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Kesoram Industries may be split into two

Ishita Ayan Dutt & Kausik Datta  |  Kolkata/ Mumbai 

Basant Kumar Birla's Kesoram Industries may be split into two to accommodate his daughter Manjushree Khaitan and his grandson Kumar Mangalam Birla, in the succession plan for the company.
The senior Birla, 87, told Business Standard a part of the Rs 2,500-crore Kesoram would go to Khaitan but did not specify which part. He said the Kesoram board would decide the issue. When asked whether that meant that the company would be split, he said "it could happen" and the board would work out a solution.
Birla, however, clarified that the cement business would go to Kumar Mangalam, who is also the chairman of the Aditya Birla Group.

HOW KESORAM BUSINESSES STACK UP

Segment

Turnover PBT
Cement 1,156.32 342.55
Tyres 1,112.20 48.88
Rayon & chemicals 153.58 -4.08
Spun pipes 120.00

NA

(Figures are in Rs crore)
Observers keeping track of the Birla group said all the important businesses of the company, namely cement and tyre, would probably go to Kumar Mangalam. Kumar Mangalam is the country's largest cement maker with two "" Grasim and UltraTech. But he is not into the tyres business. They said Khaitan would get either the spun pipes (sale of nearly Rs 120 crore) or the chemicals and rayon business (nearly 153 crore).
However, the split may not take place in a hurry. Birla said he would be at the helm of affairs of his group of for the next three years, within which the company would work out the details.
The split, once it takes place, will add a new twist to BK Birla's succession plan. In his will, made in July 2004, Birla said a company of his Rs 8,000-crore group would be inherited by the person who was in charge of it and overseeing its day-to-day affairs. Under the formula, Birla's two daughters "" Manjushree Khaitan and Jayshree Mohta "" were to inherit Kesoram and Jay Shree Tea & Industries, respectively. However, in June this year, Birla had said all major in his portfolio would go to his grandson, Kumar Mangalam.
Last year, Birla had announced that Kumar Mangalam would inherit Century Textiles & Industries, after gaining control over Pilani Investments from other Birla clans, namely SK Birla and CK Birla. Pilani holds the majority stake in Century Textiles. Kumar Mangalam joined the Century board last year.
Half of Kesoram's revenues comes from cement, sales of which stood at Rs 1,156 crore in the last financial year out of the company's total turnover of Rs 2,500 crore.
The BK Birla group had also explored the possibility of merging the different cement units within the group with the Aditya Birla Group's cement firms. However, Birla said, "While I am alive there will be no merger; after I am not there, Kumar Mangalam can do what he wants."
Apart from Kesoram and Century Textiles, Kumar Mangalam will also get Century Enka and Mangalam Cement. The other companies in the BK Birla portfolio are ECE Industries and Mangalam Timber Products.

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First Published: Tue, August 14 2007. 00:00 IST
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