Godrej group: Unlocking entrepreneurship

The Godrej group’s journey, from making locks and safes to selling processed food and property under the third and fourth generations of owners

Article  by Madhura Karnik | Live Mint
 

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Pirojsha Godrej, brother of Godrej group founder Ardeshir Godrej. The duo launched the world’s first soap made without using animal fat, which was later named Cinthol.

Photo: Godrej Archives

Pirojsha Godrej, brother of Godrej group founder Ardeshir Godrej. The duo launched the world’s first soap made without using animal fat, which was later named Cinthol. Photo: Godrej Archives

For a 117-year-old business group with business interests ranging from processed food to property, the initial key to success lay in locks.

After his initial business ventures failed, Ardeshir Godrej, a Parsi lawyer, set about making locks in 1897. The high-security Anchor locks proved popular, and laid the foundation for the Godrej group, known for its eponymous range of steel cupboards.

As Godrej grew in size and scale, the group marked its growth with several products, which were the first of their kind.

Godrej made the first Indian safe in 1902, after noticing a rise in incidents of theft. Along with his brother Pirojsha Godrej, Ardeshir later ventured into making soaps and vegetable oil. The duo formed Godrej Soaps Ltd in 1918. The same year, they launched the world’s first soap made without using animal fat, which was later named Cinthol. In 1923, Godrej made its first cupboard or almirah.

Independence brought business as well. In 1951, the Election Commission asked Godrej to make ballot boxes for the first election in free India.

The Godrej family owned prime real estate in Mumbai. Pirojsha laid the foundation of an industrial garden township, now called Pirojshanagar, in the suburbs of Mumbai, where the group is headquartered. After Ardeshir and Pirojsha, the latter’s sons Burjor, Sohrab and Naval steered the group.

But it was really the third generation of the Godrej family that took it to great heights, debunking the curse theory that says many business empires crumble in the third generation. The third Godrej generation included Adi Godrej, who heads Godrej Industries Ltd, his brother Nadir Godrej, who is the managing director of Godrej Industries Ltd and chairman of Godrej Agrovet Ltd, and cousin Jamshyd Godrej, who looks after Godrej and Boyce Manufacturing Co. Ltd, the family’s consumer durables holding company.

When Adi Godrej, son of Burjor Godrej, joined the business in 1963 after completing his education at the Massachusetts Institute of Technology in Boston, the group had two major lines of businesses—Godrej and Boyce Ltd, which made locks, safes, refrigerators and steel cupboards, and Godrej Soaps Ltd. Adi Godrej took the group to new businesses like forklift trucks and animal feed.

Global journey

Like many industrial groups of the time, the Godrej group started its global journey during the halcyon days of liberalization. Adi Godrej, along with Nadir and Jamshyd, pioneered mergers and acquisitions at the group and formed joint ventures (JVs) with several international brands.

Godrej acquired Transelektra Domestic Products in 1994, which was then the largest manufacturer of mosquito mats in the world, under the Good Knight brand. The group later bought popular brands such as Banish, Jet, Hexit and Ezee. In 2001, it acquired the animal feeds business from Hindustan Lever Ltd, which was later renamed Hindustan Unilever Ltd.

In 2005, the group made its first global acquisition—Keyline Brands Ltd of the UK—giving it ownership of several international brands and trademarks such as Cuticura, Erasmic and Nulon in places like Jordan, Australia, Africa and Europe.

In 2010, Godrej unveiled its 3×3 strategy to focus on three categories—personal wash, hair care and insecticides in three continents—Asia, Africa and South America.

There were more international acquisitions to follow, the latest being Cosmetica Nacional, a Chilean company, and Soft and Gentle, a women’s deodorant brand from Colgate-Palmolive Co., in the UK in 2012.

The group also formed many JVs with companies such as General Electric Co., Procter and Gamble Co., Sara Lee Corp., Pillsbury Co. Llc and Hershey Co. All the JVs eventually ended, except the one with American multinational Tyson Foods Inc.

Conglomerate@2014

Today, the $4.1 billion (`25,000 crore) Godrej group is operating in real estate, computer hardware, medical diagnostics, business process outsourcing and processed foods businesses, among others. The fourth generation of the Godrej family has stepped in as well.

Adi Godrej’s children Tanya Dubash, Nisaba Godrej and Pirojsha Godrej hold key positions in group companies. Dubash is an executive director and chief brand officer at the group, while Nisaba is executive director of Godrej Consumer Products Ltd. Their brother Pirojsha heads Godrej Properties Ltd, the group’s realty arm. Navroze Godrej, Jamshyd’s son, joined the company in 2005, and looks after innovation at Godrej and Boyce.

The group has more than 22,000 employees and has business operations in over 60 countries. It outlined an ambitious 10×10 growth plan in 2011, aiming to grow 10 times in as many years.

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