Basant Kumar Birla says that he wants to stop managing the several companies that are part of the B.K. Birla group of companies in three years, when he turns 90, but adds that his grandson Kumar Mangalam Birla, chairman of the Aditya Birla Group is insisting that he continue running the Rs8,000 crore group as long as he can.
“I would like stop working at the age of 90,” Birla, who is now 87, said on the sidelines of the 88th annual general meeting of Kesoram Industries Ltd, the company that he will be bequeathing to his grandson, as announced on Wednesday. “As you know we are involved with a lot of art and cultural activities and I would prefer to devote some time to them,” he explained.
On Wednesday, Birla said that the ownership of Kesoram Industries (sales of around Rs2,500 crore) and a few other companies would be transferred to Kumar Mangalam Birla. This marked a change in an earlier succession plan dated 2001, in which B.K. Birla had decided that Jay Shree Tea and Industries Ltd would go to his elder daughter Jayashree Mohta and Kesoram to his younger daughter Manjushree Khaitan.
Responding to a shareholder’s query at the annual general meeting, B.K. Birla clarified that Khaitan would continue to be associated with Kesoram alongside Kumar Mangalam. The revised succession plan will see Kumar Mangalam Birla take charge of Kesoram, Century Textiles & Industries Ltd and Century Enka Ltd. Mohta will get Jay Shree Tea. Manjushree Khaitan’s daughter Vidula Jalan is on the board of another group company Mangalam Timber Product Ltd. It is not yet clear who will inherit this company and two other group companies, Mangalam Cement Ltd and ECE Industries Ltd.
Kesoram derives half its revenue from the cements business in which the Aditya Birla Group is a significant player. Kesoram, which commissioned its third cement unit in Karnataka in March, is adding a fourth in the state at a cost of Rs550 crore.
It has also expanded its other plant in Andhra Pradesh. Once the fourth unit in Karanataka goes on-stream in 2009, Kesoram will have a combined cement capacity of 6.2 million tonnes a year.
Kesoram is also investing Rs700 crore in a green-field truck tyre project in Uttarakhand, which will make 1.4 lakh tyres a month. Kesoram shares, which climbed 7.4% on Thursday following B.K. Birla’s announcement that the company would go to Kumar Mangalam Birla, rose another 4.1% on Friday, to close at Rs 453.35.