Dear shareholders,
The foundation of our Group rests upon a philosophy of trusteeship, which imagines
corporations as institutions that drive collective prosperity. This philosophy has played
an integral role in shaping our actions for generations, guiding us in our quest to enrich
lives. Over the years, this purpose, though unstated, has been our unwavering anchor.
In FY 2022-23, we formally put in words our Group's Purpose statement. At its heart is
the commitment to enrich lives by building dynamic and responsible businesses and
institutions that inspire trust. Every day, we strive to honour this commitment
through our brands, products, services, solutions, actions, relationships, and
institutions.
Our Purpose statement stands both timeless and fresh against the backdrop of our
extensive history. In a world of increasing opportunity, and also accelerating
uncertainty, our Purpose statement is meant to act as a talisman and remain at the core of
our business decisions.
Our Purpose offers us a unique lens with which to view the world, to bring perspective
to it, and to thrive in it. Guided by this unique perspective, we navigate the evolving
global landscape with resilience and foresight. As we turn our attention to the current
state of the global economy, it is evident that we are charting a course through a
‘new normal'.
Global economy: Finding a new normal
The global economy continues to pull itself out of the pandemic-triggered shock. It
does so amid a complex environment marked by the ongoing conflict in Ukraine, geo-economic
fragmentation, soaring interest rates, and looming risks of a banking contagion.
Reflecting these concerns, the International Monetary Fund (IMF) expects global economic
growth to dip from 3.4% in CY22 to 2.8% in CY23. Developed countries are predicted to
experience a more pronounced deceleration, their aggregate growth stumbling to just 1.3%
in CY23–the slowest pace in a decade, excluding the pandemic-impacted CY20.
On the brighter side, China's economy marches towards normalisation following the
lifting of its Covid-related restrictions.
Both China and India are set to significantly contribute to global economic growth in
CY23, providing a much-needed stimulus as developed economies grapple with challenges.
Meanwhile, global supply chain pressures have largely normalised, helping ease commodity
prices and peak inflation levels in most economies. Central banks, led by the US Federal
Reserve, appear to be nearing the end of their rate-hiking phase, signaling cautious
optimism for the global economy and financial markets. However, vigilance remains crucial
in the face of potential risk events in this fragile environment.
India: The shining star
India's economic narrative paints a much brighter picture. With a government-led push
to infrastructure investments and pragmatic policies such as the production-linked
incentives scheme, private capex has seen a surge. This rise triggers a multi-year boom,
providing valuable support to economic growth in the face of softening global demand.
A decadal reshaping of supply chains is underway. As global corporations start to look
at countries across Asia as part of their China + 1 strategies, India is well positioned
to benefit. Supported by the dynamism of its tech-based ‘new economy' enterprises and
the expanding digitisation across sectors, India's growth momentum continues to
strengthen.
The Reserve Bank of India (RBI) projects India's economy to grow at 6.5% in FY24,
demonstrating the nation's resilience amidst subdued global economic conditions. Inflation
seems to have peaked globally and in India. Easing inflation, robust foreign exchange
reserves, and improving bank assets' quality provide a sizable cushion against potential
destabilising events in global markets.
A key component of the rise of any industrial ecosystem is the presence of a confident
and skilled workforce. This year, India surpassed China in population, and already has the
largest and youngest working age population globally. The lessons learnt from the
transformations of other economies through the last few decades point to the importance of
this demographic dividend.
In the grand theatre of global economic evolution, India stands not as a mere
spectator, but as a charismatic lead.
Aditya Birla Group in Perspective
As India takes centre stage in this grand narrative, the Aditya Birla Group finds
itself in a unique position to contribute to this monumental journey. Our enduring success
amidst global uncertainties stems from our unyielding commitment to purpose, anchored in
principles that are much more than just words. And therefore, the articulation of Purpose
was just the first step. We cultivated a deep understanding of our Purpose across the
depth and breadth of the Group, including the last mile. To transform Purpose from a
concept to an embodied experience, approximately 600 of our senior leaders and managers
took the initiative to receive training and facilitate introspective dialogues on Purpose.
This facilitated their teams to internalise, personalise, and actualise our Purpose in a
manner that was both unique and authentically representative of their roles within our
dynamic Group.
Driven by purpose, the fiscal year 2022-23 stands testament to the breadth and scope of
entrepreneurial ventures we have embarked upon. We are exploring uncharted territories,
backing our conviction with capital and talent. Our robust platform serves as a launch pad
for new initiatives, allowing us to tap into opportunities across traditional and sunrise
sectors. This year, we've emphasised the implementation of our 3-year HR Strategy, guided
by our Purpose Principles. This approach has enabled us to build enduring bonds with our
stakeholders, including key employee segments, like early professionals, and attract
high-quality talent across traditional and digital businesses. As we continue to expand,
our employer brand has empowered us to attract over 11,000 employees in FY 2022-23 - a
diverse pool of new skills and capabilities. Furthermore, our commitment to diversity is
evident in the increasing representation of women in our workforce.
Culture champions have been instrumental in fostering an inclusive and collaborative
environment where every employee feels heard, valued, and respected.
Amidst shifting market dynamics, Learning and Leadership Development continues to be a
key pillar, helping us equip over 35,000 employees with the skills necessary to drive
business outcomes. Over 400 senior leaders, encompassing CEOs, CXOs, and Unit heads, have
bolstered their capabilities in fields such as geopolitical analysis, interpretation of
complex megatrends, inspirational leadership, and agile leadership methodologies. Our
adaptability was made apparent in our diverse learning approaches, both in terms of design
and implementation.
