Birla plans another copper mine buyout

Birla, chairman of the Aditya Birla Group, said in Bhubaneswar on Monday that the acquisition of the Nifty copper mine in AustrKumar Mangalam alia may not completely solve the problem of having assured supply of raw material for the group's copper manufacturing facility at Dahej.

The group may have to look at another mine elsewhere in the world for acquisition.

"The present acquisition will meet only 20 per cent of our raw material needs against the captive requirement of 40 per cent."

"There will be some other acquisition later, which will help in shoring up our resources base," he said.

Meanwhile, the group expects to complete the acquisition of the Nifty mines by the third week of this month. The deal has been cleared by regulatory agencies, Birla said.

'The Nifty mines, owned by Straits Resources Ltd, are located in western Australia. As per the earlier announcement the acquisition is supposed to be done through a 100 per cent Australian subsidiary, for a total equity consideration of Australian $79.8 million.

The deal was subject approval of the Australian foreign investment review board.

Meanwhile, announcing the group's future strategy, Kumar Birla said that over past four years the group had been constantly reinventing itself.

"Now is the time for consolidation and growth to attain market leadership, economies of scale, productivity gains, and operational efficiency, all of which converge on ensuring better returns to the shareholders."

Towards this objective the group has decided to continue laying emphasis on cement, non-ferrous metals, fertiliser, fibre and financial services sectors as vehicles for growth, while relegating businesses like textiles to the non-core status to the backburner.

In cement, the group is keen on taking the leadership position with plans to double the capacity over the next five years. This will be achieved through both acquisition and setting up of greenfield projects, Birla said.

He said following de-merger of Indo Gulf with the transfer of copper business from its portfolio to Hindalco, the company has achieved excellent brand equity in chemical fertilisers.

Expressing his group's interest in the disinvestment of Hindustan Copper, he said it will bid for the PSU at a price that is realistic and will create value for the shareholders.

He said, the group proposed to have global presence in carbon black business with further expansion being planned to attain economies of scale.

On Madura Garments, he said, the group is looking at fresh restructuring to reposition its brands.

A brand like Allen Solly, for instance, will be converted into a more life-style oriented product, he observed.

Birla, however, did not appear keen to invest in telecom other than Idea, the joint venture with AT&T and Tatas.

"We are committed to our exposure in Idea and prepared to invest more if required," he said.

"But as a whole, telecom is a long-gestation business, one that has grown tremendously over the last couple of years," he added.