Chennai: August and September 2007 will be landmark months for the Rs526.77-crore turnover abrasives major Carborundum Universal Limited (CUMI), part of the $2-billion Murugappa group, as most of its capital expenditure investments within and outside India will begin to yield results.

The company''s Rs25-crore bonded abrasives plant set up in Uttarkhand will start production sometime August-September this year. The plant has a total capacity of 3,000 tonne per annum (tpa).

Similarly September will see the doubling of industrial ceramics capacity at its Hosur plant to 6,000 tpa going on stream and also the production of limited range of power tools at Bangalore.

In China CUMI''s joint venture company Jingri Cumi Super Hard Materials Company Limited is expected to start commercial production next month at its newly set up bonded abrasives plant. It was only in February/March this year the Chinese company started plant construction.

More than these, the company is keenly awaiting the Russian government''s nod for acquiring Volzhsky Abrasives Works for which it had signed a binding MOU with a consortium of investors to acquire an 84.14-per cent stakes in the Russian company.

According to M M Murugappan, chairman, all the activities relating to the acquisition like the due diligence has been completed. The company is waiting for the green signal for the deal from Russian Federal Anti Monopoly Service. According to CUMI, the Russian agency''s decision will be known soon.

Meanwhile CUMI''s other major projects - the Rs30-crore second super refractories plant at Ranipet with a capacity of 3000 tpa and the Rs40 crore metallised cylinder plant at Hosur would go on stream next year.

Explaining the reduced bottomline despite a higher topline for the first quarter of the current fiscal as compared to the corresponding quarter of the previous year, Murugappan cited the increased interest costs and depreciation as the reason. While the turnover from CUMI''s capital expenditures would kick in gradually the interest cost and depreciation would come into play immediately.

That apart the fluctuations in the foreign exchange market too contributed to a small extent in reducing the first quarter''s net. CUMI''s interest costs are expected to rise slightly as it has planned a mix of debt and internal accruals to fund the Russian acquisition. As of now a fresh equity issue is not on CUMI''s radar.