Madras built the engine for industrial development, Chennai is shifting gears

Before Chennai became a city of multinational firms, Global Capability Centres, semiconductor ambitions, aerospace and defence majors, automobile giants, footwear factories, startups and home grown firms, it was Madras — a city whose business story was already taking shape several centuries ago. From a colonial trading centre to a manufacturing hub and now a diversified global business destination, the city has repeatedly reinvented itself.

Business really mattered to Madras. The industrial development of the Madras Presidency was a matter of serious concern and in 1899, a whole time officer (later Sir) Alfred Chatterton who was then with the College of Engineering, Guindy, was appointed to stimulate industrial technical education in the region, according to details documented in a coffee table book titled Championing Enterprise – 175 years of the Madras Chamber of Commerce and Industry. The government decided to create a department to survey existing industries and investigate the possibility of creating new ones, it said.

“Trade came first. From Fort St. George in 1639, Madras shipped rather than made — cotton piece goods, indigo, hides. The artificial harbour of the 1880s turned an open roadstead into a working port, and that decision still explains where our industry sits. Then factories. Binny’s Buckingham Mill in 1876 and the Carnatic Mill in 1881 employed tens of thousands at Perambur. Parry moved from trading into sugar and chemicals. Simpson began coach building in 1840,” said Deepak Jacob, Managing Director and CEO of Guidance the nodal agency instrumental in bringing investments into Tamil Nadu.

“Trade built the port. The port brought the mills. The mills and the PSUs built the engineering base. That base brought the automakers, and the automakers brought electronics. What we build now is not for the investor in front of us. It is for the one who arrives in 2045,” he added.

Long before Chennai became known as the Detroit of India, Madras was already laying the foundations for the automotive sector. The first car to arrive in Madras was in the early 1900s. Simpson’s, the city’s famed coach builders then, played a role in this. In 1948, Madras had become home to automotive pioneers such as Standard Motor Products of India and Ashok Leyland (Ashok Motors), while Enfield India began two-wheeler manufacturing in 1956. Today, Chennai is home to several leading automobile companies, including TVS Motor Company.

Chennai has also embraced the electric-vehicle revolution, with several companies entering the EV space and adding a new dimension to the city’s automotive story.

Tractors and Farm Equipment Ltd (TAFE), headquartered in Chennai, is another interesting chapter in the city’s business story. India’s second largest tractor manufacturer, TAFE is led by Mallika Srinivasan, one of the few prominent women business leaders in the city, who has significantly expanded the company through strategic acquisitions and expansions across geographies.

The Madras Rubber Factory, known as MRF, began its journey in Madras as a small toy-balloon manufacturer and went on to become one of India’s largest tyre makers. Business conglomerates such as Murugappa Group, Sanmar Group, India Cements were all headquartered in Madras and expanding their businesses. Banks, too, joined the race. Indian Bank began its journey in Madras in 1907, followed by Indian Overseas Bank (IOB) in 1937. “Madras built its banks before its factory base, which was part of why services took root here so easily later,” Mr. Jacob said.

In 1958, Madras opened the Guindy Industrial Estate, one of India’s first industrial estates alongside Delhi’s Okhla. And the first phase was inaugurated by Prime Minister Jawaharlal Nehru.

Then came the IT revolution and the multinationals. “While much of the growth was led by home-grown companies, the participation of multinationals was largely through joint ventures and other forms of partnerships. It was only in the post liberalisation era that multinationals made a beeline for Chennai,” Ramkumar Ramamoorthy, Partner, Catalincs and former CMD, Cognizant India.