Walchand’s ambitions were right, but the times were very wrong
If Dhirubhai Ambani woul have been born in the pre-independence era, he would have better understood the dilemma of Walchand Hirachand, who was an extremely ambitious businessman. But he happened to be the right person born at the wrong time. Born in a Gujarati Jain family in Sholapur in 1882, Walchand was never interested in his family business of selling agencies of textile mills. In 1903, he completed his first construction project of the Indian railways and by 1912, Walchand’s construction company namely Walchand-Phatak had many big projects to its credit.
Two high-capital intensive and industrial businesses that caught his fancy were shipping and manufacturing aircrafts. He floated Scindia Steam Navigation Company in 1919 (with a capital of Rs.45 million). But Walchand had to fight against the might of British India Steam Navigation Company (BINC), which ruled the Indian shipping arena. He was forced to change the route of his cargo from India-Europe to India-Rangoon, which did not yield the desired results. In 1923, Walchand unwillingly signed an agreement with the Government, which stated that Scindia’s fleet would be limited to seven ships for the next 10 years and be limited to Indian coasts only. Walchand also created a subsidiary, Haj Line Limited, but it didn’t work as rivals drastically reduced their fares. Walchand’s plans to build a modern shipyard also didn’t fructify due to the outbreak of World War II. In the 1930s, Walchand registered the Hindustan Aircraft Company in 1940. However, the Government took complete control of the company on pretext of protecting it from the Japanese. War also shattered Walchand’s car manufacturing project, which he had launched assuming that Government would appreciate it as a part of war effort and give permission to import plant and machinery.
If Dhirubhai Ambani woul have been born in the pre-independence era, he would have better understood the dilemma of Walchand Hirachand, who was an extremely ambitious businessman. But he happened to be the right person born at the wrong time. Born in a Gujarati Jain family in Sholapur in 1882, Walchand was never interested in his family business of selling agencies of textile mills. In 1903, he completed his first construction project of the Indian railways and by 1912, Walchand’s construction company namely Walchand-Phatak had many big projects to its credit.
Two high-capital intensive and industrial businesses that caught his fancy were shipping and manufacturing aircrafts. He floated Scindia Steam Navigation Company in 1919 (with a capital of Rs.45 million). But Walchand had to fight against the might of British India Steam Navigation Company (BINC), which ruled the Indian shipping arena. He was forced to change the route of his cargo from India-Europe to India-Rangoon, which did not yield the desired results. In 1923, Walchand unwillingly signed an agreement with the Government, which stated that Scindia’s fleet would be limited to seven ships for the next 10 years and be limited to Indian coasts only. Walchand also created a subsidiary, Haj Line Limited, but it didn’t work as rivals drastically reduced their fares. Walchand’s plans to build a modern shipyard also didn’t fructify due to the outbreak of World War II. In the 1930s, Walchand registered the Hindustan Aircraft Company in 1940. However, the Government took complete control of the company on pretext of protecting it from the Japanese. War also shattered Walchand’s car manufacturing project, which he had launched assuming that Government would appreciate it as a part of war effort and give permission to import plant and machinery.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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