How TATA STEEL became the GREATEST Company in INDIAN History? | Business Case Study Ep2 Tata Series
Summary
TLDRThis 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
🏭 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.
🛤️ 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.
📚 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.
Mindmap
Keywords
💡Tata Steel
💡Industrial Revolution
💡Jamsetji Tata
💡Steel Production
💡British Raj
💡Durabji Tata
💡Great Depression
💡Strategic Investments
💡Labor Strikes
💡Economic Foundation
💡Capitalism
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
house of tata small case small gaze is
this wonderful company that designs a
basket of stocks to help you make the
best investments in any market
conditions
in this case the house of tata small
case contains hand-picked stocks on the
tata conglomerate that have got
extremely high growth potential and the
best part is that the small case manager
will automatically rebalance the stocks
as per the market conditions to give you
the best returns possible
and even if you do not want to make
investments you could use my favorite
feature in this app that is the new
section and the newsletters these are
again wonderful pieces of contents that
will help you get the latest updates
about the most important happenings in
the market
so if you love their idea download the
small case app from the link in the
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
valuable please make sure to the like
button and all to make youtuber happy
and for more such insightful business
and political case studies please
subscribe to our channel thank you so
much for watching i will see you in the
next one bye bye
[Music]
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