The Hindu : Business : B. K. Birla’s succession plan

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Friday, Jun 27, 2008
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B. K. Birla’s succession plan

Special Correspondent

Kumar Mangalam Birla, Manjushree Khaitan to run Kesoram jointly

To expand cement unit capacity in Karnataka
‘Increase efficiency to combat inflation’

KOLKATA: Basant Kumar Birla, the seniormost member of the Birla family after K. K. Birla, said that Kumar Mangalam Birla and Manjushree Khaitan will run Kesoram Industries after him. “It is for them to decide how they will do things after me,” he said. The 88-year-old Mr. Birla, known in close circles as ‘BK Babu’, plans to retire by 90.

Talking to reporters after the company’s annual general meeting here on Thursday, he ruled out any split in the company saying that “this would not be in shareholder interest”. The Rs. 3,440-crore turnover Kesoram has six businesses — cement, tyre, rayon, heavy chemicals and spun pipes. To questions whether Kumar Manglam Birla will be brought on board, Mr. Birla said he was already on the board of group companies such as Century Enka and it might be difficult for him to come here for board meetings of Kesoram. Recalling his conversations with his grandson fondly, the industry doyen said: “Kumar tells me that while I am here he need not step in — he tells me that I will live to be 100”. Manjushree Khaitan, Mr. Birla’s daughter, is already on the Kesoram Board. On any plans of hiving off some of the business units like spun pipes which are not doing too well, Mr. Birla said: “as long as we make money I will not close down units or throw out of employment people who have been with me since I started out 40 years ago”. On the sale of idle land at these units, he said land would not be sold in haste.

On the controls being imposed to check inflation in segments such as steel and cement, Mr. Birla said that while nothing much could be done about inflation, which is at an “unexpectedly high level”, controls and interventions by the government would have to be accepted. The way to combat such situations was by increasing your own efficiency, he said.

Kesoram director and company secretary, S. K. Parikh, said that Rs. 550 crore would be invested to expand the capacity of the cement unit in Karnataka from 41 lakh tonnes to 57.5 lakh tonnes by December. Another Rs. 1,600 crore was being invested to increase tyre capacity to over 700 tonnes daily from 252 tonnes now. These were being done through brownfield expansion at the Orissa unit and through a greenfield project in Uttarakhand. The money for these projects would come from banks and internal accruals of Rs. 600 crore.

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