Walchand Hirachand

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 Paatan City-North Gujarat 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 Mumbai to 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.

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.

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 PAL near Bombay. By 1948, the company started indigenisation in a small way with an in-house components department. In 1951 , PAL signed up with Fiat to assemble the Fiat500 . 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.

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.

Shri Walchand Hirachand’s greatest contribution, in my view, was in shipping and ship-building. He was a visionary in this field. It is indeed, one of the saddest chapters of our industrial policy that we failed to build on the foundation established by Shri Walchand Hirachand in this area.
When we celebrate the life of an entrepreneur like Walchand Hirachand, we must draw the correct lessons from his life. The lesson I draw is that the ultimate spur to growth and development is individual creativity and enterprise. We, in Government, can at best create the correct political environment in which that creativity, those animal spirits can flourish and find expression.

– Dr. Manmohan Singh, Prime Minister of India

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.

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