Business Today

Once upon a time...

Somnath Dasgupta | Print Edition: July 10, 2011

The diversity of India's corporate history, as reflected in the preceding pages, would be incomplete without the mention of managing agencies, tea companies and many others. Not all of them still exist, but many are instantly recognisable names. There was a time when they were familiar to stockbrokers in London and swadeshis determined to show their business mettle - names such as The Assam Company, Andrew Yule, Williamson Magor, Harrisons Malayalam, Bengal Chemicals, and His Master's Voice. The biggest were managing agencies, holding companies that ran dozens of businesses.

One example is Andrew Yule, founded in 1863, which managed 37 companies, including tea gardens, power utilities, jute mills, coal mines, a railway, and a steamship company. The first copy of independent India's Constitution was printed on paper specially made by India Paper Pulp, a Yule subsidiary.

 Pieces of history
Wallace House, Kolkata
Wallace House, Kolkata

Recording studio at Saregama's Dum Dum factory
Recording studio at Saregama's Dum Dum factory

HMV's trademark, a painting of Nipper the Dog listening to a phonograph
HMV's trademark, a painting of Nipper the Dog listening to a phonograph

In 1902, Andrew Yule even took over the zamindari of Midnapore, spread over 6,216 sq km, promoting forests, fisheries and agriculture. The Midnapore Zemindary Company was an example of the Yule family's business acumen: they acquired it when the advent of synthetic dyes killed the group's flourishing indigo business.

The Tatas, too, were an example of a successful managing agency, and ran Tata Iron & Steel as agents till the concept was abolished in 1969. In 1913, on the eve of World War I, there were at least a dozen such agencies, including Shaw Wallace, Duncan, Octavius Steel, Williamson Magor, Balmer Lawrie, and Gillanders.

Andrew Yule lost its zamindari after Independence, but remains a thriving government-owned company (profit of Rs 41 crore on revenues of Rs 240 crore). Chairman and Managing Director Kallol Datta says it was not nationalised the usual way: the government bought out the British shareholders in 1974.

According to Abhrajit Kumar Sengupta, financial consultant to the Bengal Chamber of Commerce and Industry, or BCCI, and a former Yule official, the managing agencies model reached its peak between 1950 and 1969. "Before Independence, they were interested only in merchandising, not in business," he says. After 1947, they wanted to move the capital out to nonresident holders, which is when the government put an end to the system.

While many managing agencies ran tea estates, the world's oldest commercial tea company, The Assam Company, was founded in London in 1839, based on the success of a Briton who brought the tea plant to Assam. While the initial focus was on tea, its founders knew Assam also had lime, coal, and oil, and did not want to limit their business options. So the word "tea" was kept out of the name. Today, its registered office is in a modern building on Kolkata's Chowringhee, next to Bishop's House, a building even older than the company (it was built in 1814). The company, which is also engaged in oil exploration, is now in Indian hands.

Many foreign companies and managing agencies were taken over by Marwaris who had made Calcutta their home since the early 19th century. Ghanshyam Das Birla took on the Scots who ruled the jute business. Brij Mohan Khaitan, partnered Williamson Magor, the largest tea group, and came to control it. The Khaitans own Eveready Industries, maker of tea and batteries.

The freedom struggle spurred Indian entrepreneurs, who wanted to prove that business success was not just a Western domain. Bengal Chemical & Pharmaceutical Works, India's first drugs company, started in 1893, has faded into obscurity. Bengal, the crucible of India's pharmaceutical industry, today has no big names in the field. Hari Vasudevan, director of the Maulana Abul Kalam Azad Institute of Asian Studies in Kolkata, says that one reason Bengal played no role in the industry's expansion in recent decades may be that bigger companies were nationalised, leaving smaller ones to fend for themselves in a state whose government was not as helpful as those elsewhere.

Government initiatives, such as Hindustan Antibiotics in Bangalore and Indian Drugs & Pharmaceuticals, which had a factory in Hyderabad and headquarters in Delhi, promoted foreign technology, but only in those regions. In the case of music legend HMV, now Saregama and part of the RPG Group, technology shifts have almost killed the business - but not the name. The factory that made vinyl records no longer spews smoke into the sky over Dum Dum, on the outskirts of Kolkata. It now houses studios for television programmes.

The audio recording studio can still be hired for a song, and for the chance to play the piano that iconic director Satyajit Ray used to compose music for his movies.

"Two events - 1911, when the capital moved to Delhi, and the abolition of the managing agency system - marked the shift of power to Delhi," says P. Roy, director general of Kolkata-based BCCI, whose grand office is lined with vintage bookshelves. BCCI, Incorporated in 1850 as the Bengal Chamber of Commerce, added "industry" to its name in 1950, as the shift to manufacturing changed the character of its membership. Its origins, in the Calcutta Chamber of Commerce, a traders' body started in 1834, make it India's oldest such organisation.

Today a regional body, it spawned what later became the Delhibased Confederation of Indian Industry, and promoted the Associated Chambers of Commerce & Industry of India. The shift away from Calcutta is clear. Mumbai is India's commercial capital. Delhi houses the major industry lobbies and attracts more migrants than Mumbai did in the 20th century. Who knows what tomorrow will bring?

Century-old companies but still young
1.Bennett, Coleman & Co: Just in times
2.Britannia: Not by bread alone
3.Century Textiles & Industries: Century's century
4.CESC: Power to the people
5.Dabur: Growth tonic
6.Godrej & Boyce: Safe and sound
7.Indian Hotels: Halls of fame
8.ITC: Imperial touch
9.Kirloskar Brothers: Pump and Show
10.Shalimar Paints: Paintmaker iconic
11.Tata Steel: Nerves of steel
12.TVS: Cruise control
13.The 100-year old banks
14.Jessop & Company: Grandpa of them all
15.Web exclusive: Bombay Dyeing reinventing itself
16.Web exclusive: DCM hopes to thrive again
17..The others

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