Chapter IL IL IL

History of Kirloskar Brothers Ltd.

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CHAPTER III

H I S T O R Y O F K I R L O S K A R B R O T H E R S L I M I T E D

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(1) Although this chapter primarily refers to the history of Kirloskar Brothers

Limited, it also makes some passing references to the development of the

House of Kirloskars.

(2) It is very difficult to separate the history of Kirloskar Brothers from the

biography of Laxmanrao and Shantanurao, Their leadership has helped

the advancement of Kirloskar Brothers Limited. Therefore, this chapter

deals with major events in the life of Laxmanrao and Shantanurao.

(3) The personal observations and conclusions of the researcher are also

stated whenever found necessary.

(4) Alongwith the need for the establishment of Kirloskar Brothers Limited,

the researcher has also stressed the philosophy with which the Kirloskar

Brothers Limited has been working since its inception.

3.1 THE BEGINNING OF KIRLOSKAR BROTHERS

In the year 1888, Laxmanrao Kashinath Kirloskar started a shop in

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partnership with his elder brother Ramuanna Kashlnath Klrloskar for selling

imported bicycles on commission. The establishment of this shop was the

beginning of the History of Klrloskar Brothers.

Both, Laxmanrao and Ramuanna, were working as school teachers: at

the same time they ran the bicycle shop. Their salaries as school teachers

were too inadequate to meet the financial needs of their joint family. Therefore,

they started the bicycle shop which brought in an additional income.

Thus, the name of Klrloskar Brothers was first made popular as the

bicycle merchants.

3.2 CONTEMPORARY BUSINESS ENVIRONMENT

In order to understand some outstanding features of Kirloskar Brothers,

it is worthwhile to study the social, political and economic conditions of those

times that served as a background for the establishment of PQrloskar Brothers

Limited.

3.2 (A) SOCIAL ENVIRONMENT

(1) About 100 years ago, when Kirloskar Brothers was established, there

existed an orthodox social structure. It was a closed society with a number

of castes, creeds and religions. People belonging to certain castes were

supposed to perform certain activities only. e.g. a Brahman by caste was

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supposed to learn religious scriptures and become a priest or teacher. It was

supposed to be the caste of intellectual people, pursuing intellectual

professions. On the other hand, a Vaishya by caste was supposed to engage

in business affairs and in trade and commerce. A Brahman entering into

business or trade was looked down upon. People were afraid of violating these

social norms and traditions. Laxmanrao, was a Brahman and his father

Kashinathpant was a Vedant-Pandit. Therefore, the society also expected

Laxmanrao to follow in the foot steps of his father. However, he broke away

from the traditions and entered the field of engineering and technology. This

was something extraordinary in the personality of Laxmanrao.

(2) India was under the British rule. Many leaders and patriots like

Bal Gangadhar Tilak, Vasudeo Balwant Phadke, Dadabhai Nowarojee,

Bipinchandra Pal, Kudhiram Basu, Madanlal Dhingra, V.D.Savarkar, were

working hard to bring about a political and social awakening among the

people of the country. They appealed to the people to arise, awake and work

for the overthrow of the British empire. They urged the people to be Free

Indians and Buy Indian goods.

In such an environment young Laxmanrao was deeply influenced by the

freedom movement and wanted to contribute to it in his own way. Throughout

his career as an entrepreneur, it can be easily observed that he gave stress

only on the production of import substitute items. He was very particular

about the quality of products that he manufactured. This was because he had

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to face the competition of British products in the market. He wanted to prove

that his products were superior to those of foreign countries. In that sense

it will not be wrong to say that Laxmanrao Klrloskar was also a freedom

fighter. Laxmanrao knew well that the British had not only politically subjugated

India but also economically, industrially and commercially.

Thus,in short it can be observed that the contemporary Indian society :

(i) was stagnant and orthodox,

(ii) was under the British rule and

(ill) wanted to arise, awake and take some action to throw away the British

regime, but was not finding the way out.

3.2 (B) POLITICAL ENVIRONMENT

(1) THE BEGINNING OF BRITISH REGIME

The East India Company was established in 1600 in order to engage in

trade and commerce with India. During the 17th Century the English

established their commercial centres at different places such as Bombay,

Surat, etc.. After capturing the key centres on Indian coast, it became easier

for them to expand their business in India. For the purpose of expanding

their trade and commerce they thought it necessary to have their control on

the Indian territories. The only way to do this was to enter into the Indian

political scene.

