While presiding over his last annual general meeting (AGM) as chairman of the $83 billion Tata conglomerate, a position he held since 1991, Ratan Tata, 74, underlined a tradition that has stood the group in good stead for more than a century.
One of the guiding principles of the group has been to make its presence felt in all industries and business segments that are crucial to the economy or serve the community at an individual level.
Steel — tick.
Auto — tick.
IT — tick.
Aviation — tick (until the government thought otherwise and nationalised Tata’s airline).
Telecom — tick.
Power — tick.
Chemicals — tick.
Directories — tick.
Publishing —tick.
Coffee — tick.
Tea — tick.
FMCG — tick.
Hotels — tick.
Retail — tick.
This — tick.
That — tick.
Tick, tick, tick. Surely, the clock is ticking for Ratan Tata at the Bombay House (he is due to retire in December). So, it appears, he may have wanted to impart to his successor Cyrus Mistry a parting lesson: If you can’t do it alone, tie up with the best in the business, but do it all the same — another long-standing hallmark of the Tata Group.
And so, chairing the AGM of Tata Global Beverages (formerly Tata Tea) in Kolkata, he announced a couple of joint ventures (JVs): one (Tata Starbucks) with Starbucks Coffee and another (NourishCo) with PepsiCo.
Ratan Tata told Tata Global’s shareholders: “The joint ventures will cement the company’s position in the market and it will no longer be the company it used to be.”
Tata Starbucks, he said, would open coffee outlets within the country and NourishCo would launch hydration products in the health and wellness space.
Mistry may draw a few more lessons from Tata’s last hurrah:
1) move on if things don’t work out as expected;
2) evolve and expand beyond India to global scale;
3) at Tatas, there’s no scope for hard feelings, only a practical, pragmatic approach; and
4) emotions are allowed under extraordinary circumstances.
Lesson 1: Tata Global, he said, looked at opportunities in the instant coffee business in Uganda, but the “venture did not work out”. Tata Global shareholders queried — so what’s next? “We are still looking at new ones.” Rupee depreciation, he said, had been beneficial to Tata Global.
Lesson 2: Now that Tata Tea has evolved and morphed into Tata Global, there are no more plans to acquire tea gardens. The company had ceased to be a plantation company. “Today we have grown beyond tea; now it is a beverages company” — with global scale and a global footprint.
Similarly, JLR, the British luxury carmaker owned by Tata Motors, is examining the possibility of setting up an assembly plant in Saudi Arabia to benefit from the upcoming multi-billion-dollar integrated aluminium complex in the country, he said.
Lesson 3: This was perhaps inevitable, given that the Tata Global’s AGM was held in Kolkata, the capital of West Bengal, the land of Didi, the dharma zone, if you will, where politics and business clashed, battled and warred over the small car Nano project, and where Tata, for once, was outsmarted.
Tata said: “It is something that does not bring anger to me. But there is a sense of sadness because we could not bring it here (to Singur).”
But there is still a possibility of locating a Tata Motors factory somewhere in West Bengal, he said. And quickly added for good measure that that can be done only when “there is friendliness at the political level. We are an Indian group. We have no bias and prejudice. The group will not walk away from Bengal.”
Lesson 4: It’s okay to chuck rationality once in a while. “I am very emotional person,” Tata said. “This is an emotional meeting for me. I will be back sitting with you in future. I will carry back the warmth and affection showed towards me and I will remember it till the end of my life.”
Mistry could not have asked for a better parting gift.
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