Birla's strategy was to integrate all these operations seamlessly
with one another and the ones in India. For instance, in Canada,
two joint ventures (JV), AV Cell Inc and AV Nackawic Inc, produce
the raw materials for the group's Indian Viscose Staple Fibre
(VSF) business. Liaoning Birla Carbon is a pioneering JV in
China that manufactures and markets furnace grade carbon black,
building on the group's experience from its existing carbon
black companies in Thailand, India and Egypt. And there are
strong synergies between the copper operations of Aditya Birla
Minerals Ltd in Australia and Birla Copper in India.
It is Birla's immense clout in India that allows him to venture
bravely into global waters. The Aditya Birla Group is India's
third largest business house. It is a leader in many of the
businesses in which it operates including non-ferrous metals,
cement, VSF, carbon black, viscose filament yarn, chemicals,
fertilisers, insulators and branded apparel. The group is
also active in services sectors like insurance and asset management,
software and telecommunication.
The Aditya Birla Group has annual sales of $8.3 billion and
a market capitalisation of $14 billion. Its important Indian
companies include Grasim Industries Ltd, Hindalco Industries
Ltd, Aditya Birla Nuvo and UltraTech Cement Ltd. Among its
important JVs are Birla Sun Life (financial services) and
Birla NGK (insulators). The group employs 72,000 people across
the world. More than 30 per cent of the group's revenues accrue
from its global operations.
Birla took over as chairman at 28 on the sudden demise of
his father, noted industrialist Aditya Birla, after whom the
group is named. Birla, who trained as a CA and holds an MBA
from the London Business School, is also on the boards of
major Indian companies like Tata Iron & Steel Company
and Maruti Udyog Limited, apart from being the chairman of
the flagship companies within his group.
He is also on the board of the G D Birla Medical Research
& Education Foundation and a member of the board of governors
at the Birla Institute of Technology & Science (BITS),
Pilani, and the Indian Institute of Management, Ahmedabad.
Birla is also a member of the London Business School's Asia
Pacific advisory board.
He holds several key positions on various regulatory and
professional boards, including chairmanship of the advisory
committee constituted by the ministry of company affairs for
2006 and 2007, membership of the prime minister of India's
advisory council on trade and industry and chairmanship of
the board of trade reconstituted by the union minister of
commerce and industry.
Most recently, the government of India's Ministry of Finance
nominated Birla on the Central Board of Directors of the Reserve
Bank of India, with effect from 27 June 2006.
Silencing the sceptics
When Birla took over the mantle at the Aditya Birla Group,
sceptics doubted his ability to handle a mammoth business
house with interests spanning viscose, textiles and garments
on the one hand and cement, aluminium and fertilisers on the
several of which were then in the grip of a cyclical
downturn. There was also the question of how he would transform
the traditional babu culture (internal bureaucracy)
of the group an anomaly in a rapidly globalising environment.
Birla proved all his sceptics wrong. He changed business
strategies, brought in sweeping changes, professionalised
the entire group and replaced internal systems. He reduced
his group's dependence on the cyclic commodities sectors by
entering consumer products. He hired well-known professionals
like D Bhattacharya,
Dr Santrupt Misra, Sumant Sinha and Sanjiv Aga and gave them
independent charge of key business functions. At lower levels,
he inducted fresh talent from management schools in India
and abroad and set up Gyanodaya, an in-house management learning
Birla also put on hold projects, some already announced,
others at the take-off stage. These included the Aditya Birla
Group's plans to enter sugar, paper, steel, glass fibre and
Purified Terephthalic Acid (PTA) a key intermediate
used in the manufacture of textiles. The group has also exited
from unviable businesses like seawater magnesia and oil refining.
Seeing a future in cement, the group has strengthened its
cement business by buying out the cement business of engineering
and construction giant Larsen & Toubro (since then renamed
UltraTech Cement). It also acquired Indian Aluminium Company
from Alcan of Canada.
While under him the group has consolidated its position in
existing businesses. It also carefully ventured into sunrise
sectors like cellular telephony, asset management, software
and BPO. In telecom the group bought over a 48.14-per cent
stake from the Tatas and is now a 98.3-per cent stakeholder
in Idea Cellular Ltd. The group also bought over Byte International,
a US-based e-learning firm; PSI Data Systems Ltd, TransWorks
Information Services Pvt Ltd and copper mines in Australia.
On 23 June 2006, the Aditya Birla Group announced that it
has made an offer to acquire, through TransWorks, Minacs Worldwide
Inc, Canada's leading BPO provider. The acuisition is expected
to cost US$125 million in all.
Clearly, the low-profile Birla's multi-pronged strategies
are working. In the last decade he has not only evolved into
a respected industrialist, he has also succeeded in multiplying
five-fold his group's revenues. As one of the youngest and
most successful business leaders in this part of the world,
perhaps his best is yet to come.
Compiled by Raju Bist