Beyond the traditional classroom environment, we provided learning in various
accessible forms-including bite-sized modules, self-paced curricula, and certification
courses-thereby benefiting 87% of our management cadre employees. With two-thirds of our
workforce under 35, our attention is concentrated on equipping early career employees to
fulfill their evolving aspirations and needs. Through a unique programme titled
‘CareerAbility', these employees have engaged in a series of self-guided learning
bytes, self-assessments, psychometric evaluations, and leadership-led career guidance
sessions. This diverse range of resources has been utilised more than 40,000 times.
Our commitment to the identification and cultivation of talent has remained resolute.
We have recognised over 900 pivotal roles within our Group, for which a robust succession
pipeline is firmly in place.
An avant-garde journey of learning is presently being undertaken to equip our future
C-suite leaders, encompassing roles such as CFOs, CMOs, CIOs, and CHROs, with the skills
and insights required for leadership in a rapidly evolving business landscape. This focus
has significantly enhanced our internal versus external hiring ratio for leadership
positions.
This shift is facilitated by our integrated approach to talent identification,
development, and internal mobility. Over the past three years, we have seen 14% of our
employees and 27% of our talent pool members transition into new roles, bringing our
vision of ‘A World of Opportunities' to life and fostering enduring bonds within our
organisation. This represents our steadfast commitment to talent growth and mobility,
crucial for building a resilient and adaptive organisation.
Your Company's performance
Today, your Company proudly stands at the forefront of India's infrastructure
development, playing a vital role as a national champion and as a key growth engine of the
Aditya Birla Group.
In FY 2022-23, we recorded net revenues of USD$ 7.9 billion (Rs63,240 crores) and an
EBITDA of USD 1.4 billion (Rs11,123 crores). We achieved the distinctive milestone of
producing, dispatching, and selling 100 million tons in FY 2022-23, supported by an
effective capacity utilisation rate of 84% for the year.
Your Company has embarked on an aggressive capacity expansion path, including both
greenfield and brownfield projects, addressing high-growth geographies across the country.
I am pleased to confirm that the capacity expansion programme is progressing on schedule.
This year, we commissioned an additional 12.4 MTPA capacity of grey cement and further
inaugurated a 2.2 MTPA brownfield cement capacity at Patliputra in April 2023.
Your Company has already kickstarted work on the next growth phase of 22.6 MTPA. Civil
construction is in high gear at most sites, with commercial production from these new
capacities expected to roll out phase-wise by FY25/FY26. Upon the successful completion of
all ongoing expansion projects, your Company's capacity will soar to 160+ MTPA. This
growth will solidify our standing as the third-largest cement company globally, outside of
China, and the unrivalled leader in India.
The increase in our production capacity aligns with the strengthening of our brand
equity in the marketplace. It's gratifying to note that your Company has not only
sustained but significantly amplified its brand equity over recent years. As an integrated
building solutions provider offering a broad range of products and services, UltraTech is
well-positioned to harness the burgeoning opportunity in India. The strategic actions
taken over the past few years and the projects currently underway bear testament to our
unwavering commitment to be a strategic partner in India's development journey.
Sustainability
Sustainability is at the core of what we do. It is our stated strategy to integrate
sustainability into the value chain of our operations. During the year, your Company has
taken significant strides in each of its sustainability focus areas of decarbonisation,
energy transition, circular economy, water management and biodiversity management. Aligned
with our ongoing efforts to enhance environmental conservation and energy efficiency, your
Company added 43 MW of WHRS capacity during the year. Consequently, our total WHRS
capacity stands augmented to 210 MW covering ~16% of our present power needs.
This is expected to increase to ~300 MW by the end of FY24, after completing the
ongoing expansions. UltraTech remains focused on accelerating the transition of its
operations towards green energy. UltraTech recently showcased innovation by utilising both
sea and inland waterways to transport a bulk cargo carrier loaded with 57,000 metric
tonnes (MT) of phosphogypsum. This material, a byproduct of the industry, was safely moved
from the Paradip port in Odisha to UltraTech's jetty in the Amreli district's Kovaya in
Gujarat. It will be used in our cement manufacturing operations, demonstrating a safe and
effective method for disposing of this industry waste. This initiative, the first of its
kind in India, is groundbreaking. We are optimistic that it will inspire other cement
companies to adopt similar strategies, thereby contributing to a safe and sustainable
method of dealing with the country's phosphogypsum stockpile, a significant environmental
concern. We are encouraged by the recognition our sustainability efforts have received
both nationally and globally. Notably, UltraTech was recently ranked first in
Sustainability in the Infrastructure and Engineering sector by Sustain Labs Paris (SLP) in
partnership with BW Businessworld.
Furthermore, our commitment to addressing climate change was recognised by the global
non-profit organisation, the Carbon Disclosure Project (CDP). In their 2022 disclosure,
they awarded us an ‘A-' score, placing us in their Leadership category. This accolade
reflects our consistent application of best practices and dedicated efforts in addressing
climate-related issues.
Conclusion
I hold the conviction that our Purpose broadens our perspective, enabling us to pursue
even greater horizons. It serves as the bedrock that propels us towards the future,
emboldening us to venture into more significant commitments and pursuits.
As we grow, we expand our capacity to receive by enhancing our absorption of talent,
technology, and capital. Indeed, with each stride in growth, we deftly weave in more
threads of insights and capabilities, enriching the tapestry of our collective endeavour.
This, in turn, enables us to increase our ability to give back, create impact, and enrich
lives. This virtuous cycle is at the heart of being a successful purpose-driven
organisation.
Your Company doesn't just pride itself on being a purpose-driven entity—it
embodies it, living out this ethos in every endeavour, every relationship, and every
venture. This commitment to Purpose is what continues to steer us towards an even
brighter, more impactful future.
| Kumar Mangalam Birla |
| Chairman |