A look at Chennai's long tryst with entrepreneurship

A look at Chennai's long tryst with entrepreneurship

Wednesday November 04, 2015,

10 min Read

A look at Chennai's long tryst with entrepreneurship at the TiE Chennai 2015 Awards

When Chennai was Madras: stories of the bustling trade metropolis at the TiE Chennai 2015 Awards


Author, entrepreneur and culture historian Sriram V. provided a stellar overview of the history of trade and industry in Madras, in his inimitable style of a flowing story laced with humour, from the days of the East India Company to just after Independence at the TiECON 2015 Awards Nite held in Chennai. East India Company was established by a Queen’s charter on December 31, 1599. By 1639, Francis Day, a Company servant, identified a 'no man’s sand' along the coast of Madras, measuring just five by three miles suitable for setting up a factory. The land was leased to the Company by the representative of the King of Chandragiri (who was an agent of the Vijaya Nagar Empire). The deed was signed on August 22, 1639. What started then expanded beyond anyone’s wildest imagination to a big metropolis—Madras. A small structure was put up in the leased land to establish the factory in 1640, and the space eventually became a white settlement named Fort St. George.

The British bought woven cloth from local weavers and exported them to Malaya, South Africa and the Caribbean. Thus, trade was the primary reason why the British came to Madras. That started also a fight for dominance of the weavers and cotton trade among the British, French, Dutch and the Portuguese. The British traders lured the weavers with money, and effectively used dubashes (middlemen who knew English and the local language) to achieve their trading objectives. The dubashes used the language barrier of the transacting parties to grow powerful and wealthy.

When the British were firmly established after conquering all the threats, they concentrated on building the infrastructure in Madras. Sriram explained, “By 1858, India had become a Crown colony.” Thaticonda Namberumal Chetty was perhaps the first Indian entrepreneur who used opportunity as a building contractor to amass wealth between the 1880s and 1920s. The colonial government’s architect Henry Irwin’s designs were converted into red-bricked edifices of everlasting beauty by Chetty. All significant landmarks of Madras such as the Victoria Hostel, Museum Theatre, Victoria Public Hall and the Central Station, among many others, that survive today bear testimony to his hard work, ingenuity and enterprise. He owned 99 houses in the Chetpet area. Sriram added, “It should also be remembered that the General Hospital [now Rajiv Gandhi Government Hospital] is the second oldest hospital in the world, operating form the same premises since 1757.”

The beginning of industry in Madras

The next wave of business growth happened around 1899 when the Madras government appointed Alfred Chatterton, the Principal of Guindy Engineering College, to study the possibility of setting up industries in the city. This was triggered by the Swadeshi Movement, in which Indians were keen on setting up an indigenous industry. V.O. Chidambaram Pillai floated a shipping company as a competition to the British-owned ships. Chatterton’s pioneering work helped in the establishment of Indian Aluminium Company (INDAL), tanning factories in Chromepet, and a pencil factory at Korukkupet, besides a soap factory set up by his colleague, Fredrick Nicolson. The Department of Industries, the first in the country, was also set up by Chatterton.

As the British started trade in Madras by mid-1600s, ships used to sail across Suez Canal to reach Madras from Great Britain. Madras lacked a harbour and ships were docked two miles from the entrance of Fort St. George. And catamarans bought people and parcels across those two excruciating miles when some parcels were typically lost. The plans made from 1769 to have a harbour did not materialise, as typically cyclones would rip apart the piers that were built. It took the genius of Sir Francis Spring, who was appointed Chairman of the Port Trust in 1904 and then Chief Engineer in 1906, to complete the port in its present shape. Work on this artificial harbour was almost complete by 1911. Sriram said, “As the harbour was built, sand piled up on the southern side as the ocean receded and rising water levels began breaching the northern side, which continues even today.” The silting of sand gifted the city the second largest beach in the world, the Marina Beach.

The Madras Port’s vicinity witnessed hectic trade activity, which also led to an increase in business growth. Sriram said, “Business by then was flourishing with the setting up of what was called private trade by the colonial administrators.” Parry and Company, Best and Company and Arbuthnot and Company were the significant ones to emerge as leading firms in South India during that time. Of the three, Parry’s alone survives today. While Best and Company eventually became Best and Crompton and fell into bad times and was eventually acquired, Arbuthnot, which specialised in banking, crashed in 1906, bankrupting even the then Governor Arthur Lawley and thousands of investors, some of whom committed suicide. This prompted setting up of a bank for Indians called the Indian Bank in 1907, with the firebrand Mylapore lawyer V. Krishnaswamy Iyer, who had shot up to prominence fighting the cause of investors bankrupted by Arbuthnot, leading the effort. Indians thus entered banking as well.

Of significance during the First World War was stealth bombing of Madras by a German ship SS Emden on the night of September 22, 1914. Three bombs fell—the first on oil tankers in Royapuram, causing a huge fire, the second one on the Second Line Beach, the third one in the High Court compound, leaving three dead and 13 injured. Sriram pointed out, “Apart from 'Emden' finding a permanent place in Tamil lexicon alluding to someone with concealment and deceit, the bombing triggered mass exodus from the city, with property being sold at throwaway prices.” The city got back on its feet as soon as the War ended. During the Second World War, Sriram said, “Madras was the only safe harbour for business, with Calcutta and Colombo under threat and Singapore already taken.” So the War brought fortune to the city of Madras by a trade boom.

