Aditya Birla Group Unifies Its Carbon Black Biz for Global Edge
The Economic Times
December 23, 2011
New structure will attempt to cut costs and take advantage of its worldwide leadership position
Mumbai: The Aditya Birla Group has unified its global carbon black business under one common umbrella, creating an organisational structure that will attempt to cut costs and take advantage of its worldwide leadership position in the business. A new management team with a CEO, COO and a CFO will be responsible for the business all across the world with a combined revenue of about $2 billion. The new structure will be effective from January 1, 2012. “It is a ‘distributed global centre’,” said Santrupt Misra, the CEO of the carbon black business. “It’s a structure that works seamlessly. We are trying out this for the first time in our group,” he added.
The Aditya Birla Group was among the earliest Indian groups to invest in a variety of industries all across the world. Aditya Birla, the father of the current chairman Kumar Mangalam, started a carbon black plant in Thailand in the early 1980s. Since then, the group has expanded its presence with plants in other places such as India, Egypt, China and now South America.
Atlanta-based Columbian Chemicals was acquired by the group last year for Rs 3,923 crore, helping it leapfrog Cabot Corporation of US and become the world’s biggest carbon black producer. These entities will continue to operate as separate legal entities, but will report to the top management team in India and other places.
Kevin Boyle, the existing CEO of Columbian Chemicals, will be the new chief operating officer responsible for managing the day-to-day operations. Each region will be headed by a president who will report to Boyle. Boyle will report to the CEO. Several home-grown executives were elevated to key roles in the current re-organisation. Surendra Goyal, part of the carbon black business, will be the CFO of the combined business, while Madhurima Gupta will be the new chief sourcing officer for the combined entity.
The new arrangement signals the group’s efforts to bring together a cohesive structure for its traditional businesses that are becoming bigger in terms of size and truly global in nature. The move to create a common structure arose after the acquisition of Columbian Chemicals. “There are anxieties in a large acquisition,” said Misra. A task force was formed to identify synergies and put together an effective management structure.
The carbon black businesses largely remained unorganised till the early 90s. Kumar Mangalam Birla brought the business under the direct control of group’s director Mahesh Bagrodia in 1992. Though the business acquired new global dimension with the takeover of Chinese firm Liaoning Carbon in 1992, it had remained unorganised till Misra took over as the global head in 2009. “There is lot to be derived from the coming together of Aditya Birla Group and Columbian Chemicals,” Kumar Mangalam Birla had said. The new changes are part of efforts to provide single unified interface to global clients.
“Any global corporation to be successful has to be able to operate effectively in geographies where they exist, leveraging on global culture and capability and also harness their might and assets to grow the business. For example, if you have introduced good practice in a particular geography, it can be replicated in other geographies as well. Even activities like sourcing can be looked at in a collective manner,” said Sunil Chandiramani, head, advisory business, Ernst & Young.