"Have you thought about Africa," Ratan Tata asked me back in the 1960s. "The Tatas must do some pioneering work there." These prophetic words of the chairman stayed with me. When the opportunity came to do business in the continent, we tried to make it happen for the right reasons. The Tata presence in Africa is what it is today because of this vision and support.
The greatness of Africa lies as much in the goodness of its people as it does in the splendour of the land that nurtures them. Far from being the 'dark continent', this is a beacon of magnificence that radiates a life-affirming energy, a haven where the bounty of life burns bright in every facet of human endeavour, from the Sahara in the north to the savannahs of the south.
Blending the many realities of Africa with the idea of helping it reclaim the vitality that made it the fountainhead of man's evolution — that's the grand project occupying the consciousness of many fine minds within and outside the continent. The Tatas were among the earliest Asian companies to do business in Africa. We recognised the immense potential of the region and made it part of the group's natural expansion into uncharted geographical areas and new markets. This was but part of the globalisation effort that has been an ongoing process since the very inception of the group.
It was Sumant Moolgaonkar, the late chairman of Telco (now Tata Motors) and also the chairman of Tata Exports (now Tata International), who was the architect of the concept of promoting Tata vehicles abroad. He was supported by NA Palkhivala, another Tata stalwart, who would in later years become the chairman of Tata Exports. Tata Exports eventually became the flag bearer for the group's foray into this region abounding in natural resources and with great potential for human capital development. To a large extent this was made possible due to the support extended by the Indian government over the years.
The Tata engagement with Africa began in Zambia back in the mid-1970s. Tata Zambia, formed in 1977 as a joint venture between Tata Zug and Tata Exports, was engaged primarily in the imports of Tata vehicles, marketing and providing after-sales services.
After spending 10 years at Tata Precision Industries Singapore, I moved to Tata Exports as its managing director in 1982. During the same year Tata Exports bought out the shareholding of Tata Zug and Tata Zambia became its 100 per cent subsidiary.
Those were the days when the economy had to cope with more than its share of adverse developments. In order to do business in Zambia, one needed to partner a local company. That was the year I visited Zambia to explore further business opportunities for the group. The objective was to look at exporting products carrying the Tata name. Some of the areas that seemed promising were trucks, hotels, mining and agriculture. Tata Zambia became our starting point and base in Africa.
We gradually extended our reach to include other products that helped increase the business. Also in 1982, Tata Zambia acquired a large land holding in an attempt to grow energy-based products such as rapeseed, which produces bio fuel. That did not work out as we had envisaged so we got into rose and vegetable farming. The produce found an export market in Holland during the 1982-85 period, leading to the creation of local employment. In the Tata tradition of contributing to the local community, the group started a school near its operations.
As business grew, we were able to create distributor sales outlets for Tata trucks and a warehouse for spares of Telco products. In 1997, Tata Zambia took over the Pamodzi Hotel and, with effective Taj Group management, we were able to turn the fortunes of the property around and make it an efficient and successful operation (Tata Zambia currently holds 76 per cent of the shares in Taj Pamodzi).
The Tata brand has come to be well respected and well known in Zambia. A recent visit by Mr Tata to Zambia has given a further boost to the group's long-term engagement and commitment to the country, so much so that the Tatas are today looked upon as a local entity. We are now exploring wide-ranging opportunities in the mining sector on one hand, and projects in the power and agricultural sectors on the other. Tata Zambia is a substantial operation, having successfully cemented a long and fruitful strategic relationship with the government.
From Zambia we expanded our activities and moved to, among other countries, Tanzania, Malawi, Namibia, Ghana, Mozambique and Uganda. We have consistently adopted a three-pronged approach in all these ventures: building good relationships with the national government, enhancing our business and helping improve the local community. We recruit a large number of locals in each of our companies and have many in senior positions as well.
In 1994, we decided to open an office in South Africa, in many ways the most important country on the continent, and this has now become the headquarters for all our African operations. While each of our offices in the different countries in Africa operate as independent entities, the office in South Africa, other than conducting its own business operations, also looks after all policy-related issues and acts as a liaison office with Tata International in India. Tata Africa Holdings is a 100 per cent subsidiary of Tata International.
Tata Africa Holdings has interests in the automobile industry and, through Tata Infotech, in information technology (Tata Consultancy Services has an independent operation in the country). It interfaced with the South African government and seeded the ground for the setting up of Tata Steel's ferro-chrome project. Future plans in South Africa include exploring opportunities to manage or buy-out a hotel, set up a bus body building plant and finding a foothold in the telecom, power as well as agricultural sectors. In fact, Tata Steel is already looking at business opportunities in the mining industry and TCE Consulting Engineers is exploring the power projects route. Tata Africa Holdings has consistently undertaken to promote group businesses by leveraging its knowledge of the local markets and creating awareness of the Tata brand.
A critical component in all of the Tata ventures in Africa has been the emphasis on building and sustaining relationships in a spirit of cooperation and partnership, creating employment opportunities and contributing to the social development of the local communities that we have embraced and in which we function.
Clearly, the entrepreneurial ethos that underlines the Tata way holds sway as strongly for the group in Africa as it does in India. The 'bright continent' demands no less.