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Hindalco chalks out plan to meet New Millennium challenges

Rakesh Kumar Dubey in Calcutta

Aiming to be a premium conglomerate with clear business focus at each corporate level, the Rs 20.13 billion A V Birla flagship Hindalco Industries Limited has chalked out a three- pronged strategy to face the liberalised economic environment in the next millennium.

Chairman Kumarmangalam Birla in an address to shareholders and employees said, "We recognise that for sustained growth and maintaining excellence, different strategies may be required, more so with India being a member state of the World Trade Organisation.

"We have taken a number of measures which are broadly categories into three dimensions, namely, strategic thrust, structural initiatives and systems adoption," he said.

"A more liberal economic environment has dramatically altered the scenario as the forces of liberalisation and consequent competition will only accelerate in future," he said, adding it will also mean that there will be a shift of focus from suppliers to consumers.

"As we are not insulated from such forces of change, we are embracing fundamental changes within the group to prepare ourselves for the coming millennium. We are adopting an ethos that focuses on value-added growth and not just growth for the sake of asset growth," he said.

Birla informed that as part of such strategy, our intent is to move out of businesses that do not create value, restructure existing businesses for enhanced focus so as to realise better synergies, and build businesses with value creation potential.

Towards this end, the company has temporarily shut down the seawater magnesia plant and has closed one of the caustic soda plants, he said.

Birla further announced: "We will not, in future, diversify into unrelated areas in our companies. Each company will focus on its core businesses and if growth opportunities are not found in such businesses, we will use cash generated from it in a manner that increases shareholder value."

In addition to not having any unrelated diversification in future, the company would also not invest in companies that did not further the core businesses of the investor company, he said.

To this extent, the management was actively exploring possibilities to unwind investments already made by operating companies in unrelated ventures, Birla said.

In order to meet the expectations of shareholders, the company proposed to align the energies of the group by focusing on re-energising the organisation and internalising the concept of value creation, he added.

"We feel that a large organisation like us need to be 'nimble-footed' to compete in the market place and for this we are aggressively pushing programmes to attract and retain fresh talent and nurture existing intellectual capital across the organisation," Birla said.

UNI

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