New order: Kumar Birla to lead Century Textiles
MUMBAI: For a 109-year-old company, this marks a small but significant event. Come July and the next generation of Birlas is expected to dominate the proceedings at Century Textiles & Industries annual general meeting (AGM).
Kumar Mangalam Birla, 38, who was inducted on the board of Century Textiles as an additional director on February 7, is expected to chair the AGM of the Rs 2,500 crore company.
I'm hopeful that Kumar Mangalam - being better than me - will chair the AGM, Century Textiles & Industries' octogenarian chairman Basant Kumar Birla told TOI.
The cement and textile maker's shareholder meetings were chaired by Sudarshan Kumar (SK) Birla, who recently stepped down from the board along with Chandra Kant (CK) Birla, over the past two decades.
If the changes at Aditya Birla group, after Kumar Mangalam took over as chairman in 1995, are any indication, Century too could expect some changes along with a youthful touch. After all, the two groups are starkly different in style and substance.
Walk into Century Bhavan at Worli and the mist of bygone era still pervades the air. In contrast, Aditya Birla Centre, a stone's throw from Century Bhavan, reflects the gloss of modernity.
The Aditya Birla Group has an urgency to its ways, whether consolidating holdings or right-sizing companies. But Century Textiles prefers the slow process of painless voluntary retirement plans.
While most of Mumbai's textile mills have shut down owing to high costs, leaving workers jobless overnight, the Century unit at Parel is still operational at the barest minimum margin.
It will take around a decade to reduce the number of workers through VRS, a source said. Around 3,000 workers had opted for VRS and the strength is just 7,000, the source added.
The Aditya Birla group may have a larger stock of fresh blood, but Century managers have worked all their lives in the familiar confines of old Marwari tradition.
While Aditya Birla group managers put in long working hours as is seen in most modern corporates, the Century manager leaves the office premises at sharp 5 pm.
You don't need to show that you are working by staying back late. All that is required is accomplishment of work, which is taken care of, says a Century employee.
Despite the differences in culture, there is a common link between the two groups, apart from the fact that the owners are blood relatives.
Financially, both are prospering. To an outsider, Century might appear to be growing rather slowly. Look at the numbers and the perspective changes. Its turnover has grown from Rs 7.33 crore in 1951 to Rs 2,817 crore in 2004-05.
Few would recall that Century Textiles was actually acquired by Birlas, when in 1945, RD Birla, BK Birla's uncle, started acquiring shares of The Century Spinning & Manufacturing Co Ltd and became the chairman of the company in 1951.
The company was acquired from the Wadias and was one of the most talked about acquisitions in business circles of those days. Clearly, M&A skills run in the Birla blood.
Among India's first publicly listed companies, Century has a richshareholders' history. Its net worth has grown from Rs 3.13 crore in 1951 to over a thousand crore rupees now.
From a single textile mill to a diversified company, Century's business mix today flaunts cement, rayon and pulp and paper.
In BK Birla's own words: I believe that Century's fortunes rest solely on its continuing ability to evolve and successfully implement new techniques and systems, to anticipate future trends and zero in on to them, to be, in short, a company that is plugged into tomorrow.
Besides financial accomplishments, there are rare management skills enmeshed in Century's fabric. Century Textiles was the first company to overcome the infamous Datta Samant strike of 1982 within a record 18 days.
After patriarch GD Birla died in 1983, the responsibility of managing companies like Century Textiles fell on BK Birla's shoulders. Since his son late Aditya Birla was busy growing his empire, BK's brother SK Birla and nephew CK Birla came on Century's board.
It is a known fact that BK Birla is keen on bequeathing his holdings in Century Textiles to his grandson. The senior Birla is seen paving the way for his grandson to take charge of Century, which has business interests similar to those of the Aditya Birla group.
Kumar Mangalam, on the contrary, has not shown an interest in assuming a leadership role at Century as yet. He is confident that his grandfather is fit enough to lead the company forward.
Nevertheless, Kumar Mangalam has a sizeable holding in Pilani Investment & Industries Corporation which owns 36.4% equity stock of Century Textiles.
Kumar Mangalam, along with his grandfather, had in August last year bought out the holdings of SK Birla and CK Birla in Pilani. This took the combined holding of Kumar Mangalam and BK Birla to 57% in Pilani.
A year on, the young scion seems all set to chair the Century AGM. This change is being clearly marked by both insiders and outsiders. Whether Kumar Mangalam will assume his grandfather's style of management or wear his own hat, only time will tell.
Century employees, meanwhile, are well aware of the impending changes, given that this has been one of the most transparent succession plannings ever. However, comparisons would surely be made between BK's style of working and Kumar Mangalam's.
That can wait for now. What managers are still in awe of BK's style of functioning. He never loses his temper or insults a junior if a blunder is committed, an employee said. Coming from an employee - in this age of hire and fire - this line is probably BK Birla's best accolade earned so far.Source: The Economic Times