How TATA STEEL became the GREATEST Company in INDIAN History? | Business Case Study Ep2 Tata Series

Summary

This video script recounts the remarkable history of Tata Steel, India's economic powerhouse for over 114 years. It details the visionary efforts of Jamsetji Tata, inspired by philosopher Thomas Kalail, to establish a steel industry in India despite British rule. The script explores the significance of steel in the Industrial Revolution, Tata Steel's resilience through global crises, and the Tata Group's commitment to nation-building. It concludes with lessons for future leaders on the importance of continuous learning, strategic industry investment, and business as a service to the nation.

Takeaways

• 🏭 Tata Steel has been a cornerstone of India's economy for over 114 years, surviving major global crises like two world wars, the Great Depression, and national wars.
• 🌟 Jamsetji Tata was inspired by a lecture by Thomas Kalail, which emphasized the importance of steel in a nation's development, leading him to dedicate his life to establishing an iron and steel plant in India.
• 🛤️ The invention of cost-effective steel production by Henry Bessemer in 1856 revolutionized the industrial revolution and made steel a fundamental material for development, including in railways and construction.
• 🔍 Jamsetji Tata spent 17 years researching and exploring for iron ore deposits across India, demonstrating his commitment to building a solid economic foundation for the country.
• 🚀 Tata Steel's establishment was a strategic move to support India's industrial growth and became a major supplier of steel, especially during World War I, and played a crucial role in the nation's post-independence recovery.
• 🤝 Despite being under British rule, the British government allowed Indian enterprises like Tata Steel to grow due to the realization of the benefits of local steel production for infrastructure development.
• 💼 The Tatas' commitment to their workers during economic downturns, such as the Great Depression, by not laying off employees and providing welfare schemes, set them apart from other industries and contributed to their long-term success.
• 📚 The importance of continuous learning and being a student of one's industry is highlighted by Jamsetji Tata's pursuit of knowledge even at an older age, which led to the establishment of a billion-dollar asset for India.
• 💡 Capitalism and strategic investments in industries are key drivers of a nation's economy, as demonstrated by the Tatas' foresight in laying the foundations for India's textile, steel, and power industries.
• 🌱 The Tatas' philosophy of growing their business not just for profit but as a service to the nation and humanity is a lesson for future leaders on the true spirit of entrepreneurship and nation-building.
• 📈 The resilience and adaptability of Tata Steel, even during turbulent times, showcases the importance of visionary leadership and the ability to navigate through economic cycles for long-term success.

Q & A

How long has Tata Steel been a significant part of India's economy?

Tata Steel has been a significant part of India's economy for more than 114 years, enduring through some of the most turbulent times in world history.

What was the pivotal event that inspired Jamsetji Tata to establish an iron and steel plant in India?

Jamsetji Tata was inspired to establish an iron and steel plant in India after attending a lecture by British historian and philosopher Thomas Kalail, who emphasized the value of iron and its potential to bring prosperity to a nation.

What was the significance of Henry Bessemer's invention in 1856 for the steel industry?

Henry Bessemer's invention in 1856 allowed for a cost-effective and mass-producible technique to make steel, which reduced the cost of steel production significantly and catalyzed the entire industrial revolution in the western world.

Why did the British government allow Indian enterprises like Tata Steel to grow during the British Raj?

The British government allowed Indian enterprises like Tata Steel to grow because they realized the profit was in making railways, importing steel was costly, and local production was more viable. Additionally, World War 1 turned their attitude from jealousy to positive encouragement.

What was the impact of World War 1 on Tata Steel and Indian enterprises?

World War 1 turned the British Empire's attitude towards Indian enterprises from jealousy to positive encouragement, allowing them to grow and become suppliers of steel and other materials, thus establishing themselves as unshakable entities in the Indian business ecosystem.

How did the Tata Steel manage to avoid labor strikes during the Great Depression?

Tata Steel managed to avoid labor strikes during the Great Depression by not firing any workers, even when facing financial difficulties. The Tatas introduced several welfare schemes for the workers and their families, ensuring job security and support.

What were some of the welfare schemes introduced by the Tatas for their workers during the Great Depression?

The Tatas introduced schemes such as free medical aid, a retirement benefit scheme, maternity benefits, and the Suraksha scheme for families of contract workers who suffered accidents at the Tata Steel premises.

What is the connection between the Tata Steel and the industrial revolution in Western nations?

