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Kumar Birla looks overseas

Arijit De & Baburajan K

The Aditya Birla group is drawing up a blueprint for a major overseas expansion that includes forays into East Europe, China and South Africa, among others.

The group, whose operations are spread across 17 countries, is not only looking to take some of its existing operations overseas, but will also scout for new businesses in these countries.

Senior group officials said the move was aimed at tapping the huge potential in these countries and the new opportunities that would emerge in the World Trade Organisation regime.

Chairman Kumar Mangalam Birla has already created a new portfolio on the board of the Birla Management Centre, the group's central think-tank, namely, director, international expansion.

Sanjeev Aga, the chief executive officer of Birla-Tata-AT&T who resigned last year, assumed the new position on the Birla Management Centre board with effect from Monday. Aga will, however, continue to oversee the operations at BTAL till a new CEO is appointed.

Of the group's Rs 270-billion turnover, almost 30 per cent comes from its overseas businesses, most of which is spread around Southeast Asia. It also has a presence in Egypt and Canada.

The group is among the largest in the world in viscose filament yarn and carbon black, and is India's leading player in aluminium, cement, copper, insulators, fertilisers and financial services.

In most of the existing businesses, the group was competitive in terms of manufacturing costs, which would be an advantage when it made an international foray, sources said.

While most of the international operations of the group were set up by the late Aditya Birla, Kumar Birla made his first overseas acquisition in 1998 when he bought a pulp mill in Canada.

The expansion, if implemented, will be the first major overseas thrust by Birla. Over the last six years Birla has primarily consolidated his domestic business, shelving several projects in India that were announced by his father.

In the interim, Birla reviewed his portfolio of businesses, taking the decision to get out of businesses like oil refining and steel files, while foraying into new businesses like information technology and financial services.

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