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ADITYA BIRLA GROUP
Overview: Aditya Birla Group
Amongst fastest growing business houses in India A successful corporate with enviable track record, both in India and
overseas It operates in 33 countries with more than 133,000 employees worldwide A caring corporate citizen with benchmarked governance practices Aggregate revenues of US$ 35 billion Group flagships enjoy leadership in key businesses
Grasim Cement and Viscose Staple Fibre
UltraTech Cement
Hindalco Metals
Indian Rayon Apparels, Insurance, IT, Carbon Black
Indo Gulf Fertilizers
Idea Telecom
Overview: Aditya Birla Group
ABG: Global Standings
UltraTech: largest producer of cement, and with the takeover of the UAE-
based Star Cement, the group now ranks 8th amongst global companies in
the cement sector.
Hindalco is the largest aluminum producer in India and among the top 10
in the world.
Grasim along with the overseas entities are the largest producers in the
world in viscose fibre category.
The No.1 producer of carbon black in the world with the acquisition of
Columbian Chemicals Company
Fourth-largest producer of insulators in the world
Fifth-largest producer of acrylic fibre in the world
Among the best energy efficient fertiliser plants
ABG: Global Presence
Group plans investments of $17bn across its 33 companies Aimed at doubling the group’s revenues to $65bn by 2015 Only 40 per cent of its total income comes from India
ABG: Building Scale Pursuing growth through both organic and inorganic means 11 acquisitions made in the last 15 years Acquisition of ETA Star has helped ABG to enter into Gulf, Bangladesh and
Pakistan. Acquisition of Columbian Chemicals will see carbon black scale up and
provide an entry into key global markets Acquired manufacturing plants in
Canada, China and Indonesia Palm plantations in Laos Mines in Australia Set up new plants in Egypt, Thailand and China.
Presence in various countries such as Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, China and Australia
FUTURE PLANS The group has plans to re-enter the power business. Intention to enter in banking
Strategic Growth Framework
ABG Companies – Strategic Investments
Acquisition of Novelis to get access to stable markets make steady cash flows leverage on better technology
Invested in bankrupt copper mines in Australia to balance out high-margin and volatile businesses like copper mines and bauxite
operations low-margin and stable businesses such as downstream copper and
downstream aluminum. Acquisition of the Atlanta-based Columbian Chemicals Company
Catapulted the Aditya Birla Group to the world's No. 1 carbon black producer
Economies of scale
Mode of Internationalization
Company Mode Year Value Country Business
Domsjö Fabriker Acquisition 2011 $340 million Sweden Pulp & Fibre business
Columbian Chemicals Acquisition 2011 $875 million US Carbon Black
Star Cement Company Acquisition 2010 $ 340 Million Dubai Cement Business
Novelis Inc Acquisition 2007 $ 6 billion Global Aluminium and Copper
St Anne Nackawic Pulp Mill Acquisition 2005 $ 100 Million Canada Pulp & Fibre business
Minacs Worldwide Inc Acquisition 2006 $125 million Canada BPO
Liaoning Birla Carbon Ltd JV 2003 - China Carbon Black
In a Nutshell: Aditya Birla Group global expansion has been driven by Acquisitions Of the past 7 International Deals between 2001-2011, 6 (out of 7) have been Acquisitions Biggest deal: Novelis Inc (2007); Acquired for US $6 Billion
Benefits
•Huge opportunity for organic growth when the domestic market is saturated
Increased Market Size
•Large investment projects may require global markets to justify the investment
•Leverage on policies related to taxes, patent protection etc
Return on investment
•Economies of scale in manufacturing, marketing, R&D and Distribution
•Higher per unit profit
Economies of Scale
•Access to raw materials, transportation, lower cost labor, key customers
Location Advantages
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Country AnalysisPolitical Analysis Taxation Policy Privatization International trade
regulations Government stability International stability
Economic Analysis Interest rates Economic growth Inflation Exchange rates
Legal Analysis Employment laws Consumer laws Competition laws Health and safety
legislation
www.themegallery.com
Country Analysis
Role of government
Facilitating growth sector wise
Easing regulations for international expansion
Providing environment for collaborative growth
Regulatory framework
Moderate regulations: Sector wise regulations
Facilitates growth as the nation is slated for growth in the future
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References
http://businesstoday.intoday.in/story/the-kumar-mangalam-birla-core-business-team/1/18950.html
http://www.adityabirla.com/media/press_reports/20071103_brand_icon.htm http://www.adityabirla.com/media/press_reports/global_play.html http://articles.timesofindia.indiatimes.com/2011-06-22/india-business/
29689373_1_aditya-birla-group-carbon-black-producer-columbian-chemicals