The connection between Tata Steel and the industrial revolution in Western nations is that steel became the most fundamental pillar of Western nations' development due to its cheap production and high durability, which was also embraced by Tata Steel in India.

What is the significance of the discovery of iron ore deposits in Sakchi for Tata Steel?

The discovery of iron ore deposits in Sakchi was significant for Tata Steel as it provided a large and accessible source of raw material, just 45 miles away from the railway station, which was crucial for the establishment and growth of the steel plant.

What lessons can future leaders learn from the history of Tata Steel and the House of Tatas?

Future leaders can learn the importance of continuous learning, strategic investment in industries as engines of national economy, and growing businesses not just for personal fortune but as a service to the nation and mankind.

Outlines

00:00

🏭 The Legacy of Tata Steel: Resilience and Growth

This paragraph delves into the history and significance of Tata Steel in India's economic landscape. Founded over 114 years ago, it has withstood global turmoil including two world wars and the Great Depression. Jamsetji Tata's vision, inspired by a lecture by Thomas Kalail, led to the establishment of India's first iron and steel plant. Despite the challenges of the British Raj, Tata Steel emerged as a dominant force in the global steel industry. The paragraph also highlights the revolutionary impact of steel on the industrial revolution and the strategic importance of steel in nation-building.

05:01

🛤️ Tata Steel's Role During British Raj and the Great Depression

This section explores the reasons why the British government allowed Tata Steel to flourish during colonial times. The British prioritized railway construction for trade expansion over steel production, realizing the high costs of importing steel. The onset of World War I shifted the British attitude from jealousy to encouragement, as Tata Steel became a crucial supplier of steel. The paragraph also discusses the post-war recession and the Great Depression's impact on the global economy, contrasting the Tata's approach to labor with other industries of the time. While many fired workers during the economic downturn, the Tatas maintained employment, even selling personal assets to secure worker wages and benefits, demonstrating their commitment to the nation's economic stability.

10:02

📚 Business Lessons from the House of Tatas

The final paragraph focuses on the valuable business lessons that can be learned from the Tata Group's history. It emphasizes the importance of continuous learning and staying informed about industry advancements, as exemplified by Jamsetji Tata's pursuit of knowledge even in his forties. The strategic investment in industries like textiles, steel, and power during the British Raj is highlighted as a key factor in India's post-independence recovery. The paragraph concludes with the idea that great businessmen view their ventures as a service to the nation and humanity, not just as profit-making enterprises. The summary also mentions the 'House of Tata' small case investment app and encourages viewers to subscribe for more insightful content.

Keywords

💡Tata Steel

Tata Steel is a prominent company in the history of India, known for being a major pillar of the country's economy for over 114 years. The company's resilience through turbulent times, such as world wars and economic depressions, is a testament to its strength and influence in the global steel industry. The video script highlights the company's history and its role in India's industrial development.

💡Industrial Revolution

The Industrial Revolution refers to a period of rapid industrialization that began in Great Britain in the late 18th century and spread to other parts of the world. It marked a significant shift from agrarian societies to industrialized ones, driven by advancements in manufacturing, transportation, and technology. In the script, the invention of cost-effective steel production by Henry Bessemer in 1856 is highlighted as a catalyst for the Industrial Revolution, making steel a fundamental material for development.

💡Jamsetji Tata

Jamsetji Tata, the founder of the Tata Group, is a central figure in the script. His vision and determination to establish an iron and steel plant in India were inspired by a lecture by Thomas Kalail, emphasizing the value of iron for a nation's prosperity. Jamsetji's tireless work for 30 years until his death laid the foundation for Tata Steel and contributed to India's economic growth.

💡Steel Production

Steel production is the process of creating steel, which is an alloy of iron and other elements, primarily carbon. It is a key industrial process that has been crucial to the development of infrastructure, such as railways. The script explains how the cost of steel production was significantly reduced by Henry Bessemer's invention, making it a more accessible material for large-scale industrial and construction projects.

💡British Raj

The British Raj refers to the rule of the British Crown in the Indian subcontinent between 1858 and 1947. During this period, India was a part of the British Empire, and the script discusses how Tata Steel managed to grow and prosper under British rule. The British government's liberalization of mining laws and their need for steel during World War I allowed Indian enterprises like Tata Steel to flourish.

