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January 23, 2013

Aditya Birla Group - The rise and growth

There have been many business houses in India, who started before independence but made their mark on a global level by the time India became free. After the 1950s, these companies expanded their wings in every continent, and became known as one of the multinational conglomerates that rose from the ashes of nothingness and became titans of the business realm. The revolution in information technology and telecommunication has been brought by these handful of firms that changed the way the nation experienced various things. Communication gap diminished between the people because of the mobile phone and its efficient service. The Internet introduced the exchange of electronic mails and the snail mail disappeared from the horizon.

The likes of Tata’s, Reliance and Birla gave the nation recognition on an international platform of business. This never happened before, moreover; these firms went a step ahead than just doing mere business in foreign lands. They started acquiring the domestic business establishments of the countries, where they ventured to do business. All of this consequently raised the probability of employment and the foreign currency to be accumulated in the Indian treasury. An international business house also helps in building, and maintaining the international diplomatic relations between the two countries. Philanthropy is one such sector, which is being explored and promoted by many business houses across the world. Aditya Birla Group is among those firms who take their corporate responsibility in a very serious manner. This is one of the few firms, which always believed in giving the society a portion from its own profits.

Inception of Aditya Birla Group of Companies

The foundation of Aditya Birla Group of companies was laid in the 1857 by Shiv Narayan Birla with a very wider prospective in mind.  Later on, this venture was carried forward by the next generation of the Birla family. At the moment, it has become a multinational conglomerate, with a global presence across many nations. It’s in the field of various trades at the moment such as cements, metals, chemicals, textiles, agribusiness, mining, carbon black, wind-power, telecommunications, insulators, financial services, retail, information technology, trading solutions etc. With a total number of 1,36,000 employees it generated a huge revenue of US$ 40 billion in the fiscal year of 2012. This makes it the third big company as per revenue generation, after Tata Sons and Reliance India Limited. Kumar Mangalam Birla heads this firm from its Mumbai, Maharashtra based headquarters.

Growth Saga of Aditya Birla Group of Companies

The first century of this firm didn’t see much significant activity other than the establishment of various manufacturing and trading houses. It is the period after independence of India that saw an accelerated growth of the entire firm. In 1982, the company made its way into the land of Indonesia with the setup of PT Indo Bharat Rayon. Two years later in 1984, they proceeded to increase the overall production for their detergent industry by manufacturing a larger volume of Sodium Phosphate by establishing a brand new unit called, Thai Polyphosphates and Chemicals. Few years down the line, in 1987, they took interest in the textile industry of Thailand and founded Thai Acrylic Fibre to support their textile endeavours. Later in 1989, to gain a stronghold position in the chemical market of Thailand, they went into a joint collaboration with the FMC Corporations of United States, to establish Thai Peroxide Co.

While, the company was expanding its operations in the South-East Asian countries, the Indian holdings were busy in diversifying their business in order to expand. Grasim added the Vikram Cement plant to itself in 1985, which was situated in the state of Madhya Pradesh at Jawad. In next 5 years, the production had gone threefold to the volume that was at the beginning. 1990 onwards, Grasim went on an aggressive expansion mode in the domestic front of firm. The formation of the Birla International Marketing Corporation took shape in 1992 to support the export business of the firm. A sponge iron manufacturing factory, which was gas based; Vikram Ispat was the next project of the firm in 1993. After the cement plant of Jawad, Grasim expanded its operations in the same arena by starting two fresh plants known as, Aditya Cement based in Shambhupura and Grasim Cement at Raipur, in the year 1995. Previously, the cement business was looked after by the Indian Rayon branch of the firm but since the moment Grasim excelled in the cement business, the entire operations related to the same was handed over to Grasim in full capacity.

The complete restructuring of the new age operations and company procedures was done under the proficient leadership of Kumar Mangalam Birla. He took over the reins of the firm in 1995, after his father Aditya Birla passed away. Until then, the Institutional Investor International Edition had declared the Birla Group of Companies a very murky business empire. But the young Birla, who came straight with a degree from London Business School, was determined to change everything and bring the company to a level of modern corporation. The first thing, which he did, was to bring the scattered business of the company’s holdings under one umbrella holding, the present day Aditya Birla Group. Later the umbrella holding regrouped multiple industrial operations in a much coherent structure. This helped the company to be where it is today.

Best Known CEO of Aditya Birla Group of Companies

Although there have been many prominent executives in the Aditya Birla Group of Companies but the one who turned everything around, the very moment he took over the office is Kumar Mangalam Birla.

Policies & Strategies of Aditya Birla Group of Companies to retain its employees

Aditya Birla Group of companies has a very peculiar set of policies and strategy to retain its employees. It offers a practice of total compensation to its employees for their services. The provision of career advancement with personal development, as well as training in the related aspects of industry is rendered to the employee. The work-life balance of an employee is regarded as a high priority by the company because they know that a happy employee is a stable and productive employee.

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