Indian billionaire Kumar Mangalam Birla, who oversees the $46 billion Aditya Birla Group spread across 36 countries, is not any longer keen to accumulate any firm with a globally diversified supply chain as protectionism and therefore the pandemic increasingly curb the movement of products and other people .
“We wouldn’t check out a corporation or a business where you source in one corner of the planet and sell in another corner of the planet ,” Birla told Haslinda Amin in an interview during the Qatar Economic Forum. “That’s a reset that went on on account of growing protectionism.”
Acquisitive conglomerates like the one Birla helms — he has acquired quite 40 companies within the last 25 years — are now pivoting toward creating regional strongholds which will avoid getting tripped up in an increasingly divided world. Even cross-border M&A must have a “strong element of regionalization,” consistent with Birla, during this new world.
China’s rapid economic rise within the past few years and therefore the coronavirus pandemic more recently have exposed the vulnerabilities of worldwide supply chains. This, in turn, has spurred almost every nation, be it the U.S., European Union or Australia, to show inward, protect domestic enterprises and pursue self-reliance — a macroeconomic policy shift that has complicated growth plans for multinational corporations.
Different countries are following different policies to make homegrown champions, consistent with Birla, who added that even globalization must have “a very sharp dimension of regionalization thereto .”
“We’re watching regionalism as a really big theme,” he said. “Regional hubs, regional presence, regional employment, catering to regional demand. i might say we’re a worldwide company but rooted in local economics.”