💡Durabji Tata

Durabji Tata, the son of Jamsetji Tata, is mentioned in the script as a key figure who, along with his brother RD Tata, carried forward the dream of establishing Tata Steel after Jamsetji's death. His leadership during challenging times, such as the Great Depression, is highlighted for maintaining the company's stability and commitment to its workers.

💡Great Depression

The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in 1929. The script discusses the impact of the Great Depression on the global economy and the steel industry, particularly noting that Tata Steel did not witness any labor strikes during this period, which was a testament to the company's commitment to its workers.

💡Strategic Investments

Strategic investments are long-term investments made in key areas that are expected to yield significant benefits over time. In the context of the script, Jamsetji Tata's decision to invest in the steel industry is considered a strategic move that laid the foundation for India's economic development and the growth of the Tata Group.

💡Labor Strikes

Labor strikes are work stoppages caused by the mass refusal of employees to perform work in protest against their employers. The script emphasizes that despite the economic hardships during the Great Depression, Tata Steel did not experience any labor strikes due to the company's ethical approach and commitment to its workers' welfare.

💡Economic Foundation

An economic foundation refers to the basic structures and systems that support the economy of a nation or region. In the script, Jamsetji Tata's efforts to establish an iron and steel plant are portrayed as a means to build a solid economic foundation for India, which would support the country's long-term growth and development.

💡Capitalism

Capitalism is an economic system based on private ownership of the means of production and their operation for profit. The script suggests that capitalism, when strategically applied, can be a powerful force for national growth, as demonstrated by the investments made by the Tata Group in various industries, which have contributed to India's economic strength.

Highlights

Tata Steel is a major pillar of India's economy for over 114 years, surviving through turbulent times including two world wars and economic depressions.

Jamsetji Tata was inspired by a lecture by Thomas Kalail, which led him to work towards establishing an iron and steel plant in India for 30 years.

The invention by Henry Bessemer in 1856 revolutionized steel production, reducing costs and catalyzing the industrial revolution.

Steel became a fundamental material for development due to its strength, durability, and cost-effectiveness compared to cast iron.

Jamsetji Tata's vision led to the discovery of 3 billion tons of iron ore in Sakchi, setting the stage for India's participation in the global steel revolution.

Tata Steel Limited was incorporated in 1907, continuing Jamsetji's legacy with the first steel ingot rolled out in 1912.

The British government allowed Indian enterprises like Tata Steel to grow due to the high cost of importing steel and the need for local production.

World War I positively encouraged Indian enterprises as the British Empire needed their support for the war effort.

Tata Steel supported the British during the war to prevent the British Empire from taking over the plant and to secure India's economic future.

During the post-war recession, Tata Steel faced challenges but managed to avoid labor strikes by prioritizing worker welfare.

The Tatas introduced schemes for workers' families, including free medical aid and retirement benefits, even during financial hardships.

The Great Depression saw industrialists laying off workers, but the Tatas did not witness a single labor strike due to their commitment to employees.

The Tatas' approach to business as a service to the nation and mankind set them apart from ordinary industrialists.

Three key lessons from the Tatas include the importance of continuous learning, strategic industrial investments, and business as a service to the nation.

The Small Case app offers investment opportunities in the best Tata companies through the House of Tata Small Case.

The Small Case app provides automatic stock rebalancing and market updates through its new section and newsletters.

