Aditya Birla Group Invests $20 Billion, Aims For Top 2 Positions In Key Sectors: KM Birla

Birla emphasised that most of the group’s investments are designed with a long-term horizon, spanning 15-20 years, while investments in consumer businesses tend to have a shorter timeframe

Aditya Birla Group has invested approximately $20 billion, primarily in expanding its manufacturing capabilities, with the goal of becoming one of the top two players in each of its core sectors, a senior company executive revealed on Saturday.

Speaking at the Hindustan Times Leadership Summit, Aditya Birla Group Chairman KM Birla highlighted the group's strategic decisions, including the acquisition of Novelis by Hindalco, as part of its efforts to build scale. He further shared the group's ambitious plans to double its cement business capacity from 100 million tonnes to 200 million tonnes over the next decade.

Birla emphasised that most of the group’s investments are designed with a long-term horizon, spanning 15-20 years, while investments in consumer businesses tend to have a shorter timeframe.

"We have $20 billion of announced investments that are on the ground. Obviously, you look at it because a lot of them are in the manufacturing space. You would look at the next 15-20 years. Shorter than that doesn't make sense in that kind of business... If, on the other hand, you're looking at fashion retail or jewellery retail or financial services, then you are looking at a much shorter time frame," Birla said.

He emphasised that the group's business approach is defined by core principles such as strong values, a focus on people, achieving scale, and prioritising long-term growth.

"We want to be number one or two in every business that we are in or get into. So, like they say, scale is in everything, but it's the only thing. Without scale, I think it's very difficult to survive today unless you have something very unique, very high technology, which gives you very high margins. So, scale is very important," Birla added.

He highlighted that while the company has developed a cement capacity of 100 million tonnes over the past 36 years, it plans to increase this to 150 million tonnes in the next five years, with a target of 200 million tonnes over the next decade. Birla also mentioned that Hindalco's acquisition of Novelis for $6 billion was a strategic move to build greater scale.

"In fact, I acquired a company (Novelis) which was much larger...The stock took a beating, investors wrote us off. It took about a year to come back. Any professional CEO who had taken that decision would have been sacked because it just seemed at that time to be the wrong thing to do. I think as a promoter, I had the prerogative and the desire to see much beyond not just quarters, but years. So, running businesses for the long run is something that is a culture with us," Birla said.

When asked about aligning the group's businesses with national priorities, Birla shared that the Grasim and metals divisions were established by his great-grandfather, GD Birla, a close associate of Mahatma Gandhi. These businesses were founded with the vision of making India self-reliant and self-sustaining post-independence. However, he acknowledged that the landscape has changed significantly, and today, businesses are no longer created based solely on the nation's growth trajectory.

"I think there is an intrinsic involvement of what national priorities are. For example, when we started financial services. It was a nation coming of age financialisation. The average person was becoming more aware about his or her savings and becoming more financially literate. So, there is always, always an element of the phase of the country's growth curve that you are in (and) that will determine which business you want to get into," Birla said.

He stated that investments in sectors like infrastructure, digital technology, and consumer goods offer significant opportunities. However, the growth potential depends on one's risk appetite, as there is no shortage of opportunities in the country.