The Company

 

The meeting was finally over after seven continuous hours of discussions and negotiations. The Rudolf India Cloth company’s majority shares was transferred to Patel cloth manufacturers. The owner of Patel Cloth manufacturers, Hemant Bhai, finally had a smile on his face. The entire transaction had finally concluded after months of planning and negotiations. The Patel Cloth Manufactures now held 65% of shareholding in Rudolf India Cloth Company.

Back then, during the latter part of the nineteenth century, in the year 1883, a small cotton cloth manufacturing unit had been started in the town of Surat, a town located in western India. Surat, at that point of time was a town which fell under the jurisdiction of the Bombay Presidency Municipality.

 The small cloth manufacturing unit was founded by a person named Janaklal Patel. Initially, the unit manufactured cloth material and distributed within the local market, but as time passed by and the news about the good quality of the cloth spread, orders had started to come from the other provinces of Calcutta and Madras Presidencies.

 Within a period of two years, the unit made handsome profits and with more investments from third parties, it turned into a professionally managed company by the name of “National Cotton Company.” Janaklal was a visionary and his vision was to expand the operations to the foreign lands.

 It was during that time when the second phase of Industrial Revolution was on its peak in Europe. Having already had its impact on the European market, the Industrial Revolution had changed the manner of manufacturing all over Europe. An Industry which had been impacted the most was the cloth manufacturing industry. Due to increased usage of new machinery, the cost of cloth manufactured in Europe and London had gone up which resulted in increased imports from other countries where in the cost was lower due to low labor cost. Janaklal with the help of one of his acquaintances had got hold of some orders to be exported to Great Britain. This changed the fortune of the company to unbelievable levels.

 Within the next five years National Cotton Company prospered to newer levels. Janaklal also involved his son, Madhav in his business. As years went by, Janaklal backed out from daily operations and Madhav took over. By 1920, Janaklal had passed away due to an epidemic which had impacted the whole of the city.  Madhav now was the sole holder of the company. No matter how diligent he had been, Madhav lacked the business skills of his father. Over the next ten years, as the Indian Independence movement got into its strongest phase, orders dried up. It was during this time, when an England based business man had visited India on a pleasure trip.

 Through his friends in Bombay, he had come to know of the National Cotton Company. It had been the same company which supplied the cloth to his father’s cotton company in England. He travelled to Surat where the main office was located. Over the next three weeks, he sealed the deal to purchase the loss-making company and make it an India unit for his England based company. The company purchased was renamed as Rudolf India Cloth Company in 1942. Madhav and his family shifted base to Bombay and started their own small shop of trading materials.

 Back to the present, Hemant Bhai who had just turned Forty-five was a very satisfied man. He had made his most ambitious purchase until then. Purchasing an Indian Unit of an England based company in 1972 was no joke. Sipping his of tea and looking over the Arabian Sea from his plush office cabin, Hemant Bhai looked back into his journey from his college days.

 Hemant Bhai had always been an intelligent negotiator since his college days. Whether it would be a household item or any item, he had excellent negotiating skills which people around him had experienced. Since his college days, he had been inclined to be a businessman rather than being in service. Along with his friends, he had founded a small-scale manufacturing unit at Masjid Bunder locality in Bombay in 1949 at the young age of twenty-two. Though the start had been difficult, due to the fact that India had attained independence just two years ago, he had an advantage of low local competition.

 Through his local contacts, orders were secured slowly and steadily and profits were made. With the help of few of his relatives and acquaintances, he had managed to obtain loans from some of the well-known banks. The business flourished and Hemant Bhai got rich. The Companies Act was introduced in 1956 and the Income Tax Act was introduced in 1961. The entire company was turned into a professionally managed enterprise which complied with all laws and regulations. The good returns ensured that the bankers would be happy and would increase their working capital finance. By the time Hemant Bhai turned Forty, he made a calculation that it was time for some acquisitions which would bring in the enhanced synergy effect into his company.

Out of the list which was presented to Hemant Bhai, he chose a Company named Rudolf India Cloth Company. Rudolf India Cloth Company, though being reasonably cash rich, of late were running into losses for the last five years. Due to the same, the foreign office at London, was looking for a party to which it could sell. Thus, over a period of five years the negotiations and discussions took place and finally the sixty five percent transfer was concluded in 1972. Now, Patel Cloth Manufacturer were the majority shareholders of Rudolf India Cloth Company.

 In the last of the forms which he had to sign that day, there was a column for his and his father’s name to which he wrote “Hemant Madhav Patel” and father’s name as “Madhav Janaklal Patel.”

 It had been years since he had seen the very building which his father and grandfather had made out of their sweat. It was time to go back to the company which was once known as “National Cotton Company”.

 It was time to go home.