CREATING VALUE & INNOVATION

The Aditya Birla Group, a multinational conglomerate with a diverse range of businesses including metals, carbon black, chemicals, cement, fertilizers, fibers and textiles, retail, telecom and financial services all around the world. As a whole, they propose a multi ethnic and multi-dimensional structure operating in more than 35 countries and across six continents with strength of more than hundred and thirty-six thousand committed people representing more than 40 nationalities. The group was founded in 1857 by Shiv Narayan Birla. The base values of this group include integrity, seamlessness, commitment, speed and passion (Tata, 2016). In today’s dynamic environment, the audacious goal of Aditya Birla Group is to become a sixty-five-billion-dollar corporation till year 2050.

Surviving and maintaining a leading position in all the business at the same time is a very difficult job to do. But the Aditya Birla Group have maintained their position at the top in every business they have diversified themselves to. The main aim of this group is to have a clear focus in each of their businesses. They are a leading producer and supplier in many of their business around the world. The group’s flagship company Hindalco supplies more than 50% of India’s requirement of copper and is currently the largest rolled aluminum producer in the world (Tata, 2016). The group is also the largest supplier of beverage cans.

Through innovation in their process, they are saving a lot of essential resources by recycling around 40 billion cans (Tata, 2016). In the era of growing infrastructure in the developing countries, the group Ultra Tech company is the largest single manufacturer of cement in India. The group possesses carbon black plants across mainland Asia, America, Europe and in Alexandria which supplies carbon plants to the world’s leading tire manufacturers and is among the world largest producer and supplier in the world. As the new grades of carbon black is adding up, the main focus is on innovation and research. When it comes to societal contributions, Aditya Birla group is actively participating in corporate social responsibility. Like Recently, Aditya Birla group has donated 500 crore rupees to the PM cares fund to fight the pandemic covid-19.

The Aditya Birla Group believes that Innovation and research will be main deciding and differentiating factor for them in the future. And they are primarily focusing on innovation in culture and capabilities with innovation in infrastructure, over 300 scientists and specialists are currently working in their corporate research and development organization known as The Aditya Birla Science and technology. The main aim is to build the leadership position with the latest technology in hand. The chemicals manufactured by the group possess a very wide range; from food processing to textiles and are exported to over 50 countries. With the increasing automation, the group is continuously evolving each of their businesses using artificial intelligence, big data and machine learning technologies. To top it off, Aditya Birla Group started Bizlabs, through which the group collaborates with the innovative start-ups. This kind of collaboration between the Group and the start-up is a win–win association.

Although all the companies around the world are focusing on innovation because of the dynamic environment. But how innovation is measured? It is measured with the various parameters having innovative outputs, for example, number of development projects, increase in revenue from new products or the frequency of the new product launches. Also, companies across the globe are now prioritizing Research and development facilities and are spending more and more to gain innovative advantage over its competitors and gain large market share through latest technology in their products. Research and development costs are strategic level costs as it forms a connection between various departments of a company, say cost reduction and marketing department.

The Aditya Birla science and technology company (ABSTC) is the main hub of R&D facilities for the entire group including Novelis, tech industries in America and Sweden and Thai chemical industry. In 2012, the group took an initiate to raise its research and development expenditure by 1 percent of its turnover. This initiative was backed by the CEO and CTO of ABSTC, Luna Fontana said that more than 200 scientists and specialists of the group are working to develop their own technologies, innovative products and processes for the future rather than just relying on licensing agreements (Tata, 2016).

Since then, the Aditya Birla Group (ABG) is constantly increasing the Research and development expenditure. The cornerstone of ABG is creating values not just by the top management but at every level of the organization. ABG is now emphasizing in creating and setting stones to promote social value by providing innovative and ecofriendly techniques in producing their products. These techniques include using hazardous wastes to produce energy (Ultra tech Cement), promoting sustainability by using closed curl manufacturing (Novelis), ensuring the use of stronger, lighter and durable vehicles (Novelis) (Tata, 2016). And in addition, ABG is producing innovative solution of reusing, recycling plastic as well as low sustainable packaging materials. In manufacturing sectors, ABG tend to create small seamless innovation which therefore provides the upgradation to the entire process and help them to raise the bar.

The graph represents the turnover and profit of Aditya Birla Group. As it is a conglomerate, so each of its businesses are separately listed. This graph represents ABG chemicals and it is taken because expenditure on innovation and development is majorly carried in this sector. Although it is not the latest graph but since 2012, ABG started increasing the research and development expenditure. The effect of this increase is clearly depicted in the graph, the profits in 2009, 2010, 2011 were merely constant, but from 2012 the turnover and profits are continuously rising till date and R&D expenditure have shown the positive impact.

The table represents and shows an upward trend in the earnings of Hindalco, copper and aluminum producer of ABG. In the metallic sector, ABG is constantly evolving and innovating to create both customer and social value. The practice of recycling beverage cans started in 2016 is benefitting not just the company but the overall society. The earning of ABG is showing an upward trend from a decade in almost every business, it is a part of. And to top it off, ABG have decided to increase the number of specialists and scientists in their main R&D hub, Aditya Birla Science and Technology to develop more innovative solutions in the coming stretch of five years looking at the growth potential in the developing economy to diversify itself in new and unexplored sectors like Information Technology and Heath care.

The Aditya Birla Group have always emphasized on enhancing their values not only to their customers but to all stakeholders including the society (Tata, 2016). The group is constantly working on innovative solution to all their manufacturing process. No matter if it is Chemicals, Copper, Cement, Aluminum or any other business activity, the group have always raised the bar in terms of innovation. Research, development and innovations are the main deciding factors of the future for the Aditya Birla Group. According to some top-level officials, the group not only innovate the manufacturing processes but the entire business model. India being a developing country, there are tremendous amount of innovations and as a group, they tend to identify and rectify the problem due to a which a consumer base is not utilized. Aditya Birla Group works on principles as its tagline specifies “Big in Your Life”, which in simple terms means Innovation and developments.

“What is now in action was only imagined once!” – Kumar Mangalam Birla