Transcripts

hi everybody tata steel is one of the

greatest companies in the history of

india and the most astonishing thing

about this company is that it has been a

major pillar of india's economy for more

than 114 years

and these 114 years include the most

turbulent times in world history

including two world wars the great

depression and four national wars

but all throughout these times tata

steel has stood tall and managed to

become a dominating force in the world

steel industry the question is how did

tata steel become such a formidable

company how did it manage to remain

powerful even during the british raj and

most importantly what are the lessons

that we need to learn from the

incredible house of the tatas

this is a story that dates back to 1880s

india when jamshee ji tata was traveling

around the world to understand the

different advancements in the textile

industry

during this time he attended a lecture

by a british historian and philosopher

by the name thomas kalail and in this

lecture thomas kalil stated that a

nation that understood the value of iron

would reap its weight in gold and jamshi

ji was so inspired by his lecture that

for the next 30 years until his death

jamshedji worked tirelessly to establish

the iron and steel plant in india

the question is why did thomas khalil

say that and what was the underlying

meaning of his statement well as it

turns out the 1860s was the most

important decade of the 19th century

during this time although railways was a

revolutionary invention its cost of

operation and expansion was very very

high this was mainly because cast iron

that was being used to lay the tracks

was extremely costly they could not

carry a lot of load and they also needed

a lot of maintenance this was because

cast iron was susceptible to rust

meanwhile steel production was even more

costly because of which steel was only

used in small quantities in tools like

swords and cutlery but in the historic

year of 1856 a british engineer named

henry besmir invented a cost-effective

and mass-producible technique to make

steel

and this process was such a breakthrough

that during that time it reduced the

cost of steel production by 82

from 40 pounds to just six to seven

pounds per long ton

and this invention ladies and gentlemen

alone catalyze the entire industrial

revolution in the western world and in

the next 10 years steel became a general

purpose material and was being used in

every important aspect of development

starting from construction all the way

up to the railways

and steel was not just revolutionary

because of its cheap production but also

because when it was used in railways it

could withstand way more loads as

compared to iron and more importantly

the maintenance of railways became

extremely cheap therefore steel became

the most fundamental pillar of western

nations development

this is the reason why thomas khalil

said a nation that understood the value

of iron would reap its weight in gold

and as soon as jamshedji understood this

he spent the rest of his life in the

pursuit of building an iron and steel

plant for india during this time

jamshedji tata had established the

iconic empress mill in nagpur and like

we saw in the previous tata episode

within a very short span of time it had

become a pioneer and a market leader in

the textile industry

but in spite of having all the wealth in

the world jamshay jay tata was more keen

on building a solid economic foundation

for india than building his own fortune

so as soon as he came to india he

started reading every single report

published by every renowned geologist so

that he could find iron hole deposits in

india and the craziest thing about this

legend is that jamshedji and his team

spent not 5 not 10 but the next 17 years

in finding and collecting samples for

iron ores at the same time he was also

managing and growing his textile

business

and as the great saying goes fortune

always favors the bold and persistent

finally after 17 years of exploration in

1899 in the small village of sakchi

jamshee ji tata's geologist perin ended

up finding 3 billion tons of ore and the

best part was that this ore was located

just 45 miles away from the railway

station

and this is how ladies and gentlemen

india embarked on its journey to

participate in the steel revolution of

the world but unfortunately jamshedji

wasn't alive to see his dream come true

while he passed away in 1904 his son

dhurabji tata and brother aldi tata took

his dream forward and finally the tata

steel limited was incorporated in the

year 1907 with the name tata iron and

steel company limited

and after five long years of preparation

and fundraising in 1912 the first steel

ingot rolled out to the factory

now the question over here is all of

this was happening when india was under

the british raj right then the question

is why and how did the british

government allow these indian

enterprises to grow

well there were three reasons for that

number one the britishers realized that

the real profit was not in making steel

but in making railways so that they

could make money with trade expansion so

the construction of the railways was

more important than the steel plant

secondly they realized that importing

steel all the way from britain or the

neighboring colonies was extremely

costly and an extremely tedious

procedure and obviously surveying the

entire subcontinent was also not a

viable option

therefore they liberalized the mining

laws so that people like jamshedji could

use their resources and provide steel

for the government and lastly on 28th of

july 1914 world war 1 broke out

and this turned the british empire's

attitude towards indian enterprises from

jealousy to positive encouragement now

over here some people often ask me as to

why the tatas help the britishers

couldn't they just let the britishers

lose the war

well it's not as simple as that guys

because had they done that the british

empire would have easily taken over the

plant forcefully which means what three

billion tons of ore would belong to the

britishers and on top of that they would

have banned the tatas from building the

other industries one of which was tata

power which even to this day is one of

india's most valuable assets

so while most of us think of industries

as just money making machines it is

important for us to note that empires

might rise and fall wars might come and

go but if a nation strategically invest

into industries these industries will

act as the most important engines of a

nation's economy and they will last for

centuries in this case if you look

carefully even during the british raj

jamshedji tata laid the foundations of

three of the most important industries

in india that is textile steel and power

and the absence of these industries

would have left india in ruins during

the post independence period a classic

example of the same is the state of

singapore in 1965.

