The $40-billion Aditya Birla group, with interests ranging from metals and viscose staple fibre (VSF) to cement, telecom and financial services, is looking to improve its brand visibility and presence in each industry value chain.
The Mumbai-based conglomerate has kicked off an exercise under group company Grasim to brand its fibre products — at a time when the VSF industry is reeling from a supply glut and low prices, bringing down the segment’s contributions to the group’s revenues.
“Today there is very less focus on commodities, as everything you buy is a brand,” group business director KK Maheshwari told HT. “Even fibre, which was once seen as a commodity, is moving to raise its share of value added products and solutions. You may have a good product, but in a fragmented industry with many small players it is vital you take your customers along to justify the premium.”
The Grasim branding exercise involves a partnership concept, where the partners (customers) seek to improve quality and service, while Grasim will provide technical support and back them with design development, supply chain and market development. It already has over 250 partners, Maheshwari said.
The company has put in about Rs 150 crore to build the brand. “Over the last 3 years alone our investments in pulp and fiber have been in excess of Rs 4,300 crore and our capacities close to 1 million tonnes,” he said.
An analyst with a Mumbai-based foreign brokerage said the exercise is key to increasing VSF’s contributions to Grasim’s revenue. “Complete branding of a commodity like fibre depends on the producer. The product’s qualities, how you make it available to customers and how they perceive the product are important for profitability,” said the executive, who did not wish to be identified.