Seth Walchand Hirachand
Doshi (23 November, 1882 – 8 April, 1953) was an Indian
industrialist. A man of rare talent and
conviction, Seth Walchand Hirachand believed that India could be a
world power one day. He dedicated his life to make India self-
reliant and utilized his unrelented enthusiasm to empower people
and establish new realities to show India’s prowess to the
world.
Seth Walchand Hirachand’s life is a living example of ‘management
thoughts’ in practice. It was a life guided by a powerful vision,
through which he generated some out-of-the-box strategies,
chartering a road ahead with impeccable planning, unparalleled
human resource empowerment and rigorous project management.
Early life
Hailing from a trading community that migrated to Sholapur from
Saurashtra in the middle of the 19th century, Seth Walchand
Hirachand was born at Sholapur, Maharashtra in a Digambar Jain
family engaged in trading and money lending. He matriculated in
1899 but was not interested in the family business, and thus
started his entrepreneurial journey. Shri Walchand Hirachand was
amongst the better of the second generation of indigenous
industrial enterprises in the Indian sub-continent. He took a
burning task in his hands of facing the criticisms leveled against
Indian businessmen who entered manufacturing business as
essentially merchants and moneylenders, who wandered into
manufacturing, and that they were more profiteers and rent seekers,
than risk takers. Braving the odds, he became a classical
Schumpeterian risk taker.He found the
railway contracting business to his liking and
became a railway contractor for constructions in partnership with a
former railway
clerk,
Laxmanrao Balwant Phatak; the
partnership later became Phatak-Walchand private limited. Walchand
proved to be a successful railway contractor but was open to other
business ideas as well.
Construction business
It was in the construction business, first as a railway contractor,
and then, as a contractor to other departments of Government, that
Phatak-Walchand private limited (partnership till 1915) made money.
Phatak left the firm after it bought a foundry and undertook a
mining lease, with the view that it was stretching itself into too
many areas. Meanwhile, the firm found it difficult to bag larger
contracts due to small size and absence of marquee names. It was
merged into
Tata Construction Company in
1920 to overcome these problems.
Some of the major projects executed by the
company include the commissioning of the tunnels through the
Bhor
Ghats for a railway route from Bombay
(now
Mumbai
) to Poona (now Pune
) and laying
of water pipes from Tansa lake to Bombay.
Other
major projects executed by the firm include the Kalabag Bridge over Indus
and a bridge
across the Irrawaddy
River
in Burma
. All
these projects were directed by Walchand. In 1929, he became the
Managing Director of the company.
In 1935, the company was renamed as Premier Construction to reflect
the fact that Tatas had sold their stake in the firm to
Walchand.
Shipping
In 1919, after the end of
World War I,
he bought a
steamer, the
SS
Loyalty along with his friends, from the
Scindias of Gwalior, a royal family; His underlying
assumption was that the post-war years would also spell massive
growth for the shipping industry just as the war years had done.
However, British companies such as P&O and BI (British India
shipping) were strong in the shipping industry and most of the
attempts by domestic players till then had failed. Walchand named
his company
The Scindia Steam
Navigation Company Ltd. and competed with the foreign
players. It was recognised as the first
Swadeshi shipping company in the true sense of the
term and was referred to widely in
Mahatma Gandhi’s columns in
Young India and
Harijan on
Swadeshi,
boycott of foreign goods and Non
co-operation movement. It barely managed to survive after entering
into agreements on routes and fare wars with its foreign
competitors. However, Walchand still supported new indigenous
shipping ventures, as he believed that a strong domestic shipping
industry was the need of the hour. In 1929, he became the Chairman
of Scindia Steam and continued in the same position till 1950 when
he resigned on grounds of ill health. By 1953, the company had
captured 21% of Indian coastal traffic.
Aircraft factory
In 1939, a chance acquaintance with an American aircraft company
manager inspired him to start an aircraft factory in India.
Hindustan Aircraft was started in Bangalore in the
Kingdom of Mysore with the active support
of its diwan,
Mirza Ismail in December
1940. By April 1941, the Indian government acquired one-third of
ownership and by April 1942, it nationalized the company by
compensating
shareholders adequately.
