Israeli toolmaker CGW plans jt ventures in Brazil, China
* Sales could reach $100 mln by 2017
* Plans acquisitions, jt ventures in Brazil, China, U.S., Germany
By Tova Cohen
TEL AVIV, Dec 12 (Reuters) - Camel Grinding Wheels (CGW), an Israel-based maker of grinding and cutting products, expects sales in 2013 to jump 19 percent and is seeking acquisitions and joint ventures to expand its presence overseas.
Owned by Kibbutz Sarid in northern Israel, CGW estimates sales in 2013 will reach $56 million for a compound average growth rate of 14 percent from 2009-2013.
Although growing above the industry average of 6 percent, CGW is still a small player in a $32 billion market dominated by companies such as Saint-Gobain, 3M and Swarovski Group's Tyrolit.
"We are a high-tech company working in a low-tech industry," Chief Executive Gadi Shelach told Reuters. "We can't compete with prices from China so we try to be in niche areas where the number of players is lower, as a lot of technology is needed."
Customers include Israel Aerospace Industries, Pratt & Whitney, Rolls-Royce and Israeli metal cutting toolmaker Iscar.
CGW's vitrified grinding wheels are used for grinding metal, glass, ceramics, stone and marble for the metal-working, aerospace and gas turbine industries.
Its resin bond discs are used in the building, metal and iron works industries while its coated abrasive products are used in the building, metal, wood and stone industries.
Earlier this year CGW paid close to $3 million for California-based Pasco, one of the top five U.S. makers of coated abrasive products such as belts, discs and sheets. Pasco will add nearly $10 million in revenue in 2014.
"The next step of our expansion will include China. We are selling there but would like to do a joint venture," said Shelach, noting he expects this to be finalised in 2014.
CGW also plans a joint venture with one of its clients in Brazil in 2014 followed by the acquisition of another plant in the United States in 2015. It is seeking to partner with a German company in 2015 or 2016 to target the automotive market.
CGW is profitable and Shelach believes sales will be close to $100 million by 2017.
Earlier this year, Warren Buffett's Berkshire Hathaway Inc bought the remaining 20 percent stake in Iscar for $2.05 billion in cash. Berkshire had bought 80 percent of Iscar for $4 billion seven years ago.
"We can be another Iscar. Their success is based on strong development and innovation and we have the same philosophy and the same vision," Shelach said.
CGW's owners are not interested in selling at this time though they have been approached by big companies.
"The owners' attitude is to leave the majority in their hands and if needed bring in a partner without losing the majority," he said.