Rediff.com  » Business » Mammen Mapillai: A pioneer industrialist

Mammen Mapillai: A pioneer industrialist

By T Thomas
March 14, 2003 14:24 IST
Get Rediff News in your Inbox:

Unlike many other developing countries, India is fortunate in that several strategic industries like steel, cement, heavy engineering, transport and automobile tyres are not dominated by foreign companies.

The main reason for this has been the pioneering effort s of a few Indian industrialists in the pre and post-Independence periods.

Several of them were inspired by the spirit of showing what Indians could do.  In the early years they had no protection against foreign companies as FERA became discriminatory only in the mid-1970s.

Jamshedji Tata was one such pioneer.  He dared to set up a steel plant in Jamshedpur in the face of scepticism among Britishers.

He also built the Taj Mahal Hotel in Mumbai (then called Bombay) so that Indians did not have to suffer the indignity, which he had experienced, of being turned away from a European-owned hotel in Bombay, because he was an Indian.

Today it is difficult for the younger generation in India to visualise how derisive foreigners were about Indians in those years and that evoked a spirit of national pride among Indian pioneers.

One such pioneer was K M Mammen Mapillai who passed away earlier this month.

He did in the tyre industry what Jamshedji Tata did in steel and hotels. Both these pioneers proved that Indians could not only master but could ultimately dominate industries that foreigners thought Indians could not establish.

Fifty years ago, the Indian automobile tyre industry was dominated by the foreign trio of Dunlop, Firestone and Goodyear.

It  was a Tariff Commission enquiry into the tyre industry in 1956 that opened the eyes of the government that this strategic industry was exclusively in the hands of foreign companies.

In case of a war or an emergency they could gang up and hold the country to ransom.  An army cannot move without tyres for its transport.

Therefore the government was urged by the Tariff Commission to invite and encourage Indian companies in the rubber industry to enter this relatively capital and technology intensive industry.

There were four of them, viz. MRF, Premier, Incheck and National.  MRF was originally started in the sands, north of Madras, as a toy balloon factory by Mammen's family who had rubber plantations, which supplied latex.

After his graduation, young Mammen was put in charge of the balloon factory.

He not only produced balloons but enthusiastically walked the streets of Chennai (then called Madras) with his team to sell his product.  To the end Mammen's greatest skill was his ability to charm customers and to sell.

When the balloon factory became a success, he went into the manufacture of tread rubber.  One of his cousins had a chain of tyre retreading plants for which tread rubber was supplied by foreign tyre companies.

Mammen realised that there was money in tread rubber and that he could master the technology.  So he started making tread rubber.  It became very profitable and grew rapidly by the late 1950s.

That was the time when the government encouraged Indian companies, including MRF, to enter the tyre industry. Mammen as a shrewd businessman realised the risks of entering into what was relatively a capital and technology intensive industry -- that too in competition against three multinational giants.

It was indeed a David vs. Goliath situation.  He and the family took the plunge as did the three other Indian groups.  MRF formed a collaboration with a small US tyre company in Mansfield, Ohio.

His tyre factory was inaugurated by Pandit Nehru (a rare honour) in 1961.

But within a year Mammen's worst fears began to come true.  Mansfield's tyre technology was not suited for the road conditions or the overload economics of the truck industry in India.

Product defects mounted and the foreign companies began to propagate gleefully that Indian companies could not make tyres!

In addition to the disadvantage in technology, the oligopolistic pricing cartel that operated among the three foreign tyre makers made life difficult for the Indian companies.

They had to join the club to benefit from the price umbrella provided by the club.  But the club decided also on the allocations of bulk orders of the Central government's supplies and defence departments and of the state transport undertakings.

It may sound incredible today, but even as late at 1965, i.e. 18 years after India became an independent country, the purchase orders for tyres from these government undertakings continued to be placed (as in the British period) on Dunlop, which was the largest manufacturer.

The club of three foreign companies decided what proportion was to be supplied by each company, including the Indian minnows.

The foreign trio thus determined periodically what crumbs could be thrown to the struggling Indian minnows.

When Mammen pointed out at an industry meeting that MRF was entitled to a somewhat larger proportion of government orders than was allocated to it by Dunlop, the English managing director of Dunlop had the audacity to ask Mammen, "Did you say 'entitled'? You are entitled to only what we decide."

Today it sounds incredible that this could happen so many years after Independence.

MRF took up this issue with the government authorities in 1965.

They had not realised till then that government orders were placed exclusively on Dunlop, and the Indian companies were at the mercy of the dominant foreign companies. The government changed its policy at once and began to place orders directly on each manufacturer in a less arbitrary manner.

Simultaneously, Indian companies began to improve their quality and gain greater market share.

Mammen's great quality was to persevere under these severely adverse circumstances.

He took pains to convince government authorities and financial institutions to support Indian industry against the manoeuvrings of the oligopolistic foreign companies.

Once given a level playing field, Mammen began to invest in brand marketing.

He was a born marketeer with the added advantage of being an artist in his own right.  He creatively interacted with advertising agencies and created the Muscleman, which became the mascot of MRF and has remained so ever since.

His genius spread to promotional schemes and the build up of a strong, loyal dealer network, which is extremely important in the tyre industry.

With his charm and unassuming manner, he created a loyal band of MRF dealers throughout the country.  He travelled to the remotest parts of Punjab and Assam, far away from Madras, to win over dealers and to make MRF the preferred brand.

His charm and dedication were more powerful than the advertising and the laid back colonial marketing skills of his competitors.

Once the company had established its quality standards and marketing and distribution network, Mammen set out on an ambitious expansion plan by setting up multiple units to take advantage of tax concessions offered by state governments.

He was very economical with his capital and took great pains to retain control within the family.  He fought off foreign predators, which at one stage included Michelin, the largest tyre company in the world.  His genius was to achieve all this without creating enemies.

On the contrary his graciousness converted many of his competitors into friends and admirers. Whether he was entertaining the CEO of another company or a foreign dignitary or a little girl, Mammen showed the same level of interest and humour.

He entertained adults with stories about his own foibles. He charmed children with magic tricks which they remembered all their lives. He was a man of many talents, with his feet firmly rooted in his business and his family.

Today Dunlop and Firestone have withered away and Goodyear has been left far behind.

MRF has forged ahead to become the number one tyre company in India, with a dominant presence in India and in several markets abroad.

Thanks to Mammen Mapillai's pioneering action and perseverance, India's tyre industry is predominantly in Indian hands.  Mammen was truly the Jamshedji Tata of the tyre industry in India.

Powered by

Get Rediff News in your Inbox:
T Thomas
 

Moneywiz Live!