Kumar Birla on world stage

Sandeep Bamzai

Kumar Mangalam Birla, chairman of the Rs 27,000 crore AV Birla group, is scaling up his international operations, which contribute a third to his topline in the new financial year. Sources in the group told the Hindustan Times that in 2004-05, almost 35 to 40 per cent of the group's revenues will come from overseas business interests.

While the exact details of his global expansion programme are not known, the broad contours include acquiring a third copper mine in Australia after Nifty and Mount Gordon, putting up a greenfield acrylic fibre facility in Egypt, enhancing Alexandria Carbon Black operations again in Egypt, exploring the possibility of making another acquisition in China and pump priming Birla Copper to global scale in the foreseeable future.

Last year, it is believed, the AV Birla group spent Rs 1,500 crore as capital expenditure for expansion and acquisitions. Kumar Birla, always loathe to discuss future plans, said, "The year that has gone by has been a watershed year for the group because in this year we have seen the last of the major restructuring initiatives that we need to undertake."

Taking on the globe is his new mantra when he says: "Today we stand at inflection point. This is the right time to catch the tide, and to catapult our group into the future. As the world becomes one market, growth is not an option, but an imperative. There is no dearth of opportunity. We have to raise the bar."

How does the group and its chairman plan to do this? While over the past five years, the compounded annul growth rate of group turnover, in India and overseas, has been 22 per cent, for the rest of the decade, he would like it to be much higher.

Today 30 per cent of the group turnover comes from overseas operations, making it a true blue transnational. How does one grow this? Ambition to move up the pecking order in acrylic fibre will entail investments in new countries. Ambition to be regional leader in aluminium will mean new investments in areas which are closer to the consumer markets for our end-products.

This way share of overseas operations will increase to 35-40 per cent of its turnover. In all this expansion, Kumar Birla is not forgetting the human resource element, a key driver in contemporary business. He said, "The group has to constantly evolve and search for a new growth paradigm by questioning our existing cerebral models and expanding our intellectual horizons." The goal is clear, he wants to break into the select Fortune 500 club.