Grasim plans ₹2k cr bet on B2B e-com in building materials
PremiumThe platform will focus on MSMEs in the building materials segment with the potential to extend to other categories
Aditya Birla Group’s flagship company Grasim Industries Ltd on Tuesday said its board had approved a plan to enter the B2B e-commerce platform for the building materials segment with an investment of around ₹2,000 crore over the next five years.
This investment “adds a new high-growth engine with clear adjacencies within Grasim’s standalone businesses as also that of its subsidiaries and associate companies", the statement said.
“The foray into B2B e-commerce is yet another strategic portfolio choice as it crystallizes our intent to invest in the new-age, high-growth digital space. The building materials segment presents a huge scalable business opportunity, with a proven path to profitability. With this foray, Grasim would be able to leverage the large B2B ecosystem within the Aditya Birla Group," said Kumar Mangalam Birla, chairman of Aditya Birla Group.
The platform will primarily focus on micro, small and medium enterprises (MSMEs) in the building materials segment, with the potential to further extend to other relevant categories.
The key value proposition would be an integrated procurement solution, including on-time delivery and a superior product range at competitive pricing, the company said.
“The overall building materials procurement segment in India has grown at a compound annual growth rate of approximately 14% over the last three years. This industry is estimated at approximately $100 billion with current digital penetration of just 2%.
“Grasim’s digital platform will address various challenges within the existing supply chain," the company said.
This platform will be operated by a newly recruited leadership team from the digital ecosystem. The company believes that B2B e-commerce is a high-growth opportunity, with attractive long-term returns and will be highly value-accretive to its stakeholders.
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Shares of Grasim Industries rose 0.89% to ₹1,442 on BSE on Tuesday. The announcement was made after market hours.
In May, Grasim announced the doubling of its capex plans for its paints foray to ₹10,000 crore. Last month, UltraTech Cement Ltd, the country’s largest cement maker, said it would spend ₹12,866 crore on adding 22.6 million tonnes per annum (mtpa) capacity.
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