Carborundum Universal Ltd (CUMI) has initiated closure of its loss-making overseas units while stepping up investments in semiconductors, advanced ceramics and value-added materials as part of its long-term growth strategy.
The Murugappa group company has decided to wind up Germany-based Awuko and discontinue operations at South Africa-based Foskor Zirconia after prolonged losses and weak market conditions rendered the businesses commercially unviable.
Closure of overseas subsidiaries
CUMI International Ltd, the holding company of Awuko, has approved initiation of voluntary winding-up proceedings for the German subsidiary under applicable laws in Germany.
Awuko continued to remain under pressure amid mounting losses and an inability to turn around operations due to prevailing market conditions. Exceptional items relating to the closure amounted to ₹119 crore in FY26, said Managing Director Sridharan Rangarajan during earnings call.
Foskor Zirconia (Pty) Ltd, in which CUMI indirectly holds a 51% stake through CUMI International, has also failed to achieve sustainable profitability since 2013 despite several restructuring initiatives.
The company said rising electricity and input costs in South Africa, intensifying global competition and adverse foreign exchange movements made operations commercially unviable. Consolidated FY26 financials included a ₹16 crore write-down relating to the realisable value of various assets.
At the consolidated level, Rhodius posted a loss of ₹45 crore against ₹44 lakh in the previous year, while Awuko reported a loss of ₹75 crore compared with ₹58 crore earlier.
Investments in semiconductor, defence businesses
Despite the restructuring, CUMI is continuing with aggressive investments in future growth areas.
During the first half of FY26, the company commissioned the first module of an advanced components facility for semiconductor wafer fabrication equipment with an investment of ₹66 crore.
The facility includes end-to-end capabilities from high-purity powder preparation to precision machining and cleaning and will cater to global OEMs. Serial supplies of qualified products are expected to commence in FY27 with gradual ramp-up in utilisation.
In the aerospace and defence segment, the company has commissioned a new ₹49 crore facility to manufacture advanced ceramics for ballistic protection systems for vehicles and personnel.
CUMI is also upgrading its white fused alumina furnace from 2 MVA to 4.5 MVA at an investment of ₹53 crore, which is expected to substantially increase capacity and generate peak revenue potential of ₹95 crore.
The company has expanded treatment facilities with an investment of ₹30 crore, carrying revenue potential of about ₹120 crore.
Additionally, a pilot facility has been established for manufacturing ceramic powders for Solid Oxide Fuel Cells (SOFC), leveraging technology support from Central Glass and Ceramic Research Institute.
The company has also entered into a technology transfer agreement for manufacturing aluminium nitrate and silicon nitride powders.
Growth outlook remains strong
Another major growth project involves commissioning thin-wheel manufacturing capacity at Hosur using assets acquired from DRONCO. The ₹83 crore project can produce 46 million thin wheels with peak revenue potential of ₹120 crore.
CUMI said that it expects ceramics business growth to improve to around 14% next year against 6.5% achieved in FY26, driven by both industrial ceramics and refractory businesses.