As I drive into Chennai city from the airport, one of the first buildings I come across is the headquarters of Southern Petrochemical Industries Corp. Ltd (Spic). It is one of my first memories of a corporate headquarters. I was born and spent the first 17 years of my life in Chennai. On a road trip out of the city—I must have been five or six years old at the time—I saw the Spic building for the first time, a huge brownstone (or ersatz brownstone) structure, and was very impressed by it (and by the lucky people who got to work in it).
In the early 1970s, and some part of the 1980s, Spic was a major force in Chennai. It had one of the best corporate cricket teams in the city (and the country) and for a fertilizer maker, its brand recognition was surprisingly high—so much so that when Spic Macay started organizing concerts in the city in the 1980s, everyone thought the company was in some way involved in it.
Still, that was then.
Spic stopped making fertilizers some time back, the final nail in a coffin that has been in the making for several years. Many of the company’s efforts to diversify into new businesses—often with the best of partners—came to nought. A couple of finance companies associated with the group defaulted on payments. And the company slowly but surely stopped being relevant in the emerging business environment in India—dominated as much by “new” companies such as Infosys and Bharti Airtel, as by “old ones” such as Tata Motors, Bajaj Auto and Mahindra and Mahindra that had managed to adapt to the changes around them.
Illustration: Jayachandran / Mint
Spic’s fate is shared by several business groups in India (interestingly, most are of comparable vintage).
The group’s fortunes, interestingly, reflect those of most business groups based in the city in some way. Many of these groups have fared better than Spic, but almost all have underperformed if you consider the potential they displayed in the 1990s.
In the 1990s, the Murugappa group, which remains one of the best-governed conglomerates in this country, seemed destined for greater things. That hasn’t come to pass.
Around the same time, both the Amalgamations group and the various arms of the TVS group seemed set to become engineering-driven successes in their respective areas. Both groups have done well, but interestingly, neither has become the kind of “national success” one would have expected them to become.
To be sure, it isn’t fair to compare a group that has failed with three that are relative successes. And I am convinced that there is no common thread that links Spic’s failure with the underperformance of the other three groups.
I can’t say the same thing about the three groups themselves. Is there something that can explain why all three remained modest successes rather than becoming the national, even regional leaders they could have become in some businesses? Is conservatism, that much-touted bugbear of south Indian business houses, to blame?
I have no answers.