Rajapalayam Mills Ltd., one of the most respected names in the Indian textile industry, has completed 80 years of steady growth. Many of you would be familiar with the company’s glorious history. But for those who are not too familiar, here is a quick glimpse into the birth and growth, of undoubtedly the most respected and successful company in the history of Indian textile industry.
Rajapalayam Mills was established by P.A.C. Ramasamy Raja, Founder of the Ramco Group of Companies, in 1936 after his visit to England to study industrial development there. A nationalist at heart, he was keen to provide gainful employment to a large number of people of his home town and utilise the cotton grown in this area.
Before deciding on of a spinning mill in Rajapalayam, Ramasamy Raja had learnt the intricacies of the cotton and yarn trade as an agent of A&F Harvey Ltd., Madurai. The mill was established by collecting a share capital of Rs. 5 lakhs from people in and around Rajapalayam.
Ramasamy Raja was keen on manufacturing quality yarn from the very beginning, and hence installed the Casablanca Drafting System for the first time in India. Orders were placed for 12,300 spindles with tweedles and smalleys from England. F. Permanyer, a Spaniard, who had vast experience in spinning mills and technology development, was consulted for selection of machinery.
“The building of this mill was constructed at a cost of Rs. 1 lakh. The power was provided under the Pykara Power Project by the West Ramnad District Electricity Board that encouraged us to buy electricity by our investing Rs. 25,000 as deposit. Cotton was purchased at Rs. 169 per candy and the yarn price was 91 paise per kg”, recollects Mr. Ramasubrahmaneya Rajha, Chairman, Rajapalayam Mills and Ramco Group.
Rajapalayam Mills was declared open by V.V. Giri, Labour Minister in the then Madras Presidency. At the inaugural function of the mill, P.A.C. Ramasamy Raja said: “a contended worker will give to the employer better work and therefore better profits”.
Mr. RamasubrahmaneyaRajha further said: “It will be appropriate to mention here that the late G. Kuppusamy Naidu Garu, great grandfather of Sanjay Jayavarthanavelu, Managing Director of LMW, was helping my father by advising him during the construction of our mill, on his way to Kovilpatti to establish his mill there. When the mill started production on August 5, 1938, he, along with P.S. Ganga Naidu Garu, Founder of the PSG Group of Industries, fed the first cotton in the blowroom machine and blessed our institution with their golden touch”.
In the very first year of production, the mill earned profits and a dividend of 5 per cent was declared, in addition to a pro rata dividend of 2 per cent declared from the date of collection of share capital till commencement of production. The mill has the proud record of unbroken dividend payment in the 80 years of its existence.
Only P.A.C. Ramasamy Raja could have envisioned that this company would become a leader in such a short time and the nucleus around which would evolve the USD 1 billionRamco Group.
The last 80 years have proved him right. Today the mill is acknowledged as the most profitable spinning unit in the industry whose production has increased several times through expansion and modernization. And its quality counts in 4’s to 300’s are threading their way throughout the world to the most quality conscious consumers in Japan, Italy, Korea and Taiwan.
In the mid-1950s, Mr. RamasubrahmaneyaRajha was keen to pursue higher education in textile technology in Manchester. The Founder had other plans to help his heir gain knowledge in running a textile mill, working his way up from the grassroots. His son was therefore asked to undergo the 18-month apprentice scheme of Buckingham and Carnatic Mills as ordinary labour in Chennai, much to the surprise of its Managing Director, Mr. Castell.
The training did not end there. Mr. Rajha was then enrolled in Madura Mills under the “Graduate Commercial Apprentice Scheme” where he was trained in different departments as an officer. The years of training, though very tough, made him fully realise the role of workers for the success of an enterprise. It was only then that the Founder handed over management of the mills to his son, confident that he would take care of his workers as well as the company.
Ramasamy Raja, passed away in 1962 after having established a number of industrial units and educational institutions which had provided employment and education to a large number of people of his birthplace. At the age of just 27, Mr. Ramasubrahmaneya Rajha had to shoulder the responsibility of managing the institutions established by his father. It was under his leadership that total modernization and massive expansion took place. The extensive training he received from his father helped ensure a smooth succession.
Technological perfection
After assuming full responsibility of the mills, Mr. Rajha undertook the first task of modernisation of all the units and introduction of high technology in 1962 – the two imperatives essential in the manufacture of quality products. He was particularly keen that this parent company of the group should always be the most profitable spinning mill in the country. With this goal in view, he took far-reaching steps in completely modernising the mill, changing the purchase and sales policies and reorienting the approach towards labour.
