Aditya Birla Group chairman Kumar Mangalam Birla said on Thursday that the conglomerate’s paints venture, Birla Opus, is “its biggest grounds-up consumer business” with an investment of Rs 10,000 crore and is set to disrupt the industry.
The group’s diversification into a new segment comes after a decade, though it is a natural extension of its cement business – the conglomerate’s biggest revenue generator. “There is no right time to get into a new business,” said Birla (56), reasoning that “we were busy with a handful of existing businesses.”
Birla is building grounds-up six plants across the country with 1,332 million litres capacity, which will be “greater than the combined current capacity of the second, third and fourth players in the industry”. This will be “40% of the total existing industry capacity built over the last several decades”, said the chairman.
He said, “No paint company globally has ever launched in one shot – factories, operations, products and services – at the scale that we are about to undertake.” Birla planned to foray into paints during the pandemic. He said the venture “combines the dynamism and frugality of a start-up with the muscle and brand strength of a storied conglomerate”.
The group aims the paints business to have a revenue of Rs 10,000 crore and to be profitable within three years of operations. Birla Opus (Opus is derived from the Latin phrase, magnum opus) will hit the market (select states) next month and will cover the entire country by FY25.
By the time the paints business achieves the Rs 10,000 crore revenue, “we will also be the number two player”, said Birla, while commissioning three plants in Panipat, Haryana; Ludhiana, Punjab; and Cheyyar, Tamil Nadu (the last two facilities were commissioned virtually).
The launch event at Panipat was attended by paint dealers, contractors and business associates from across the country. Asian Paints is the number 1 player in the Rs 80,000-crore decorative paints industry. Taking a dig at a competitor, Aditya Birla Group director Himanshu Kapania said: “Some of our people were terrorised not to come to the event.” Birla said “We believe that there is enough and more space for a large player like us. And nobody should be anxious.”
The group’s move indicates that like Reliance Industries and the Tata Group, it is ramping up its consumer portfolio. “World over, corporates are moving to consumer-focused businesses and the group, too, is getting down the value chain in the commodity business,” said Birla.