this is a reason why the tatas supported

the britishers in that period tisco

became the only supplier of steel in

india and it enjoyed a terrific boom and

tata steel alone supplied

miles of rail and 300 000 tons of steel

material

and this created thousands of jobs for

the indian workers and established tata

company as an unshakable entity in the

indian business ecosystem

and just when everyone thought that

disco was all set for the high the world

war bubble burst and in 1920 the world

witnessed something called the post-war

recession and suddenly there was no

longer a soaring demand for steel and no

more jobs for the soldiers

in fact in america alone the number of

active soldiers fell from 29 lakhs to

just 3.8 lakhs within just two years in

1920

and india was no different either as the

war wrapped up the indian industries got

badly affected and tata steals only

regular customer japan was shaken up by

an earthquake which again killed the

demand for steel

the condition was so bad that sbi which

was back then known as the imperial bank

of india they refused to extend loans to

the tatas

and to make matters worse on 29th of

october 1929 the new york stock exchange

collapse which pushed the world into one

of the worst economic crisis in world

history

this was nothing but the period of great

depression which lasted for 10 years

from 1928 to 1938.

now during such a time the

industrialists followed a very simple

procedure they immediately fired all of

their employees because they already

made a ton of money during the war and

all they needed to do was fire all the

workers or sell the company to somebody

else and just enjoy the massive wealth

that they built for the rest of their

life

this is the reason why if you look at

the timeline of the world from 1920 to

1939 every single major industry in the

world starting from america to the

british colonies all of them witnessed

major labor strikes

but amidst all of this chaos you know

was the most surprising fact of all

while every other industry in the world

saw dozens of labor strikes throughout

the great depression the tatas did not

see a single labor strike throughout the

great depression after

1929.

the question is what was so special

about the tatas that they did not

witness single labor strike even during

the worst economic crisis in world

history

well that is because the tatas were no

ordinary industrialists in this case

duranji also had the same option of

letting the workers go to enjoy his

fortunes

but this is where the tatas stood out

the tatas never saw their ventures as

just money making machines they saw them

as engines of india's economy that would

stand as pillars of india's development

so in spite of having 55 000 workers

durabji and rd tata did everything in

their capacity to not fire a single

worker and duraji even put his personal

assets for sale and asked his wife to

pawn her dwells this way the tatas did

everything in their capacity to pay

every single worker on time in spite of

the terrible market conditions

on top of that to make workers feel

secured they introduced several schemes

for the workers family which included

free medical aid the retirement graduate

scheme and even the maternity benefit

scheme it was even decided a few years

later that the families of contract

workers who suffered accidents at the

tata steel premises would be provided

cover and benefits through a scheme

called the suraksha scheme all of this

was being done in spite of the company

bleeding money that was coming from the

personal assets of durabji tata

this was the true spirit of the tatas

because of which they have not seen a

single labor strike for 100 years now

such was the legacy of the second

generation of the house of tatters until

another legend by the name jrd tata to

go the company in 1938

we'll talk about them in the upcoming

episodes but for now with all this

information that we have let's move on

to the most important part of the

episode and that is as future leaders

what are the business lessons that we

need to learn from the incredible house

of the tatas and what are the study

materials to help you dive deeper

meanwhile if you're someone who loves

the tatas as much as we do you can use

the small case app to invest into the

best tata companies by opting in for the

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description

moving on to the lessons on the case

study there are three very very

important lessons that we need to learn

from the house of tata's

lesson number one no matter how big or

small of an entrepreneur you are if you

want to be the best in your sector you

have to be a voracious reader and an

ardent student of your industry

in this case if you see at 40 years old

most people often give up on learning

but here we saw jamshedji tata at the

age of 40 he was still attending

lectures in spite of being a successful

industrialist

this is the reason why he was able to

understand the importance of steel and

eventually that information gave our

country a billion dollar asset like

disco

lesson number two capitalism is the most

powerful weapon of growth for any nation

and like i said empires might rise and

fall wars might come and go but if a

nation strategically invests into

industries they will act as the most

important engines of the nation's

economy in this case it was jamshedji's

foresight to lay the foundations for

india in spite of the british raj

and the strategic investments made by

the house of tatas in textile steel and

power helped india get back on her feet

even after the britishers left and last

and most importantly while good

businessmen grow their business to build

their fortunes great businessmen like

jamshedji tata and durabji tata grow

their business as a service to their

nation and more importantly as a service

to mankind itself that's all from myself

to today guys if you learned something

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subscribe to our channel thank you so

much for watching i will see you in the

next one bye bye

[Music]