aditya birla group_part1


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Page 1: Aditya Birla Group_part1

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Page 2: Aditya Birla Group_part1

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

Page 3: Aditya Birla Group_part1

Overview: Aditya Birla Group

Page 4: Aditya Birla Group_part1

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

Page 5: Aditya Birla Group_part1

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

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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

Page 7: Aditya Birla Group_part1

Strategic Growth Framework

Page 8: Aditya Birla Group_part1

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

Page 9: Aditya Birla Group_part1

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

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•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

Page 11: Aditya Birla Group_part1

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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


Page 12: Aditya Birla Group_part1

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

Page 13: Aditya Birla Group_part1

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