Can Tata succeed where Ford failed?

Jan 9 2008 by Alistair Houghton, Liverpool Daily Post

WHEN Indian business websites talk about the country’s increasing clout in the international business world, there is one story about Tata Group they keep repeating.

In the early 20th century, when India was solidly under British rule, Tata founder Jamsetji Tata was determined to establish a homegrown steel industry.

He brought experts from around the world to India to set up his steel plant and planned to supply rails to Britain’s imperial railway builders. His plans were mocked by the Chief Commissioner for Indian Railways, Frederick Upcott, who said: “Do you mean to say Tatas propose to make steel rails to British specifications? Why, I’ll eat every pound of steel rail they succeed in making.”

But Tata pushed on and the first steel rolled off Tata’s production line in 1912.

And in 2007, 100 years after Upcott’s comments, his steelmaking vision won its ultimate vindication when his group bought Corus, which included the former British Steel business.

Tata had already moved into the UK market in 2000 when it bought Tetley Tea, in what was then described as the biggest international deal by any Indian firm.

Last week’s news that Tata was now Ford’s preferred bidder for Jaguar and Land Rover marks another landmark in India plc’s worldwide expansion.

Other Indian companies have already made their mark on Merseyside.

Typhoo Tea, which has its headquarters in Moreton, Wirral, was taken over in 2005 by the Apeejay Surrendra Group. And this Monday, Mumbai-based Marksans Pharma said it was set to take over Merseyside healthcare company Bells.

Indian companies are increasingly looking to invest in the UK.

In 2007 investment agency Think London said India was now the second-biggest source of foreign investment into London, investing £52bn a year.

Sharon Bamford, chief executive of the UK India Business Council, is certain more Indian businesses will invest in the UK.

“We are seeing more and more of our regions having representation in India to attract foreign direct investment,” she said.

“The more of a sales force we have there, and the more shoe leather we use up in India promoting that investment to the UK, the better.”

UKIBC officials regularly deal with parts of the Tata empire and with its managers, including Ratan Tata himself, chairman of Tata Group.

“He’s a hugely intelligent and very dignified man,” said Bamford.

“From an outsiders’ perspective, Tata is quiet, strategic, and has strong values – they’re very much a value-driven organisation.

“The consultation with unions and workers at Jaguar Land Rover appears typical. The company is very concerned about its workforce.

“They commit to businesses they buy. If you look at Tetley, you don’t see the Tata brand on it at all.

“They put the interests of the brand and the community they serve at the forefront. The process we’ve seen appears to be a typical Tata deal.”