The Hindu Business Line : In the company of men of steel

One hundred years ago Jamsetji N. Tata went to London to meet Lord George Hamilton, Secretary of State for India under Queen Victoria, to request the cooperation of the government in his building a steel plant for India. Now Tata Steel wins the bid to buy out the Anglo-Dutch steel giant Corus.

Steely resolve

Jamsetji told Hamilton that he first thought of a steel plant when he was young and ambitious. Now, he was old and God had blessed him with more than he needed. If he undertook it now, it would be for the sake of India. Hamilton was sparked by the vision of Jamsetji — and, perhaps, his sheer audacity. Hamilton said his government would cooperate and he kept his word.

Jamsetji's visit was prompted by a report in 1899 from Major R. H. Mahon that India was now ready for the manufacture of iron and steel. For iron ore, he suggested Salem district in Madras Presidency, Chanda district in the Central Province, and Bengal. On receiving the assurance of Hamilton, Jamsetji cabled his office in India to obtain prospecting licence. He made the initial mistake of entrusting the prospecting to local agents who were not up to the standard.

TO THE US FOR ADVICE

Two years later, he went to America to get the finest technical advice available in the world. In Pittsburgh, he met Julian Kennedy, the foremost steel expert, who warned the aging Indian that even the preliminary investigation could cost a fortune and there was no guarantee of any returns. He suggested that survey of the raw materials be made by Charles Page Perin, the best geologist in America. In New York, Jamsetji went to Perin's office.

Perin said later: "I was poring over some accounts in the office when the door opened and a stranger in a strange garb entered. He walked in, leaned over my desk and looked at me fully a minute in silence. Finally, he said in a deep voice, `Are you Charles Page Perin?' I said, `Yes'. He stared at me again silently for a long time. Then slowly he said, `I believe I have found the man I have been looking for. Julian Kennedy has written to you that I am going to build a steel plant in India. I want you to come to India with me, to find suitable iron ore and coking coal and the necessary fluxes. I want you to take charge as my consulting engineer. Mr Kennedy will build the steel plant wherever you advise and I will foot the bill. Will you come to India with me?'

"I was dumbfounded, naturally. But you don't know what character and force radiated from Tata's face. And kindliness, too. `Well', I said, `yes, I'd go'. And I did."

Vision beyond wealth

Perin sent his partner, C. W. Weld, in April 1903, not the best weather for exploration. With Dorabji Tata, eldest son of Jamsetji, and a cousin, they travelled by bullock-cart in the uncharted territory of Chanda district, Central India. Food was difficult to obtain. They were often compelled to brew their tea with soda water. Sadly, the iron ore was only in pockets and not in a continuous area. Weld was all set to go home, as any businessman would have tried to cut his losses on an expensive consultant. But when he was invited to stay on, he realised that Jamsetji was inspired by something far greater than merely to amass a fortune. Finally, after lot of adventures, a site was found in 1907. But Jamsetji had passed away three years earlier. Thereafter, many struggles were encountered, but the vision of Jamsetji enabled his successors to move forward.

Re-christening of Sakchi

In 1912, the first ingot of steel rolled out and two years later World War I broke out. Britain found that the only source of steel for the war effort East of Suez was in India. Within two months of the War ending, the Viceroy came to the Steel Works at Sakchi, as the place was known.

Standing on the steps of the Directors' Bungalow, he said: "I can hardly imagine what we should have done during these four years (of war) if the Tata Company had not been able to give us steel rail which have been provided for us, not only for Mesopotamia but for Egypt, Palestine and East Africa, and I have come to express my thanks...

"It is hard to imagine that 10 years ago, this place was scrub and jungle; and here, we have now, this place set up with all its foundries and its workshops and its population of 40,000 to 50,000 people. This great enterprise has been due to the prescience, imagination and genius of the late Mr Jamsetji Tata ...

"This place will see a change in its name and will no longer be known as Sakchi, but will be identified with the name of its founder, bearing down through the ages the name of the late Mr Jamsetji Tata. Hereafter, this place will be known by the name of `JAMSHEDPUR' (applause)."

In 1924, a message came from Jamshedpur that there was no money for paying salaries to staff and workers, Sir Dorabji Tata, accompanied by JRD's father, Mr R. D. Tata, went to the Imperial Bank of India to pledge his entire personal wealth, then estimated at Rs 1 crore, which is about Rs 100 crore today, and it was for a public limited company. Motilal Nehru in the Central Legislative Party called on the government to stop the dumping of foreign steel at lower prices. The government, in spite of protest by British interests, supported an Indian industry for the first time. Purchase of steel rails was promised for three years and Tata Steel survived. In both World War I and II, Tata Steel saved the day for the Empire.

Price control

The next challenge came during the 1960s, when Tata Steel and other steel plants, mostly government's, all suffered from the controls on pricing. What steel to make and how much were controlled. Government steel plants could fall back on the public exchequer, the Tatas could not. They were operating with machinery dating from the 1920s and the 1950s and still working with innovative methods at 106 per cent capacity — higher than any modern plant of the government. But they had no reserves and could not modernise.

One day in the early 1980s, Dr J. J. Irani told J. R. D. Tata: "If we do not modernise the entire plant, 10 years from now you and I would be standing at the gate of Tisco selling tickets to a steel museum!" JRD was amused, but took him seriously. "Do not listen to what these finance people say. You come directly to me." JRD saw through the first of four phases of modernisation, when liberalisation in 1991 hit many industries. In 1992, Dr Irani became Managing Director. In 1992, it was under his leadership that the steel plant was turned around — both technically and in terms of reduction of surplus staff keeping the company's good relations intact.

His successor, Mr B. Muthuraman, credits the turnaround to Dr Irani's "fantastic leadership". It is a story in itself. When he stepped down in 2001, this plant, which would have been a "steel museum", was rated as a `world-class company'.

The World Steel Dynamics, the world's leading steel information service, according to its own strict parameters, put Tata Steel No. 1 in 2001 — ahead of Arcelor, Posco of Korea, and Nippon Steel of Japan.

The ground was prepared for the expansion and acquisition by Tata Steel under Mr Muthuraman — Natsteel of Singapore, Millennium Steel of Thailand and now Corus, the Anglo-Dutch giant, almost four times the capacity of Tata Steel.

As a former vice-chairman of Tata Steel said, Tata Steel is a part of the geography and landscape of India — as much a part of her as her great mountain ranges and rivers.

Now it has planted its imprint beyond India.

(The writer is author of `The Creation of Wealth — The Tata Story', Penguin.)

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