices. This will help VAW to grow its Bonded and Refractory business as well as to move a part of the high volume SiC business to new value added micro abrasives.

The change in ownership is expected to benefit VAW's customers, employees and the community in Volzhsky as the Company is known for its Good Governance Practices. The deal will be formally concluded as soon as the necessary clearances including an approval by Russian Federal Antimonopoly Service are obtained. This is expected in July 2007.

Source : Equity Bulls

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