Kumar Mangalam Birla Highlights the Importance of Scale and Long-Term Vision in Business
New Delhi, November 16, 2024 — Speaking at the Hindustan Times Leadership Summit 2024, Kumar Mangalam Birla, Chairperson of the Aditya Birla Group, emphasized the critical role of scale in business and the necessity of long-term planning, trust, and strategic market entry for sustained success.
The Role of Scale in a Competitive Market
Birla highlighted that scale has become a decisive factor in today’s competitive business landscape. “Without scale, it’s very difficult for a business to survive today,” he stated, underscoring his group’s ambition to rank among the top two players in every sector it operates in.
Citing the rapid growth of UltraTech Cement, he said, “We built our cement business to 100 million tonnes in 36 years, reached 150 million tonnes in the next five years, and aim to reach 200 million tonnes in another five years.” Currently, UltraTech Cement has a consolidated capacity of 156.06 million tonnes per year.
Long-Term Perspective and Decision-Making
Birla described how a promoter’s prerogative is to take a long-term view of the business. He recalled Hindalco Industries Limited’s $6 billion acquisition of Novelis in 2007, which initially faced investor skepticism. “Any professional CEO who had taken that decision would have been sacked because it seemed like the wrong move at the time,” he said. “As a promoter, I had the privilege and desire to look beyond quarterly results and think in terms of years.”
Entry into Financial Services and Retail
Birla explained that a country’s growth phase often determines which business sectors to enter. For instance, the Aditya Birla Group ventured into financial services in 2007, recognizing India’s increasing financial literacy and savings awareness.
Similarly, the group’s entry into the paints business was strategically linked to its cement operations, leveraging a common distribution network. “Distribution is a critical success factor in a business like paints,” he said. The group launched its paints brand, Birla Opus, in February 2024. “By the end of this financial year, our capacity will match that of the second, third, fourth, and fifth players combined,” he added.
Legacy of Long-Term Business Building
Birla reflected on the family legacy of building businesses for the long term. “My father led during India’s liberalization, my grandfather built during times of scarcity, and my great-grandfather contributed during India’s freedom movement. Each generation has had a different context,” he noted.
Trust and People as Pillars of Success
He emphasized the group’s commitment to trust and relationships. “A company is not just a repository of shareholders’ wealth but also a custodian of trust — from customers, suppliers, and shareholders alike,” Birla stated.
Calling the Aditya Birla Group a “people’s organization,” Birla highlighted the importance of decentralization in managing their diverse operations. “We are highly invested in our people, their careers, and adding intrinsic value to them,” he said, concluding his remarks.
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