GD BIRLA

(1894-1983)
A Presentation on
(10th April 1894 - 11th June 1983)

GD BIRLA

Why GD Birla; Why not some new enterpreneur??

Its because the similarities in India just before and after independence and India in 21st century is far greater than b/w Indian in eighties and now..

1)Competition 2)Government 3)Technology

GD BIRLA - Life
GD was born on 10th April 1894, in a small shekhwati village of Pilani in Rajasthan. He was a school drop out. Was sent to Bombay to his elder brother to learn business when he was eleven. Became one of the most successful enterpreneurs of his time. Was Awarded Padma Vibhushan in 1957. Died in London on 11th June 1983.

The Growth of the Empire

The Birlas Worth ` 20 lakhs in 1914 By the end of First World War(1918), the figure quadrapled to ` 80 Lakhs By 1939, their assets had risen to ` 4.85 crores and they were thirteenth largest managing agency firm in India. During the thirty-year period between 1939 and 1969, Birlas Shot up from thirteenth place to second. Their assets had increased to ` 456.40 Crores.

Over the next decade they doubled this figure and in 1977 they overtook JRD to become Indias number one business house.(1065 crore as compared to 975 crore.) By the time GD died in 1983, the aggregate assets of the groups 200 odd companies had crossed ` 2500 crores and sales were over ` 3000 crores.

The Turning Point

Jugal Kishore, his elder brother in Calcutta had established a name for himself as a daring and skilful speculator in opium, silver and other commodities. At the age of 16, GD joined him. But the collapse of Indian Specie bank induced an aversion for speculation in him and he decided to become a jute broker instead.

At the age of 16, thus GD started an independent business as broker. And thus began his contact with Englishmen, who were his patrons and clients. He learnt business methods, their organising capacity and other virtues. But he also suffered their racial arrogance also which nurtured political interests in him.

Learning the tricks

Before setting the shop, he needed to learn the ropes. He went to Narsi Bhatia, a leading Marwari broker to Rallis Brothers, one of the Calcuttas largest managing agency firm,with interests in jute, railway and a host of other businesses. Realising the potential of GD in the field, Bhatia denied to teach him. Mahadev Somani, his father in law and a registered agent taught him these skills and let him used his name to buy anything. Thus formed the G.M. Birla company in 1911. ( G for GD and M for Muralidhar Somani, his brother in law).

Right Place at Right Time in Right Business

With the outbreak of WW-I in 1914 and the introduction of trench warfare in Europe, there was a huge demand of jute sandbags and speculators swung into action for anything that has to do with the jute in both ready and future markets. Most major jute shares tripled their value b/w 1915 and 1921.

The Cotton Club

During WW I, he bought a small cotton mill in partnership. He worked very hard and spent upto12 hours a day at the factory premises, inspecting each machine diligently, scrutinising entire accounting. This success provided the kind of encouragement he needed. Meanwhile he was also trying to rejuvenate a run down cotton textile mill in Delhi. So most of 1919 saw him shuttling between Calcutta and Delhi. During and after this takeover, his management acumen sharpened.

Three Principles
Once a major decision is made, it should not remain pending. The cotton mill was cheap and he needed industrial experience. He could have lost ground if he had waited for the prices to fell down. It is preferable to build a factory rather than buy one. It was easier to manage his new jute mill in Calcutta than to nurture small cotton mill in Delhi.Thats how they developed the reputation of being greenfield builders. Select Reliable people, train them in your own way and then trust them to get on with their job

The Forties and Fifties

There were too many people in Birla family to support him. While his younger brother, BM, looked after Diversification into engineering, his elder brother, RD, was engaged in expanding the groups textile mills. Lots of companies like Indian Tools, National Engineering, Orient General Industries, Hind Cycles, Baby Hindustan (cars) came up in this period. The group diversified into ball bearings, fans, nonferrous metals, rayon. Plastics, plywood, tea, banking (United Commercial Bank in 1942), insurance companies etc.

Rayon and Grasim

Artificial Fibre was untried in those days. But farsighted GD saw its future because of its toughness and low price. Thus came Grasim, in August 1947,at Nagda, a village 50 kms from Ujjain.

Project Hindalco
Under the first five year plan of Independent India, there was a project of construction of dam at Rihand. Planners found that 50 MW of power would be wasted and thus a proposal was sent to GD to create a factory there. The timing was perfect. GD was mulling over pros and cons of an entry into Aluminium. In Collaboration with Kaiser Corporation(an American metallurgical firm) Hindustan Aluminium Company Ltd was formed in 1958.

The capacity of the plant was 20000 tons per annum to which UP govt provided 55MW electricity at the cost of 1.99 paise per second for next 25 years. The project cost was about ` 14 crore and the commercial production started in 1962.

Top Thirteen pithy tenets

A mistake is blessing if you learn from it and a curse if you dont. Hard work never killed anyone. Time and tide wait for none, opportunities never come again. He alone is wise who can discriminate between the necessary and the unnecessary. Do today what you propose to do tomorrow; do now what is meant for today. Early to bed and Early to rise makes a man healthy, wealthy and wise. He who thinks he knows everything, knows but little.

Contd..
Miss no opportunity to do good to others. Real pleasure lies in giving not taking. Life is like a sea of milk. The more you churn it, the more butter you get from it. Forget the past, take care of the future. Transcend your ego and let your speech be pleasant. To err is human, to forgive is divine.

To sum up:
1)He had clearly defined principles as already stated. 2)He was a very hard working, meticulous man. 3)He was a prompt decision maker. 4) His far sightedness and correct prediction of market was absolutely remarkable. 5)His refusal to think in traditional way helped the group many times to earn huge dividends. 6)Not losing the grounds even in critical conditions. 7)Great leadership skill and full belief in team. 8) Moderate Risk Taker: Dealt with middle ground products. Extremely Cautious and Calculated Risks.

A philanthropist
He and his family built temples, hospitals, schools and colleges all over the country that count among the landmark in many cities. Built a hospital in Bombay that remains one of the best in the city, provides advanced treatment and remarkably still, 80% of its beds are free.

Established BITS, Pilani as one of the Indias finest complexes in higher education with the help of MIT, USA. As President of Harijan Sevak Sangh, he fought for the rights of untouchables

Thank You..