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In 1707-98. Lord Wellislee was appointed the Governor General of India.

His main objective was to bring the whole of Indian territory under British

rule. In those days, different rulers in India were fighting among themselves

for territorial control. They were not united and organised. It was therefore,

possible for the English to take full advantage of these internal rivalries and

quarrels.

(2) EXPANSION OF BRITISH POWER

The English had their typical way of extending their power in India. After

defeating any of the Indian princes they used to impose following terms and

conditions of dealing with the British Government :

(a) That the Indian ruler should take the help of English armed forces for

his defence.

(b) For expenses, the ruler should part with a piece of territory to the English

Government.

(c) That he must keep the English resident at his court.

(d) That he should not take any decisions without the prior permission of

the English Government.

(e) That he should discontinue his relationship with any of the other rulers.

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The sole objective and purpose of this system was the complete

subjugation Indian princes and rulers.

(3) FREEDOM STRUGGLE

In 1799, the English defeated Tipu Sultan and in 1818, they annexed the

domination of Peshwas to the British empire. The end of Tipu Sultan and the

Peshwaiee paved the way for further conquest in India with little resistance.

During 1818 to 1857, the English had captured practically the whole of India.

In 1857, a large number of princes rulers raised a revolt against the English

which was crushed by the English Government. After the freedom struggle of

1857, no such united effort was made by Indians for a long time. However,

after 1857 and before 1947. there were some sporadic efforts by the freedom

fighters like Vasudeo Balwant Phadke, Chaphekar Brothers, etc. Among these

patriots, Bal Gangadhar Tilak was very active in awakening the people of India

to fight against the English rule. In those days he used to write fiery articles

in Daily Kesari on the contemporary political scene and on the Indian Society

which had fallen in a torpor. Mass disobedience agitation and, defiance of

English Government and Swadeshi movement were the ways of freedom struggle

in those days.

3.2 (C) ECONOMIC ENVIRONMENT

(1) DROUGHTS - A SERIES OF NATURAL CALAMITIES

Only the period between 1850 and 1967 was a good period for

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the national economy. India is an agricultural country, where farmers have

to depend on rains for good harvest. Rains in India are uncertain. In

1876-77, 1895-96, 1900-1901, 1907-1908 and 1918-1919, Indian economy

suffered heavily due to drought.

(2) FUNDAMENTAL CHANGES IN THE NATIONAL ECONOMIC SYSTEM

Indian economy was a village economy. The villagers were self suflicient

and many artisans who were skilled in carving on silver and ivory, producing

silk cloth, handicraft, etc. earned their bread and butter by following their

trades. Some of the skilled workers worked under the patronage of Kings and

Maharajas who ruled different states. When the English Government adopted

the policy of dissolving their dominations, many craftsmen and artisans lost

their Jobs and became unemployed. The village under English regime was

being used as a source of raw- material and ready market for selling the

products manufactured by British Industries. No encouragement was given

to the small scale and cottage industries by the British Government.

The Britishers were industrially advanced. They used to produce goods

of finer quality compared to the goods produced by Indians. The Indian

consumers were attracted to such sophisticated products very easily. In order

to expand their trade in India, the Britishers started constructing the required

infrastructural facilities such as railways, ports, roads, etc.. The craftsmen

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who had become unemployed due to the dissolution of princely states got jobs

in British railways and on ports.

Under the British rule, the Britishers did not only extend their empire

but also captured the Indian markets. They exploited Indians and carried

away tremendous wealth to Great Briton.

(3) NATIONAL MOVEMENT FOR ECONOMIC AWARENESS

Different leaders like Loakmanya Tilak, Swantantrya Vir Savarkar,

Mahatma Gandhi, were making the Indian people aware of their exploitation.