The emergence of Indian enterprises

In 1903, Samuel John Green of Simpson and Company built a steam car, first ever in the world, which was test run on Mount Road for a whole day. There was considerable excitement around the car but it did not live to see its commercial success. But Simpson’s journey produced a phenomenal success story of an entrepreneur. S. Anantharamakrishnan, referred to as J, joined the Simpson’s group as an auditor in 1935. By 1939, he was inducted as a Director of the company (being the first Indian to become one), which had become a holding company just a year earlier. In 1940, it was made a public company and in 1941, the group came to be called Amalgamations with a host of businesses under its wings. Sriram said, “As Independence was becoming almost certain, J foresaw the British leaving the country once India was free.” In 1945, he bought the Amalgamations group from the British shareholders. Then began a buying spree of various businesses dotting Mount Road, and J expanded the group into a multi-crore empire with a variety of interests spanning auto components, tractors, paints, press and others by 1964, when he was to pass away at just 51. India Pistons, part of the group, was the first auto component manufacturer in the country. TAFE, another company in the group, is one of the leading tractor manufacturers in India now.

T.V. Sundaram Iyengar harboured dreams of becoming a businessman at a young age that he started one after another despite failing in three of them. The cycle repair and timber businesses he started didn’t take off. Not the one to give up that easily, in 1911, he ventured into a bus service from Madurai to Pudukottai, which laid the foundations for a motor vehicle conglomerate. T.V. Sundaram Iyengar and Sons became a prominent business group when it turned distributor for General Motors in the 1950s in Madras. The group diversified into auto component manufacture, establishing Brakes India, Wheels India, Sundaram Clayton and Lucas TVS. The financial wizard of the group, T.S. Santhanam initially started an insurance business, which diversified into a hire purchase business later. As the insurance sector was nationalised in 1972, the hire purchase business, Sundaram Finance, recorded a spectacular growth to become one of the major transport finance companies in India.

Sriram also shared the success story of M.Ct.M. Chidambaram Chettiar, who started the United India Insurance, which eventually became Life Insurance Corporation of India (LIC) after nationalisation. Chettiar built the first high-rise in Madras for the insurance company, which is a landmark and has been immortalised in many Tamil films—the 17-floor LIC building on Mount Road. Chettiar also founded the Indian Overseas Bank and its headquarters in Mount Road is another high rise.

Two stalwarts of Tamil cinema were highly entrepreneurial and tasted success due to sheer perseverance. While A.V. Meiyappa Chettiar was keen to make films his lifestyle business, S.S. Vasan started his life in difficult circumstances. AVM failed in his first four movies, before tasting success. He withstood ridicule and was almost written off but he stayed put to do the next film to find a roaring success. “One of the films was shot without realising that the camera was slightly tilted,” said Sriram. As a result, all actors became headless wonders when rushes were screened. S.S. Vasan started with a successful mail order business, bought an ailing Tamil magazine, Ananta Vikatan, and entered filmmaking by establishing Gemini Studios on Mount Road. Chandralekha, popular to this day for its drum dance, was Gemini’s first blockbuster. There was no looking back afterwards.

Sriram went on to explain the contributions of K. Kamaraj and R. Venkataraman combine in the State government to the spectacular success of the industry in the State. He also paid tribute to C. Subramanian, who stood rock solid to ensure success of the Green Revolution, to the extent of asking his lawn in his official Delhi residence be mowed to plant the new rice variety from Philippines that was looked at sceptically by farmers. Sriram ended the evening with a tribute to M.S. Subbulakshmi, the Carnatic singer whose centenary is being celebrated this year. MS was found to have earned Rs 2.5 crore during her musical career and gave the entire sum to various causes, without retaining even a single rupee with her. Sriram, quoting MS, reminded businessmen of giving back to the society and of corporate social responsibility.

TiECON Chennai 2015 Awards

TiE Chennai is known to honour businesspersons who have achieved exceptional success and is perhaps the only organisation celebrating entrepreneurship across Tamil Nadu. The winners this year were Lifetime Achievement Award—Dr. Nalli Kuppuswami Chetti; Entrepreneur of the Year—Bharath Chairman, Aparajatha Corporate Services Pvt. Ltd and Nagaraj Krishnan, Managing Director, Aparajitha Corporate Services Pvt. Ltd.; Next Generation Entrepreneur of the Year—Vedant Jhaver, CEO, Prodapt; Startup of the Year—Krish Subramanian, Chargebee; Hidden Gem—SKM. Shree Shivkumar, Managing Director, SKM Egg Products; TiE Chennai Associate Member of the Year—Siva Sivakumar, Nimble Wireless Pvt. Ltd.

The jury for the awards consisted of K. Ramakrishnan (Spark Capital) as the Chairman, and Lakshmi Narayanan (Vice Chairman, Cognizant), Dr. Vidya Mahambre (Assistant Professor at Great Lakes Institute of Management), Sushila Ravindranath (Consulting Editor, Financial Express), Smita Nataraj (Director, Entrepreneurship Development Institute of India) as the members.


Photo caption: Nalli Kuppusamy Chetty of Nalli Silks receiving Lifetime Achievement Award from Lakshmi Narayanan, member of the Awards Jury Committee.