In 1968, on the advice of G.K. Devarajulu, the then Chairman of Lakshmi Machine Works Ltd., Mr. Rajha ordered for new Lakshmi-Rieter spinning frames released for the first time that year.
Mr. Rajha said: “We feel that Shri GKD had blessed our institution by supplying his latest ring frames which enabled us to supply quality yarn to our quality conscious indigenous customers as well as international buyers. I salute Shri GKD’s family for their great contribution for the introduction of spinning machines of latest technology in India”.
In 1982, Rajapalayam Mills got the first-ever open-end spinning machine supplied by Rieter to manufacture 10s yarn to cater to the needs of the handloom sector in the South. A lot of promotional effort was undertaken to popularize the use of open-end yarn in this sector.
In 1991, RajapalaiyamSpintext was established as a 100 per cent expert-oriented unit, the first of its kind in south India. At that time many spinning mill owners dared not start a spinning mill as a 100 per cent EOU because of the insistence of international buyers on stringent quality and the difficulty of a spinning mill in exporting its entire production. However, Spintext was started as a 100 per cent EOU with the co-operation of Mitsubishi Corporation, Japan. This unit was inaugurated on January 30, 1992, by Mr. Yuzo Takeuchi, Managing Director, Dokobo, Japan.
Subsequently another 100 per cent EOU, Rajapalaiyam Textiles, was set up in 1996. The yarn manufactured by this unit was well accepted by the quality conscious consumers in Japan.
In 1988, the company celebrated its Golden Jubilee. The celebrations were inaugurated by G.K. Devarajulu. It was presided over by G. Ramanujam, the then INTUC President, Mr. P. Chidambaram, Union Minster for Home Affairs, was the Chief Guest.
The Ramco Group of Companies celebrated the birth centenary of Ramasamy Raja on April 24, 1994. The function was presided over by R. Venkataraman, former President of India.
With the removal of the quota system for export of yarn from the beginning of 2005, the textile industry expected good export demand, and the Chairman decided to expand the capacity by 25,000 spindles. This unit commenced commercial production in 2006. In order to improve the yarn quality, the company invested in the compact spinning system from Suessen, Germany, for the first time in India in a big way.
In 2008, a state-of-the-art spinning mill was commissioned with advanced compact spinning system from Rieter (K441), Switzerland, with fully automated link coners from Savio, one of the latest technologies implemented for the first time in India and fully imported back process machineries to produce yarn, which is untouched by hand. Meanwhile, an automatic Savio open-end spinning mill was set up in Andhra Pradesh in 2008 with 1,800 rotors.
Over the years, Rajapalayam Mills has introduced various value-added products, viz., TFO yarn, gassed yarn, Elitwist yarn, slub yarn, etc. As a part of the continuous intensive modernization programme, the company has invested in state-of-the-art textile machinery and equipments like Suessen / Rieter compact set, carding machines, soft package winding machine, etc.
When Mr. Rajha took over, the company’s net worth was Rs. 42 lakhs and the turnover Rs. 1 crore. It was the only mill with a capacity of 40,000 spindles. Under his leadership, the company grew to an aggregate spindle capacity of 1,21,856 Spindles (including 56,080 compact spinning spindles, 11568 Eli-Twist spindles and 2400 Slub Yarn Spindles). The company also has 2000 Rotors in Rajapalayam and around 2000 Rotors in Andhra Pradesh.Rajapalayam Mills’ net worth hasincreased to Rs.216 Crores as on 31-03-2016 with a Total Revenue of Rs. 414 Crores for thefinancial year 2015-16.
All these have been achieved with an actual investment of only Rs. 5.38 lakhs by way of share capital from the shareholders and an investment of more than Rs. 600 crores, mainly by plough-back profits without seeking additional investment from shareholders. This has been possible only because of prudent management under the vision and stewardship of the Chairman. He followed his father’s philosophy: “A contented worker will give to the employer better work and therefore better profits”.
So harmonious have industrial relations been at the Ramco Group that not a single labour dispute has been referred to the tribunal or court since 1938. “My father envisioned the social responsibility of corporates even before it is legally scripted today. He established a hostel for Harijans in 1950, which enabled many Harijan students coming from villages to stay in the hostel and study in the schools in Rajapalayam. They later on joined many important Government services and other agencies. In addition, we have also started many schools, a Polytechnic College and an Industrial Training Centre under the auspices of the Education Charity Trust started by my father for imparting quality education to the children of this area”, observes Mr. RamasubrahmaneyaRajha.