We’re about value selling, not product selling: Vedant Birla

With deep roots in the industrial and social history of India, the Birla family started building its empire more than 150 years ago. Since then, seven generations of Birlas have helped the Group maintain its heritage and transform multiple industries in line with its mission to ‘move ahead, stay ahead’. Today, the conglomerate stands tall with a turnover of INR30 billion, nine listed entities and a portfolio covering 20 industries such as automotive, engineering, manufacturing, education and IT.

Building success

The Group’s flagship company, Birla Precision Technologies (BPT) was established in 1986 as Birla Kennametal, a joint venture between the Group and Kennametal Inc (USA). The large-scale engineering enterprise has four plants across India and is a primary vendor of Kennametal throughout the US, Germany and Asia–Pacific. The company manufactures steel pipes, machine and cutting tools, iron castings, tool holders, multipurpose engines, valves and precision components of the highest quality. BPT leverages these core competencies in machining and forward integration, catering to global giants such as Cummins, Honeywell and HUSCO International, while exporting to other major customers in the US, Europe and China.

At the helm of this ship is Chairman and Managing Director Vedant Birla, son of business tycoon Yash Birla. In 2013 – at just 22 years old – Vedant made a humble debut in his father’s group with the launch of Open Minds, a primary school in Hyderabad under the Birla Edutech banner. Prior to this, he gained experience in public relations, property development and investment broking before sitting down with his father to discuss his role in the family empire’s future.

"Although I’m not an engineer, I’ve always been interested in the automotive and engineering sectors. The same goes for my father, grandfather and great-grandfather: we all came from a finance background but ended up leaning towards an engineering-dominated business – perhaps due to the high potential and long-term strength of the sector, particularly in India," explains Vedant.

"The way I manage BPT is derived from my family values. I was taught to treat the business as if you are its custodian, and treat every shareholder as if they owned the business. The aim is to build a robust, longstanding company that will exist even after you’re not there to run it."

"Build a strong, long-standing company that will exist even after you’re not there to run it."

Vedant says BPT’s strong and extensive history has been crucial to its continued success in both domestic and international markets. "We started manufacturing out of India in 1934. Since then, we have developed a strong supply chain and gained experience in how the market has changed – constantly working on our products to factor in those changes," he says. "We’re about value selling, not product selling. Any customers that require high technology and innovation come to us because we have the capacity to customise products and solutions according to their requirements."

Preparing for the change

Like its industry peers, BPT is bracing for the impact of electric vehicles. "There is a strong push towards electric vehicles in the Indian automotive market. Although this is a good change, it means that many of the components we make now will be rendered obsolete once electric engines come into the picture. We can’t foresee whether it will take five, 10 or even 20 years for the entire market to make that transition. This creates a lot of uncertainty for us around which direction we should be taking the company and where we should be investing our money and resources."

"There is a strong push towards electric vehicles in the Indian automotive market."

In preparing for the change, Vedant has refocused his team to look at what other car components – besides the engine – BPT has the capacity to build. "We are diversifying our offering in the automotive segment by venturing into hydraulic components and supplying to the defence sector. We are made up of five divisions, with four factories and 11 branch offices across India, but my focus for the next year will be on growing our strongest division, which is tooling. Our brand is best known for our drilling solutions, and we made the decision to invest in our quality and consistency. We expanded our capacity in tooling by 15–20%, which will be fully operational by the end of this month," he explains.

"Over the next three years, we are also planning to make significant investments in our auto components division. The automotive boom in India has already caused a strong demand for parts, so we are working hard to get ahead of this and expand our capacity."