Date:03/12/2005 URL: http://www.thehindubusinessline.com/2005/12/03/stories/2005120303700300.htm

Back Grindwell Norton to buy bonded abrasives unit of Orient Abrasives

Our Bureau

Chennai , Dec. 2

GRINDWELL Norton Ltd plans to acquire the bonded abrasives business of Orient Abrasives Ltd, for which the two companies have signed an agreement. The acquisition is subject to due diligence reviews and to regulatory and other approvals, according to a Grindwell Norton communication to the Bombay Stock Exchange.

According to reliable sources, the acquisition cost is likely to be around Rs 30 crore.

Orient Abrasives, according to the sources, is the third largest player in the bonded abrasives business and acquiring this business gives Grindwell Norton a strategic fit and will result in consolidation in the industry.

The Saint-Gobain group of France, which owns a 51 per cent stake in Grindwell Norton Ltd, is a leading manufacturer of abrasives and has a dominant position worldwide. Orient Abrasives is strong in certain areas.

Orient Abrasives is engaged in the manufacture of calcined and fused alumina products, refractories and monolithics, and bonded abrasives. Its bonded abrasives plant is in Bhiwadi in Rajasthan and was established in 1980 with technical know-how from Tyrolit of Austria, according to information available on the company's Web site.

For the year ended March 31, 2005, Orient Abrasives had gross sales of Rs 146.36 crore, of which, the bonded abrasives business accounted for Rs 25 crore.

After selling its bonded abrasives business, Orient Abrasives will concentrate on its other businesses. It plans to use a part of the sale proceeds to invest in a captive thermal power plant in its fused alumina products facility in Gujarat, according to sources.

Grindwell Norton recorded sales of Rs 265 crore for the year ending December 31, 2004. It is a leading manufacturer of abrasives (bonded, coated and superabrasives), silicon carbide, high performance refractories and performance plastics.

Orient Abrasives' shares closed on the BSE at Rs 36 on Thursday from yesterday's close of Rs 35.30, while Grindwell Norton shares ended the day on BSE at Rs 381.05 against yesterday's close of Rs 381.40.