The alchemist: Mangalam Birla
Kumar Birla has forged his career at the crucible of wrath from the stock markets, writes Sabarinath M.india Updated: Feb 17, 2007 02:15 IST
Kumar Mangalam Birla’s face was drawn and lined as he appeared at the Rooftop Rendezvous, the convention centre of the Taj Mahal Hotel in Mumbai. It was 5 pm on Sunday, February 11. The 39-year old chairman of the Aditya Birla group was about to announce a $6 billion (Rs 30,000 crore) acquisition of North American metals’ major, Novelis. It wasn’t just that he had been working over the weekend; the man had been working non-stop over the weekend. He had left his office at 2 am Sunday morning and since then, had been busy firming up the details of one of the biggest deals in the history of Indian industry.
Hard work, though, has hardly ever fazed Birla. He is not new to it. With his punishing schedule, he has always brought to the table a rare composure and an unwavering sense of purpose. His voice, when he spoke that afternoon, was without a trace of fatigue: “The acquisition of Novelis is a compelling transaction for the group. It brings enormous long-term benefits.”
Long-term is what he is interested in. Nothing else is good enough. The day after the deal, the share price of the group’s metal company, Hindalco, nose-dived in the stock markets. Where was Birla? Attending a function to launch the biography of his grandfather in Mumbai’s Ravindra Natya Mandir.
Birla is not new to turbulence. He forged his career at the crucible of wrath from the stock markets and severe criticism from the media. Eleven years back, on the death of his father, Aditya Vikram Birla, he was thrust into the role of running an industrial empire that spanned several continents. Even today, and especially during the tricky moments, it does him good to not forget that.
“I remember those days. He was struggling. You cannot ruffle him. He is not bothered about the short-term volatilities,” said former country head of investment banking firm, DSP Merrill Lynch, Amit Chandra, who has executed Birla’s restructuring strategies for almost a decade.
So what did a 28-year-old (admittedly one with a degree in management from the prestigious London School of Economics) do when thrown in at the deep end? He transformed a group built on hierarchical values from a Rs 8,000-crore fat conglomerate to a leaner one with a turnover of Rs 50,000-crore. “My vision is to create a premium global conglomerate with a clear focus on each business,” Birla says now.
Given the latest acquisition, it seems as though he knows exactly how to go about it.
The group’s operations are now spread across 18 countries in four continents. Overseas operations account for 35 per cent of the turnover. Its 72 manufacturing units and sectoral services span India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China. The group now runs the world’s largest viscose staple fibre company and is the eighth largest producer of cement in the world. After acquiring Novelis, the group is in the Fortune 500 club.
But Birla is not resting on his laurels. He is alert to change, and alive to the urgency with which one needs to run a global conglomerate in the days of a booming Indian economy and unprecedented change in the business environment across the world. After deciding to exit the telecom business, the group has decided to reverse the decision last year and acquired the stake of its partner, Tata, from the joint venture, Idea Cellular. Sensing a major market opportunity, Birla decided to take Idea public with a Rs 2,125-crore public issue.
And his faith in new-age businesses is growing. He is structuring the group on the lines of US major GE, whose dynamic former CEO, Jack Welch, remains his all-time favourite management guru. Three months back, the group announced its foray into the fledgling retail business and took over Bangalore-based Trinethra Super Retail.
At the core of his rapidly expanding empire are the people Birla picks (like Sumant Sinha, the son of former finance minister Yashwant Sinha, who joined as CFO six years back) and the trust he reposes in them. “He has great faith in people. He gives people enough time to settle down,” says Santrupt Misra, the HR director of the group. Misra, who came over from HLL in 1996, was among the first batch of professionals that Birla recruited to change the culture of the group.
“My mandate was clear. Improve people and processes and create a world class company,” says Misra. European consultant Hay Group drafted the HR policies, leading to the blossoming of a performance culture. Performers were given promotions. For instance, MR Prasanna, who joined the group from L&T as legal head in 2000, is now group executive president. “I want to give opportunities to people,” Birla says.
Born on June 14, 1967, Kumar Mangalam Birla was raised in Kolkata and Mumbai. Kolkata remains his favourite city, but Mumbai gave him exciting opportunities. On his graduation from Mumbai’s Sydenham College, Birla went to LSE and also completed a course in chartered accountancy. He married young, at 22, and his wife, Neerja accompanied him when he went to study abroad. His mother Rajashree Birla, who is also a director in many group companies, was a huge influence. The family remains at the centre of Birla’s world.
“He remains a simple person. And he is very attached to the family,” says industrialist Mukul Kasliwal, Birla’s brother-in-law. His friends are mostly outside the business circle. “Birla spends time with childhood friends like Sanjeev Goenka, who is married to his relative,” said a member of the Birla family.
A man of simple habits, he is a teetotaller and vegetarian, bringing chappatis for lunch from his Altamount Road home. Most weekends, he’s with his kids, Ananyashree (13), Aryaman Vikram (10) and infant Advaitesha, at malls or in the cinema.
All the while, he retains his commitment, his focus and his composure: they are the things that have, from such an early age, helped him turn around a company in a manner few would have thought so when he started out as a 28-year-old.