The Swadeshi movement had begun. They appealed the Indian people to be

Indians and buy Indian products. The articles written by Loakmanya Tilak in

Kesari are revealing enough of the contemporary efforts by the leaders for

economic awareness. A few examples of such articles are :

In these articles Tilak pointed out that the competition from foreign

goods to the indigenous goods, lack of vocational training, inadequate finance,

lack of credit-worthiness and absence of aids to trade (banking, transport,

etc.) were some of the major reasons for India's poor showing on Industrial

front. He exhorted the Indian people to enter in the field of industiy.

Laxmanrao Kashinath Kirloskar was inspired by the national movement

for economic awareness. Therefore, he was determined to enter into the field

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of Industry and manufacture such articles that would compete well with the

ICiifiiiHli piodiicls.

3.3 LAXMANRAO KIRLOSKAR

- THE FOUNDER OF KIRLOSKAR BROTHERS

Laxmanrao was bom on 20th June, 1869 in a small village called Gulhosur

in Belgaum District of the present Karnatak state (then Bombay state).

The contemporary social, political and

economic environment as mentioned earlier

gives us a rough idea as to what was the

situation in which Laxmanrao was bom. Due

to family problems, he could not pursue his

academic career beyond 4th standard in an

Anglo Vernacular School. However, he got

himself trained under the able guidance of

his elder brother Ramuanna who worked in

Belgaum as a school teacher. Since his childhood, Laxmanrao had shown

a keen interest in the drawing and preparing home-made articles. A liking

for these two subjects was all right as a hobby in those days but when

Laxmanrao declared that he was going to make a career out of them, his

father Kashinathpant and his elder brother Ramuanna were upset. In those

days the family of Kirloskars was economically very poor. They expected

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Laxmanrao to study and get employed in some government office so as to earn

regular salary to support the family. However, the members of his family did

not hinder his way to fashion his own career. They supported the efforts of

Laxmanrao. Ramuanna constantly guided him with brotherly affection.

Under the English regime there were no institutes for training the

technical and managerial skills in business as they are available today. Therefore,

Laxmanrao had to learn these skills through trial and error method,

i.e. through actual practice.

Laxmanrao was veiy ambitious and in his young age he was inspired by

the national freedom movement. He wanted to contribute his might to the

freedom struggle in his way. Laxmanrao had an aptitude for manufacturing

some import substitute item rather than hunting for a Job somewhere. With

the aim of establishing an industry, he kept himself abreast with the latest

developments in the field of technology. He avidly read foreign magazines like

"American Machinists". "Scientific American", etc. He collected catalogues of

foreign goods. He used to study them carefully. In those days it was something

unusual.

Laxmanrao knew that for competing with the British products in Indian

markets, the goods that he would manufacture must be of a high quality.

Therefore, throughout his career as an entrepreneur, he always paid utmost

attention to the quality of whatever he produced.

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3.3.1 FAMILY BACKGROUND OF THE FOUNDER

Those with surname "Kirloskar" came originally from a small village named

"Kirloskee", which is in the Taluka Malvan, district Ratnagiri. Earlier they had

the surname "Konkar". Subsequently, they changed their surname from "Konkar"

to "Kirloskar".

Kashinathpant Vasudeo Kirloskar was the father of Laxmanrao.

Kashinathpant came from a middle class family, having a reasonable financial

status neither too rich nor too poor. However, it was a Joint family and

therefore, Kashinathpant had to accept an arduous Job of collecting land

revenue from various landlords who were geographically spread from Gujarat

to Mysore. He covered the length and breath of this region on horseback.

Kashinathpant used to do his Job with sincerity and devotion. He was also

honoured by Captain Fanning during his stay in Surat in 1856 for his meritorious

services.

Beside this Job, Kashinathpant devoted himself to the study of the Vedas.

By the time when he retired from the service, he had been honoured as

Vadant Pandit.

These brief biographical details of Kashinathpant Kirloskar indicate that

the spirit of sincerity. Integrity, devotion, loyalty and such other qualities of

head and heart were passed on to his son Laxmanrao Kirloskar.

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Kashinathpant had two brothers : Krishnajipant and Gopalrao.

Krishnajipant had a son and daughter : Gangadharpant and Chandrabal.

One day while Krishnajipant was on his tour as a medical representative to

Gandagapur, district Solapur, he was reported to have been absconding. The

police feared that he was killed by dacoits. Kashinathpant had to take the

responsibility of the family of Krishnajipant.

