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Indian global giants take to steel and scotch
IT would seem an inevitable process.
As Asian economies take off, the continent becomes a breeding
place for corporations that make their mark throughout the world.
In an earlier era, Japan had spawned household brand names such as
Sony, Sanyo, Toyota and Honda.
Indeed Toyota is poised to take over from General Motors – it once
used to be said what’s good for GM is good for America – as the
world’s biggest car maker.
Since then, there have been some South Korean and Taiwan brands
that made their mark, notably Samsung and Hyundai for the former
and Acer for the latter.
But before long, the Japanese and South Korean motor vehicles are
going to be challenged by newcomers from India and China, which
recently became the world’s biggest market for new car sales.
Because of its experience as part of the world’s free market
economies despite the stifling socialist tendencies of early
Indian governments, India has become a remarkable force in global
corporate markets.
Big in steel and scotch
The world’s biggest steel maker is a
conglomerate owned by an Indian entrepreneur – Lakshmi Mittall –
whose Mittal Steel has operations in 16 countries spanning four
continents with 224,000 employees.
Another Indian entrepreneur was recently described by the South
Asian correspondent for The Australian newspaper, Bruce Loudon, as
“India Inc’s most flamboyant character, a one-time playboy whose
lifestyle is light years away from the crippling impoverishment of
the vast majority of his
1.3 billion fellow Indians”.
The effusive description was for 52-year-old Vijay Mallya
following his K3.8 billion acquisition of Glasgow-based White &
Mackay, which The Australian described as “one of the world’s most
venerable whisky makers”.
Loudon says Mallya’s purchase of the world’s fourth largest scotch
maker is the latest in a string of acquisitions by India Inc
corporations that has exceeded A$30 billion (K76 billion) in the
past year, more than four times the figure for the previous year.
The appetite of companies like Mittal and Mallya’s Banglore-based
UB Group is based on the premise that by exercising various
synergies, they could create super-efficient corporations that
compete globally.
Ironically, in many eyes India continues to be near the top of the
ladder when it comes to government red tape that the new breed of
entrepreneurs need to unravel in their quest for global status.
The unique Tata Group
Possibly the most famous Indian brand
name belongs to another family altogether, the Tata, who since the
mid-19th century, have built a conglomerate that has 96 companies
in various sectors of the economy – from steel, chemical and
fertiliser manufacture to production of motor vehicles
to information technology and consulting services.
As India’s biggest privately owned company Tata’s annual revenue
amounts to about US$22 billion (K66 billion) and accounts for 2.8%
of India’s gross domestic product.
The company recently caught the attention of global motorcar
makers with an announcement that it expects to begin commercial
production next year of the world’s cheapest car, selling for less
than US$3,000 (K9,000) each.
Earlier this month, Tata Motors launched a two-litre vehicle,
Winger, which can comfortably seat nine to 13 passengers.
Some commercial trucks bearing the “Tata” name can indeed be seen
on Papua New Guinea’s roads.
But the Tata empire has also been smitten by the bug to become a
global enterprise.
One of the largest acquisitions involved the recent purchase of
the Anglo-Dutch steel group, Corus, for US$12.9 billion (K38.7
billion).
Other foreign acquisitions in the past 18 months have included
hotels in Australia and the United States; a German automotive
systems company; chemical operations in Britain and Morocco; a
coffee company in the US; IT/consultancy groups in Germany,
Britain, Chile and Australia and educational software companies in
Germany and Switzerland.
Building the best towns
Tata has a unique history in India as
a family-owned enterprise with a high sense of social and
corporate responsibility.
Its large Tata Steel operations, for example, are housed in the
Indian city of Jamshedpur which the Tata founder, Jamsetji Tata,
advised his son, Dorab, in 1902 that it should have wide streets
with shady trees with plenty of space for lawns and gardens and
large sporting areas as well as areas set aside for temples,
mosques and churches.
In a country that struggles with highly inadequate infrastructure,
the Tata empire has built three other Indian townships, each with
a distinct uniqueness.
At the 663-acre site it owns in Mithapur, one department at the
Tata Chemicals Group takes care of the town’s administration and
looks after residential houses, schools – it has 8,000 students
and employs over 200 teachers – and medical facilities.
An undeveloped and desolate site in Gujarat state when it was
taken over in the late 1930s, the town now boasts an assortment of
parks and gardens and, as a drought prone area, water is recycled
and used for the plants and gardens.
Some 1,400km to the north in Uttar Pradesh is another town
developed in 1992 by the company, Babrala, which now is home to
Tata’s fertiliser manufacturing operations, while a watchmaking
subsidiary has developed a township at Mathigiri in the southern
state of Tamil Nadu.
 
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