The reasons that prompted the government for nationalizing were –
it was a sensitive and strategic sector; Japan’s advances in the
war meant that the government needed fast responses and hence,
direct ownership; and it could not allow a crucial war project to
remain undercapitalised or loss-making. Hindustan Aircraft was
renamed as
Hindustan
Aeronautics Limited.
Shipyard
To face competition in the shipping business from the British and
other foreign businesses, Walchand entered allied businesses such
as
insurance.
He also believed that
there was a strong need for a shipyard in the country and started
work on it in 1940 at Visakhapatnam
. It was named
Hindustan Shipyard Limited and
its first product, the ship
Jalusha was launched soon
after independence by
Jawaharlal
Nehru in 1948. However, the shipyard came under government
control a few months later (due to the presumed importance of the
project to country’s security and economic growth) and was fully
nationalised in 1961.
Car factory
As early as 1939, Walchand was interested in establishing a car
factory in India.
Birla family was also
working in the same direction. In 1940, he signed an
MOU with
Chrysler but could not
get clearances and concessions from the Mysore government unlike in
the case of the aircraft company. In 1945, he established
Premier Automobiles near Bombay. By
1948, the company started indigenisation in a small way with an
in-house components department.
In 1955, it tied up with Fiat
and started
manufacturing engines in India. By 1956, parts of
chassis were locally made.
Business acumen
Walchand was noted for his ambition and vision. Among his
adversaries, the more charitable termed him a dreamer while the
less charitable dismissed him as a person who wanted to run even
before learning to walk. Despite not hailing from an established
business house, the projects undertaken by Walchand were grand in
design, to say the least. While attention to detail in planning was
not one of his strengths, he always seemed to know how to find his
way around. This was true especially with respect to manpower
management, meeting deadlines and raising funds. Most of his
projects were highly leveraged. While he seemed to oppose
nationalization and government control of some of the projects he
started such as the shipyard and the aircraft factory, the fact
remains that these businesses may have had to face liquidation but
for government investing the money. Also, it needs to be noted that
the government also had a strong interest in the operation of these
industries as it directly helped in its war efforts. Despite
exercising management control in firms such as Scindia Steam
Navigation Company Ltd., Hindustan Aircraft and Hindustan Shipyard,
he was not the largest shareholder in any of these companies. He
understood the power of
mass media and
cultivated it to gather public support for his projects; while this
may appear to be easy in the politically charged days of the
British Raj, it also has to be kept in
mind that running newspapers perceived to be in opposition with the
government was fraught with dangers. Thus, it becomes clear that
his persuasive abilities were helpful in generating good press and
public goodwill towards his projects. As a contractor engaged in
construction, his biggest customer was the British government; he
worked with British officials closely in several projects. However,
he supported the
Indian
Independence Movement and most of his projects were inaugurated
(including launching of new ships) by famous
freedom fighters. He was able to maintain a
fine line between these opposite forces.
Legacy
In 1949, he suffered from a
stroke and
retired from business in 1950.
He died in 1953 at Siddhapur
. However, his legacy remains important. By
1947, when India became independent, the Walchand group of
companies was one of the ten largest business houses in the
country. The first Indian ship
SS Loyalty made its maiden
international voyage on 5 April 1919 by sailing from Bombay to
London. Walchand Hirachand was personally present on the ship.
After India became independent,
5 April has
been declared the
National Maritime day to honour that
voyage. While Walchand pioneered a role for India in several
industries, his dependence on excessive leverage and
nationalisation seem to have taken the sheen off his contributions.
The car factory, while the first in India, trailed the Birlas’
Hindustan Motors in terms of
market share. Among the other companies he
pioneered were the Walchandnagar Industries Limited, located at
Walchandnagar, an industrial township near Poona and Ravalgaon
Sugar.
Absence of direct male heirs may also have had a role in the nature
of the businesses left behind by him. For Walchand, industry was
probably not just a place to make money but also to have adventure.
For example, a visit to Hollywood inspired him to construct a huge
studio in India and he was in talks with the famous
Bollywood producer-director
V. Shantaram
without a tangible result. However, for years to come, he would
probably be remembered as the man who dared to dream.
References
- Business Legends' ' by Gita
Piramal (1998) - Published by Viking Penguin India.
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