Kashinathpant had also to shoulder the responsibility of the family of his

another brother Gopalrao. Gopalrao was an advocate. His business received

a serious set-back due to the wide spread plague and small pox.

Thus, the family responsibilities of Kashinathpant increased greatly and

therefore, he found it difficult to support such a big joint family.

Annapurna was Laxmanrao’s mother. She died when Laxmanrao was

still a child. In 1892, Laxmanrao’s lather Kashinathpant died due to an injury

in a minor accident.

Laxmanrao was the youngest in the family. He had two elder sisters:

Batakka and Durgabai: and two elder brothers : Vasudeorao and Ramuanna.

Ramuanna was working as a school teacher in Belgaum. Dr .Vasudeorao was

not only a doctor by profession but he had started a workshop named

"M/s. Shivaji Works" in Solapur. He was also popular as a writer. He used

to write good articles in magazines and newspapers on important topics.

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Laxmanrao could not complete his academic education beyond the Fourth

Standard in an English Medium School. He studied Marathi at three dilTerent

places : Dharwar, Gadag and Kaladaki. Considering his family responsibilities,

he had to get employed somewhere to support his family. Therefore, he went

to Bombay and got employed in the Victoria Jubilee Technical Institute (V.J.T.I.)

as a school teacher of mechanical drawing. Laxmanrao had four sons :

Shantanu, Rajarampant, Ravindra and Prabhakar. Later, Shantanurao Kirloskar

distinguished himself as a successful entrepreneur of our country.

To summarize, it can be observed from the study of the family

background of Laxmanrao Kirloskar that :

(1) Although he was the youngest in the family, he voluntarily agreed to

shoulder the responsibility of financially supporting his Joint family.

(2) Laxmanrao joined V.J.T.I. as a school teacher only as a matter of necessity

to earn regular income. His basic inclination was towards starting his

own workshop.

(3) Laxmanrao's father Kashlnathpant was In no way related to the Held of

technology and engineering in which Laxmanrao became a pioneering

figure subsequently. Thus Laxmanrao is the First Generation Entrepreneur

in Kirloskars.

(4) All the three Kirloskar brothers : Laxmanrao, Dr.Vasudeorao and Ramuanna

had an aptitude for technical subjects.

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(5) It is worthwhile to note that Laxmanrao's father Kashlnathpant, though

he came from a lower middle class family, wanted his children to leam

the subjects of their individual liking. Though the financial condition of

the family was not veiy satisfactory, Kashinathpant helped Vasudeorao

to become a doctor. Gopalrao to complete his studies in Law and Laxmanrao

to leam the subject of Engineering drawing.

3.3.2 LAXMANRAO AS A SCHOOL TEACHER

It Is because of his personal aptitude towards the subject of drawing,

that Laxmanrao went to Bombay to undergo a training course of Technical

Draftsmanship at the J.J.School of Arts. After completing this course, he

Joined the Victoria Jubilee Technical Institute (V.J.T.I.) as a school teacher.

He taught the students the subject of mechanical drawing. He was paid a

salary of Rs.35/- per month. He increased his knowledge of technical

subjects by frequently visiting and working in the workshop which was near

the school. He worked on various machines : lathes, drilling machines,

shaping machine, slotting machine, etc..

In those days teaching was looked upon as a noble profession.

Therefore, people did not like him to work in the workshop as well. However,

Laxmanrao ignored the public opinion. He was determined to swim against

the current. He decided to start an industrial unit in future. He was working

as a school teacher only because he wanted to support his family financially.

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During the time he was in workshop, Noorkhan Ebrahim who was other

machinist working there, became his best friend. Through his personal contracts,

he helped Laxmanrao by giving him the contracts of mechanical drawings for

Grand Eastern Mills. He also helped Laxmanrao in starting a printing press

in 1892. Ebrahim. thus, helped Laxmanrao in serval ways to earn additional

Income.

3.3.3 LAXMANRAO AS AN AGENT

One day, on his way to school, Laxmanrao saw a parsi driving an

unusual sort of bicycle with

two different sized wheels.

Laxmanrao obtained the

information as to who

manufactured those bi­

cycles, where they were

sold, etc.. When he came

to know that an American

company produced those

bicycles, he collected a

catalogue from the

American company and

studied it thoroughly. He

iTfit ^ - j.

