Kumar Mangalam Birla was just 28 when his father, Aditya Vikram Birla, died in 1995, and he had to shoulder the responsibilities of his father’s business empire that he inherited.

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However, the responsibilities he had to take at that early age proved to be the turning point in his life.

“It left me with no choice but to grow up fast,” India Today had quoted Kumar Mangalam as saying once. “It was a huge learning by itself,” he said.

On June 14, as he turns 55, here’s a look at some of the challenges that Birla is confronting in his cement and other businesses.

Birla is chairman of the $45 billion conglomerate Aditya Birla Group, which owns about a third of India's biggest cement maker Grasim Industries. The group also owns stakes in aluminium company Hindalco Industries and financial services provider Aditya Birla Capital. Apart from this, the group has investments in iron ore miner Essel.

According to the Forbes Annual Billionaires ranking, Kumar Mangalam Birla’s net worth is $13.2 billion.

Challenges before the business tycoon

Kumar Birla inherited the commodities conglomerate that his great-grandfather, the revered GD Birla, globalised by expanding to Indonesia, Thailand and the Philippines. Kumar Birla built on it and became the world’s largest aluminium-rolling company after he acquired US-Canadian company Novelis Inc in 2007.

However, since 2008, Birla has waded his way through a number of challenges, including the financial crisis, a plunge in China’s commodities demand and disruption in the telecom industry after the arrival of Mukesh Ambani’s Reliance Jio in 2016.

Telecom industry

In the telecom industry, Birla’s Vodafone Idea Ltd received a government package that has prevented the telecom firm from going belly up.

In January this year, struggling telecom operator Vodafone Idea decided to convert the interest on the spectrum and adjusted gross revenue (AGR) dues to the government into equity. The move is in line with the telecom package approved by the government last year. As a result of the conversion, the government, with a 35.8 percent stake, became the highest stakeholder in the country’s third-largest telecom company.

The move helped Vodafone Idea significantly reduce its payment burden and address near-term liquidity concerns. It also eased some concern over the debt burden, although the issue still remains.

Cement challenge

A new battle has begun in the cement turf after billionaire Gautam Adani recently muscled his way into the sector after acquiring stakes in Swiss giant Holcim's business in India, including Ambuja Cements and ACC. In India, Holcim has a combined production capacity of nearly 70mt.

Following the Adani deal, Birla-controlled UltraTech Cement announced a capital expenditure of $1.7 billion in a bid to increase the company’s cement capacity by 22.6 million tonnes per annum.

Also Read: Aditya Birla Group chairman says Holcim price was too high; looks to corner paints market

Fashion industry

Eyeing a robust long-term growth in the apparel industry, Kumar Birla’s Aditya Birla Fashion and Retail (ABFRL) recently raised Rs 2,198 crore from Singapore’s sovereign wealth fund GIC through a stake sale. GIC now owns 7.5 percent stake in the company. The Aditya Birla Fashion and Retail houses a large number of Indian and international brands such as Ralph Lauren, Forever 21 and Sabyasachi.

The retailer will use the funds to push growth in the current businesses and other emerging business models.

New businesses

Kumar Birla is currently exploring opportunities in new energy to fintech businesses, even as the group plans to spend $10 billion on existing verticals, BQ Prime reported.

“We're also looking at some new businesses, digital being an important one,” Birla said.

The plan comes on the heels of Russia’s invasion of Ukraine that triggered record commodity inflation, the worst-ever energy crisis and a supply-chain logjam.

Also Read: Kumar Mangalam Birla reflects on year gone by, looks at road ahead

First Published:Jun 14, 2022 7:13 AM IST