Tata #6: Assorted Tidbits

This blog is an assorted set of tidbits about the Tata companies from Shashank Shah’s The Tata Group. There’s no unifying theme to what is listed below.

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The founder of the Tata companies, Jamsetji Tata, had been to many countries. He compared India with the industrialized countries of the West (this was all pre-independence) and concluded 3 things:

“First, no country that did not manufacture iron and steel could become industrially great; second, no sustained economic growth was possible without the aid of science and technical education; and third, the prosperity of his favorite city Bombay depended upon the provision of cheap electric power.”

Hence TISCO (now Tata Steel). Hence IISc. Hence Tata Power.

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When World War II started, an Indian student was stranded and couldn’t go to Cambridge for advanced research. His ideas impressed Tata Trusts, which “invested in his research by providing infrastructure and resources in Bangalore and Bombay”. The student’s name? Homi Jahangir Bhabha. Who would go on to become the founding father of India’s atomic energy program. The institutions Bhabha subsequently founded were also funded by Tata Sons – the Tata Institute for Fundamental Research (1945) and the Bhabha Atomic Research Center (1954), which “became the cradle for India’s indigenous nuclear program”.

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Post-independence, as India struggled with foreign exchange reserves, the government banned imports of all non-essential items, “including cosmetics and perfumes”. The elite women of Delhi were upset! They besieged the future PM (then hostess of Teen Murti Bhavan), Indira Gandhi, at home and work. The PMO too got its share of complaints and pleas on the same front. The government asked domestic companies to fill the vacuum, and assured them government support. And so it came to be that the Tatas launched Lakmé, via their existing company, TOMCO. After all, TOMCO had some experience in the retail business – earlier, they had launched the Hamam bathing soap and ‘501’ laundry soap.

 

Why a weird name like ‘501’? That was because there was a French soap called ‘500’. The Tatas thought they could do one better. Literally.

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The Tata group’s market value rose slowly over a century. Does that prove they weren’t the best businessmen after all? Ishaat Hussain, chairman of Voltas, disagrees with that assessment:

“Do they know that between 1958 and 1992, Tata Steel was not allowed to expand at all? That Tata Motors could not produce more than 30,000 trucks a year, despite a production capability to make ten times that number?... All these companies (largest insurance company, second largest bank in the private sector, Air India) were nationalized… How can you expect a comparison with (Western companies) who never had to go through the License Raj?”

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Salt. It is a commodity, right? Just NaCl. How do you differentiate it from “other” salt? Can you even build a brand around salt? In the 1980’s, the Indian government and WHO were actively pushing for iodized salt to counter goiter. Indira Gandhi approached Tata Chemicals to address this concern. And so Tata Salt came to be, India’s first iodized salt. The advertising created a strong emotional connect, that resonates even today:

“The stupendously selling Tata Salt made Tata Chemicals reach more consumers in India than any other Tata company.”

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Once upon a time, the only watches in the country were the ones made by HMT. When the government allowed competitors to enter the market, Titan’s watches were based on analogue electronic quartz. The tech wasn’t the only change:

“(Titan had converted) the watch from a utilitarian timekeeping device to a fashion accessory... (It began) categorizing the products for looks such as dressy watches, formal watches, casual watches…”

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Harry Stonecipher sums up the diversity of the Tata companies perfectly:

“The Tatas are the one company in the world that combine the attributes of the old-line industrial giants like US Steel, Dow Chemical and Ford, leading lights in the service sector like Hilton Hotels, major utilities like Commonwealth Edison and highly innovative newcomers like Microsoft and Compaq.”