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purchased the bicycle also. He learnt to ride it. In those days customers

procured the various parts of the bicycle and assembled it on their own. The

bicycle company supplied spare parts only. Laxmanrao thought of doing a

business out of it. In the mean time lot of developments took place in the

shape of the bicycle. I^axnianrao started the business of purchasing spare

parts of the bicycle from M/s. Wachha Brothers and supplying the properly

assembled bicycles to customers. Within a short period of time he became

well known in the market as the seller of bicycles. The demand for bicycles

started increasing. Then he got the address of the American company and

started dealing with it without the interference of any middleman. For the

purpose of bicycle trade he started a firm in partnership with his elder brother,

Ramuanna. He named the firm as KIRLOSILAR BROTHERS. The name of

Klrloskar Brothers, thus became popular as the bicycle agents.

Laxmanrao then decided to expand the business of bicycle agency. He

started a bicycle sales and repairs workshop in Belgaum. His elder brother

Ramuanna looked after it. Laxmanrao in Bombay purchased bicycles from

the foreign countries and supplied them to Ramuanna in Belgaum.

Laxmanrao knew that if the people learnt to ride a bicycle then only they

would buy it. Therefore, he opened a class for teaching the art of bicycle

riding in Belgaum. Ramuanna alongwith the two poor and needy students :

K.K.Kulkarni and Rangoba Bhagwat helped Laxmanrao in his work.

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Laxmanrao trained about 300 rich and respected people in those days.

Contacts developed by Laxmanrao with these people helped him in starting a

factory at Kirloskarwadi.

It is worthwhile to note that Laxmanrao looked after the business of

Kirloskar Borthers simultaneously while working as a school teacher in Bombay.

Laxmanrao worked as a school teacher for about 10 to 12 years. He resigned

from the service in V.J.T.I. when he was refused the promotion which was

overdue.

3.3.4 EARLY EXPLORATIONS

Since the beginning of his career Laxmanrao constantly thought of some

such product that he could manufacture on a very small scale and with a

small financial investment. Laxmanrao, had the ambition of becoming a

manufacturer but he wanted to realize this dream step by step.

While thinking on these lines, Laxmanrao decided to produce coat

buttons and pill-boxes. Laxmanrao undertook the production of pill boxes

and coat buttons not only because it involved less use of machines but also

because it was an import substitute item; Laxmanrao was motivated to produce

such items as a result of being influenced by the freedom struggle.

Dr.Nanasheb Deshmukh, who was a well known doctor by profession,

provided the required finance that Laxmanrao needed for this venture.

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Laxmanrao imported a lathe machine from Barnoss Company of U.S.A..

As he ran short of funds, his wife Radhabai, offered to sell her gold ornaments

and helped in her husband's venture. Laxmanrao employed two workers in

his workshop and started producing these products. The pill-boxes that he

manufactured were purchased by his doctor friends. Within a short period of

two, three years, Laxmanrao was able to repay the loan that he had from

Dr.Deshmukh. However, his business suffered many set backs during 1897

due to the wide-spread plague.

What is to be done to support his family was the question. He could not

think of going back to Bombay as he had already resigned from V.J.T.I. The

income that he was getting from the bicycle shop and sale of the pill-boxes

was inadequate. Therefore, he started selling wind pumps which were in great

demand in Belgaum. He entered into a contract with the Sampson Company.

Through this business he earned a considerable amount of commission.

In iQOO, the business of Kirloskar Brothers achieved stability. However,

Laxmanrao was not satisfied with doing the business of bicycle repairs and

sales, producing coat buttons and selling wind pumps. He wanted to manufacture

some product rather than to sell an imported article. Therefore, he started

producing bicycle parts. He produced three, four bicycles also. However,

considering the investments, he had to give up this idea. He did not feel sorry

about giving up this idea, because he was a truly business minded person so

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far as the investments and the returns therefrom were concerned. In those

days, there was no well-organized banking system to give loans on favourable

terms as we have at present. This was a major impediment in the progress

of business in those days.

