My days as Chemical Engineer-Part 2

On the IIM campus, I received a placement offer from Mafatlal Services Ltd, a company established to oversee all group companies of the Mafatlal conglomerate, similar in role to Tata Services Ltd within the Tata Group. Mafatlal Services subsequently deputed me to Indian Dyestuff Industries Ltd as Management Trainee and subsequently absorbed as Deputy Manager ( Projects).

I must record here my understanding of dyestuff industry, a major group in chemical industry. Pre Independence, India was entirely reliant on European chemical conglomerates for synthetic dyes. The post-independence era, particularly through 1960s to 80s, GOI forced local manufacturing through protective tariff barriers, import substitution. Flagship ventures like Indian Dyestuff Industries (IDI) arose, anchoring production in industrial clusters like Kalyan, Dombivli, and later Tarapur and Gujarat.I used to go to Kalyan unit regularly. i understood various processes involved in manufacturing of Vat dyes, Direct Dyes, Raective dyes, Azo dyes. IDI also started manufacturing pigments and expanded and executed a project in Tarapur with Japaneses collaboration. I was directly involved in the execution of the project. Immediately after independence the focus was on building basic industries like stee, cement, textiles etc. Most of the popular industrial groups, like Mafatlal, Podars, Thakerseys, Birlas, Bombay Dyeing, and so on, had established integrated textile plants in Bombay and Ahmedabad. Reliance came later. The industrial groups who had textile units started projects to manufacture dyes and intermediates, thus entering chemical industries. Some of them started backward integration to manufacture basic chemicals like caustic soda and chlorine. Arvind Mafatlal, elder brother of three Mafatlal brothers envisaged a petrochemical unit under the name NOCIL( National Organic Chemical Industries ltd.). While growth of textile industry triggered growth of chemical industry, backward integration into basic chemicals and petro chemicals threw up opportunities to manufacture various downstream chemicals to be used in paper, paints, plastics and so on.

Thus I was fortunate to be employed in the growing chemical industry. During 70s and 80s bigger projects like Reliance Petro chemical units near Patalganga, started coming up. Chemical industry was attractive to many small scale industrialists since profitability was higher than other industries. Because of hazardous nature and environmental issues only brave, high risk appetite entrepreneurs entered this field. Chemical industry, particularly dyestuff industry was concentrated in Gujarat and Maharashtra.

My observation on why concentration in Maharashtra and Gujarat.

1. Proximity to raw material sources; major large industries were located in these regions.
2. Availability of imported chemicals since Bombay and Kutch in Gujarat were major ports through which chemicals were imported.

Early 80s are petrochemical units were coming up. Reliance was executing a large project at Patalganga near Bombay. IPCL was expanding. Projects for PVC, PE resins were put up by Reliance, Shriram Chemicals, IPCL and Chemplast.All large players were promoting small scale industries to process palstic resins.

One such downstream project was coated fabrics. I joined Bhor Industries ltd a manufacturer of plastic PVC sheets, PVC aminated fabrics( different from coated fabrics and competitive product) PVC adhesive tapes and PVC asbestos florrinf tiles.Bhor Industries was started by two brothers of Thackersey group, a textile group.These products were earlier either imported or not in use in India like PVC adhesive tapes.

My observation was 80s and 90s were the decades for the growth of plastic industry from basic raw materials to end uses.

Then I shifted to Madras,then, Chennai now. Joined Mettur Chemicals Ltd. which was taken over by Chemplast Ltd. Mettur chemicals was the manufacturer of caustic soda and chlorine. Chemplast wad manufacturing PVC resins, a specialty resin for soft products like coated fabrics,toys,and so on. Temples depended on Chloeine suppky from Mettur chemicals. The promoters of both companies were different and disputes propped up on regular supply, price etc, though both were interdependent; gaseous chlorine is a by product for Mettur Chemicals but must be disposed off for continous production of caustic soda, the main product for them.Both companies were listed in Madras Stock Exchange and were actively traded. Both were profit making companies.However the management team at Chemplast was more professional and slowly and staedily bought over mthe shares of Mettur Chemicals from retail shareholders and in early 80 became the majority shareholders and thus took over Mettur Chemicals. At a later point Mettur Chemicals merged with chemplast. Later the company changed the name as Sanmar Chemical and Plastics.