27 Oct, 2012 06:49 IST
Bath And Bed To Realty
Big on pedigree, the Wadias are now banking on land to give their empire scale
Gurbir Singh & Nevin John
THE GEN NEXT: For brothers Jeh and Ness Wadia, promoters of the Wadia Group, size is no big deal (BW pic by Umesh Goswami)
Bombay Burmah was floated in 1863 by tea traders Wallace Brothers who went on to become big suppliers of Burmese teak. By the 1880s, the British cast a nervous eye at the increasing bonhomie between the French and Burmese king Thibaw Min. A fine imposed on Bombay Burmah for under-reporting its teak logging and for not paying employees became a convenient excuse.
The British demanded the Burmese accept a British arbitrator to settle the dispute. When the Burmese refused, a flotilla of ships and sepoys under Major General Harry North Dalrymple Prendergast was dispatched down the Irrawaddy river to subdue the Burmese. Mandalay (the royal capital) fell on 28 November 1885, and on 1 January 1886, Burma (now Myanmar) became a British colony.
The Wadias took over BBTC around 1913 and went on to bring 7,000 acres under tea cultivation in south India; they had 1,500 acres of coffee estates in Coorg and rubber plantations in Indonesia. BBTC, India’s second oldest publicly quoted firm after the East India Company, is part of corporate India’s history.
But there is more to the Wadia pedigree. About 276 years ago, in 1736, Loeji Nusserwanjee Wadia founded a company of master shipbuilders. The group’s website boasts of the 355 ships the Wadia ancestors built, including the HMS Trincomalee — the second oldest ship in the world still afloat at Hartlepool, the UK.
Close on the heels of BBTC, Nowrojee Nusserwanjee Wadia in 1879 saw an opportunity in weaving cloth in Mumbai, then the world’s cotton trading capital, and launched the Bombay Dyeing & Manufacturing Company from “a humble red-brick shed”. Bombay Dyeing rose to become the Wadias’ biggest brand.
Despite all this history to show, the Wadia Group today is a modest Rs 10,000 crore ($2 billion) operation. Founded in 1966, Reliance Industries (RIL), which group chairman Nusli Wadia took on unsuccessfully in the 1980s, is today 34 times larger with an annual turnover of $69 billion (Rs 3.4 lakh crore). Most of the 19th and 20th century entrepreneurs grew business after liberalisation. In 1991, the country’s leading family business houses — the Tatas, the Aditya Birla group and the Ambanis — had a group turnover of Rs 14,000 crore, Rs 3,100 crore and Rs 2,300 crore, respectively. By March 2012, the Tatas scaled up to Rs 4.8 lakh crore and Aditya Birla to Rs 2.1 lakh crore.
But for Ness Wadia, Nusli’s elder son and corporate head of various Wadia companies, size is not a big deal. “The more you own, the more you cannot control. We are happy with what we have. It is not only about billing; it is about what you give back to society; about serving the country,” he says, pointing to the work the group is doing in setting up colleges and hospitals.
In corporate circles, though, the Wadia legend is much larger than its size. Some of it has to do with celebrity status. Ness — as co-owner of IPL cricket team Kings XI Punjab with actor Preity Zinta — and Nusli’s wife Maureen — as editor-publisher of fashion magazine Gladrags and coordinator of beauty pageants — have added glitz to the family. But more of the Wadia legend is related to Nusli’s ability to fight and win corporate battles against larger adversaries.
Fighter By Choice
‘Corporate Samurai’ is just one of the many epithets worn by Nusli. His first steps in business tempered him to the view: never back off. Just 26 in 1971, he rejected the announcement of his father Neville to sell Bombay Dyeing to R.P. Goenka. Wadia Junior struck back with everything he could garner. He used his 11 per cent shareholding, his mother Dina Mehta and J.R.D. Tata’s support; he even got unions to back him. Finally, Bombay Dyeing stayed in Wadia hands.
But later, he lost the well-documented textile war with Dhirubhai Ambani. Both were in textile production and went for backward integration for polyester fabric with competing products. Reliance set up its Patalganga unit and went for manufacturing purified terephthalic acid, the base for polyester filament yarn (PFY). Bombay Dyeing took the di-methyl terephthalate route. In the battle for licences, Wadia was worsted and PFY won the marketplace.