Laxmanrao thus, was a GENIUS. His constant endeavour to go out of

the way and to do something new, helped him to stand out every step in his

journey right from a teachership to the manufacturer.

3.3.5 LAXMANRAO - THE GREAT ENTREPRENEUR OF MAHARASHTRA

The pioneering effort of Laxmanrao to establish and develop the business

of rarloskar Brothers has a remarkable impact on the industrial development

of Maharashtra. Today, we And that the branches of Kirloskar Brothers are

doing business in several important cities : Pune. Kirloskarwadi, Karad and

Solapur. It is worthwhile to note that Laxmanrao had started the branches

of Kirloskar Brothers at these different places when these cities were industrially

backward. During that period there were neither the infrastructural facilities

for industrial development nor the British people were encouraging the Indian

industries.

Thus, the distincive feature of Laxmanrao is that he worked under all

adverse conditions and still contributed his best to the industrial development

of the State of Maharashtra. Transformation of the 32 acre barren plot of land

at Kundal Road, into an industrially developed city now called Kirloskarwadi

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is an excellent example in this respect.

Another point of Laxmanrao that makes him a genius is that he dealt

with such engineering products as oil engines, pumps, lathes, air and gas

compressors, castings, marine engines, etc. that have led to the achievement

of agriculture and industry, which are the two major parameters of economic

growth of a country.

Laxmanrao not only developed the business of Kirloskar Brothers but

also helped the development of Industrially backward regions by inspiring,

guiding and encouraging many people to become successful entrepreneurs in

and around Maharashtra e.g. Mr.Pusalkar, Mr.Vithoba Sutar, Mr. Kudchikar,

Mr. Shankarrao Kothawale, Mr. Bassappa Honnoor, Mr. Sonalkar, Mr. Venkappa

Sutar, Mr. Rambhau Savant, Mr. I.G.Chanchanikar, Mr.Hudali, Mr.Kajagar,

Mr.K.B.Shirolkar, Mr. Hari Vasudeo Nagarkar, etc..

Laxmanrao had all the qualities of a sucessful entrepreneur. He had the

vision to set an objective and pursue it doggedly. He was a self-made man.

He started the business of Kirloskar Brothers with an view to get self-employment.

The introduction of iron ploughs in the place of traditionally used wooden

ploughs for agriculture, shows his innovative approach in his work.

He had the enterprising spirit to take risk. The way in which he had

decided to manufacture furniture items such as folding chairs and tables,

beds, shelves and some major items of hospital furniture, etc. to overcome the

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period of induslrlnl depression of 1925-30, is a remarkable example of his

innovativeness, industriousness and his ability to overcome diflleulties in

business. Laxmanrao had a patience, managerial skill and foresight. The

example of relieving the two 'dacoits', : Pirya Manng and Tukkya Ramoshi

from the imprisonment and further assigning them the job of the gate-keeper

at Kirloskarwadi shows how well Laxmanrao used to rehabilitate such people

and develop them into useful respectable members of the society.

An entrepreneur does not only Invest his own persons but also his own

funds, however small they may be. Laxmanrao did not only train people

working under him, in their respective Jobs and employed them in the

business but he also endeavoured hard to look for the financial resources. In

those days there was no well developed banking system. Laxmanrao had to

create his own contacts and creditworthiness to generate funds from his friends

and other rich people like the Raja of Aundh. Laxmanrao made great efforts

to develop his own reliability and creditworthiness. He undertook the work of

electroplating the roof of the Yammaie Temple owned by the Raja of Aundh,

(District : Satara); the inner motive was to win the favour of the Raja of

Aundh, who would finance his project in future.

He was fully aware about the social responsibilities of business. He was

of the opinion that the businessman must contribute his might to the

development of the society.

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The following activities of Laxmanrao show that he had a deep concern

for the welfare of his workers.

(1) lie coiislructcd a rccrcation hall callcd 'SainaJ Mandlr' for the bcnelU of

workers.

(2) In those days, very few big industrial concerns such as the Ford Motor

Company, (U.S.A.) used to have the practice of publishing the 'house-

journal' for covering the important events in the industiy. On similar

lines, Laxmanrao also started publishing a news bulletin called "Kirloskar

Khabar" so as to facilitate the workers to express their feelings and

opinions by writing articles on different subjects for their interest and

liking. Kirloskar Khabar also served the purpose of communicating the

achievements of Kirloskar Brothers Limited to all the workers in the

company.

