In the next decade, India will be a manufacturing capital

Updated: Nov 14 2005, 05:30am hrs
When Kumar Mangalam Birla, 38, took charge as chairman Aditya Birla Group, few gave this Johnny come lately (a phrase used by him to refer to the perception about him then) an outside chance. Ten years on, the group is a $7.6 billion conglomerate and growing, with over 30% of the revenues coming from overseas. Birla has just been named the Ernst & Young Entrepreneur of the Year 2005, and will represent India at the E&Y World Entrepreneur of the Year Award next June. He spoke to Sourav Majumdar about his vision for India Inc, the challenges he faced and what lies ahead. Excerpts:

What do you think youve achieved in the last 10 years and what remains to be done

Weve achieved a lot on the consolidation front. Weve grown the businesses weve chosen to be in. Weve pruned the portfolio. Its a much sharper portfolio now. On the people front ,weve made tremendous progress. Our brand as an employer has enhanced many times over. The challenges are those faced by any Indian company thats globalising. How do you manage a multi-ethnic workforce.How do you convey the passion long-distance. How do ensure people in the mines in Australia feel your passion as much as the people in Mumbai or Renukoot, for instance. These are issues well face as we globalise more.

What are the key changes youre making in the way you operate as you globalise.

I think the process of institutionalising systems is something that is an ongoing thing. Also, talent developmentgrooming a second and third line. Because at the end of the day, we are a peoples organisation. These are the two major areas of focus.

Kumar Mangalam BirlaWhich businesses will drive the group in the days ahead

All the businesses were in. I dont think were looking at changing the business portfolio at all. I think the growth opportunities in our existing portfolio and on the back of the work that has gone in, are tremendous. I think the portfolio will look very similar to the one which we have now.

When you came in, doubts were expressed about your ability to lead the group successfully. What are the challenges you faced then, other than the perception issue

I think the biggest challenge was that the average age of the organisation was 58, and I was 28. It was already a successful organisation. So the need to communicate the need for change, when youre already successful, was an issue. Why do we need to do things differently when these things have worked in the past And the answer to that was that the world around us had changed so much. So that was the biggest challenge for me.

At the Monte Carlo Global Entrepreneur of the Year awards, what message will you convey to the world business community

Indian entrepreneurship ranks second to none. I am not talking about myself. I am talking about entrepreneurship. Across the globe, youll find that Indians are perhaps among the mostif not the mostentrepreneurial people. The other message is that you cant ignore India for very long. We have our share of issues, but so do most other countries. But we have huge positives in our favour. We are recognised as the intellectual capital of the world and were also going to become a manufacturing capital, in the next decade for sure, for some part of the world. So its obviously a very large market, an important market that the world will sit up and notice soon.

Are you looking at setting aside a kind of war chest for more acquisitions

There is no war chest, but each company, because of its fundamental strength and strong finances, has the ability to finance its own growth. I think the war chest has to come from internal accruals and smart operations.

You, and other corporate leaders, have been saying that there are infrastructural bottlenecks to growth. Your comments.

I think the one thing that is holding back Indian industry is lack of infrastructure. If I need to spend 25% of a project cost on building infrastructure, for e.g port, roads, pipelines, in a world which is fast becoming one market, and my competitors dont need to do that, its a disadvantage which is very difficult to wish away.

Do you think the present governments accent on infrastructure will work

The fact that the Prime Minister himself is giving it the kind of attention that he is, I am sure it will get a fillip and is a very welcome development.

Youve chaired a Sebi panel on corporate governance. What do you think of the present standards of governance among India Inc

I think the quality of governance has gone up tremendously in the last five-six years in India. I think all the companies would, without exception, follow very high governance standards. I think our codes compare very well with those in the developing countries...far ahead of them actually.

What is the progress on the setting up of the Aditya Birla Nuvo

Aditya Birla Nuvo will be formed before the end of the financial year. We have to have court-appointed meetings, which is the normal process for amalgamations.