Ratan Tata
Reinforcing Ties
By virtue of their presence in Singapore, Indian powerhouse Tata Group, with its plethora of companies in diverse areas like manufacturing, engineering, communications and information technology, has helped to vitalise the nation’s economy through the years. Although it was his uncle who first established the group’s presence here in 1972, it was India-born Ratan Tata who went on to build on the family connection and expand the company’s valuable ties with Singapore.
The Tata Group has been present in Singapore since 1972. Ratan Tata’s uncle, Jehangir Ratanji Dadabhoy “JRD” Tata, who was then the group’s chairman, was asked by Prime Minister Lee Kuan Yew whether he would start up a business in the precision engineering industry and a training institute for young people here. JRD did not readily agree to Lee’s proposal. India had been a closed economy since its independence in 1947 and so Tata Group’s business moves were limited by foreign exchange controls.
But he recognised the benefits of being in Singapore and eventually went on to set up the Tata Precision Industries and the Tata-Government Training Centre, which taught skills related to the manufacturing industry like tool making and precision machining.
For many years, Tata Group was probably the only Indian company which invested in Singapore. S. Dhanabalan, who was chairman of the Development Bank of Singapore, now known as DBS Bank, was involved in helping Tata Precision Industries gain a footing here. He said in an interview with writer Sunanda K. Datta-Ray for the book, Looking East to Look West: Lee Kuan Yew’s Mission to India, that JRD took the risk when “all kinds of acrobatics were needed for Indians to travel, let alone set up overseas operations.” Explaining JRD’s decision, Tata said, “We considered Singapore to be the model of what India could look like if it could have the freedom to grow.”
Tata graduated with a Bachelor of Architecture from Cornell University in 1962. He returned to India and started work on the shop floor of Tata Steel, shovelling limestone and iron ore into furnaces. He worked his way up and became the chairman of Tata Sons in 1991, taking over from his uncle, JRD. He also became chairman of the major Tata companies: Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Global Beverages, Tata Chemicals, Indian Hotels and Tata Teleservices.
Tata valued the boots-on-the-ground working experience. “Otherwise I would never have had the chance to work alongside workers to understand how they felt or what their thinking was,” he said, adding that the experience also moulded him as a leader, and he believes in the bottom-up approach to management.
Under his leadership, the Tata Group became the first Indian company to make major overseas acquisitions, and took over companies like luxury car group Jaguar Land Rover and steel maker Corus. In FY 2014/15, Tata Group’s revenue was
US$108.78 billion.
In 2004, his company spent $486 million to buy out Singapore-based NatSteel, a steel producer which had steel mills in China, Thailand, Vietnam, the Philippines and Australia. With the acquisition, NatSteel could weather volatilities in the steel industry and gain access to extensive resources through Tata Steel.
Tata also used Singapore as the regional headquarters for nine of its companies, ranging from engineering to shipping. “Regional headquarters made sense as Singapore had all the facilities that you would need as though you were located in London or New York,” explained Tata. One of the first companies to be set up in Singapore was Tata Consultancy Services, which provides information technology consulting services to both multinational and domestic companies. It has become Asia’s largest software companies, employing over 1,000 staff in Singapore in 2015. There are also Tata companies in manufacturing, engineering, communications and information technology.
In 2013, Tata achieved a long-awaited dream and established a domestic airline in India in partnership with Singapore Airlines. Vistara, the joint venture airline, was a significant achievement for two reasons: First, Tata is a trained pilot and had bonded with JRD over their shared passion for aviation. JRD became India's first licensed pilot in 1929, and founded India’s first commercial airline, Tata Airlines, in 1932. JRD used to fly Tata Airlines over 874 kilometres to deliver mail from Karachi to Bombay. The airline was nationalised in 1953 and became Air India. Second, Tata had tried to team up with Singapore Airlines in 1994 but the plan did not materialise due to strict regulations on foreign direct investment in certain sectors. But with India opening up its airline sector to 49% foreign direct investment in 2012, the joint venture was approved. Vistara began operations in January 2015 with its inaugural flight between Delhi and Mumbai.
Tata retired in 2012, on his 75th birthday, and now spends his time advising the Tata companies and leading the Tata Philanthropic Trusts. The Trusts aim to combat malnutrition in India. He has worked on public education campaigns educating parents about the importance of nutritious food, and has set up health facilities in villages. In 2008, Singapore conferred the Honorary Citizen Award on Tata.
References
Amol Sharma, “India Tata Finds Home Hostile,” The Wall Street Journal, April 13, 2011,
http://www.wsj.com/articles/SB10001424052748704662604576256921125394838
Peggy Hollinger, “Business Pioneers in Industry,” Financial Times, March 31, 2015,
http://www.ft.com/intl/cms/s/2/c18fd2c6-cc99-11e4-b5a5-00144feab7de.html
Sunanda K. Datta-Ray, Looking East to Look West: Lee Kuan Yew’s Mission to India
(Singapore: ISEAS Publishing, 2009).
Ratan Tata
India, b.1937