(3) Kirloskarwadi was fornially a barren plot of land. Thcrclorc, Laxmanrao

took active interest in tree plantation. This provided the workers an

environment conducive to work.

(4) We find that while establishing the Industrial town at Kirloskarwadi,

Laxmanrao was very creative and selective about the plant layout.

(5) Laxmanrao helped one of his workers, Mr.Bhaurao Patil. Mr. Bhaurao

Patil wanted wanted to establish Satya Shodhak SamaJ for educating the

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non-brahmans. U iUm' Mr.Oliaurao Patll, devoted lilmscll coiiiplclcly lor

this laudable mission. He was honoured as 'Karmaveer' for his work in

this field.

(6) There is one small but important incident which shows his sense of

obligation. During the period of floods, in Bengal, funds were being

collected by social workers, for the rehabilitation of flood-affected people

in Bengal. When one of the social workers approached Laxmanrao for

contribution, he withdrew the whole amount of his balance in the bank

and handed it over to the volunteer.

Laxmanrao was honoured by several dignitaries such as Late Tatyasaheb

Kelkar, Shrimant Balasaheb Pantprathinidhi, Pandit Jawaharlal Nehru,

Loakmanya Tilak when they visited Kirloskarwadi. He had also been honoured

by the award of Kaisar-E-Hind by the Raja of Aundh.

Various personal qualities and the landmarks in the life of Laxmanrao

that are mentioned above clearly indicate that Laxmanrao was the great en­

trepreneur of Maharashtra and of our country.

The 87 years of life span of Laxmanrao came to an end on 25th September,

1956. The demise of Laxmanrao brought the first chapter in the History of

Kirloskar Brothers to an end»

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3.4 SHRI. SHANTANURAO LAXMANRAO KIRLOSKAR -

THE CHIP OF THE OLD BLOCK

Shantanurao Klrloskar is the eldest son

of Laxmanrao. He was bom on 28th May,

1903 at Solapur. He completed his school

education alongwith the children of the

workers dt Kirlosloskarwadi. In 1913, he

was taken to Aundh by his uncle Ramuanna

with other boys at Kirloskarwadi for their

highschool education. He completed his

secondary education from New English

School. Pune. His favourite subjects were arithmetic, algebra, geometry and

physical sciences. Therefore, on the recommendation of their family friend

Mr.Nagudada Ogale, who had undertaken a tour to U.S.A., papa (Laxmanrao)

sent Shantanurao to Massachusetts Institute of Technology, U.S.A. for studying

Mechanical Engineering. He also worked on the shop floor in the machine

tools manufacturing plant of Pratt & Whitney at Hartford, Connecticut for a

period of four months and gained some practical knowledge.

During 1923-26, he stayed in the MIT Students' dormitory, where he

developed his own contacts with relatively senior people studying with him.

Shantanurao passed his examination in MIT with credit and received his B.

Sc. degree (Engineering) in 1926.

(39)

When Shantanurao Klrloskar returned from foreign country, India was

In a political turmoil. The freedom movement had spread throughout the

country. In the freedom struggle started under the leadership of Mahatma

Gandhi, he was also a participant.

In 1927, Shantanurao played a major role In establishing the Federation

of Indian Chamber of Commerce & Industries (FICCI) as a deliberate counterblast

to the British Businessman's Association. The objective of FICCI was to

obtain valuable information about current business developments and the

future policy of British Government.

In 1928, Shantanurao got an opportunity to diversify the production of

Klrloskar Brothers when the centrifugal pumps were proposed to be produced

alongwith the other farm machines and machine-tools. Mysore Klrloskar Ltd.

was established for the purpose of providing machines to the farmers.

After 1928, Shantanurao was instrumental in establishing and develop­

ing different companies in the Business House of Kirloskars. We will be

referring to these developments in the History of Klrloskar Brotliers in detail.

His djoiamic personality. Industriousness and entrepreneurship brought

him a number of honours at national and international levels. He was awarded

Padama Bhushan by the President of India Dr. S. Radhakrlshnan for his

distinctive contribution in the field of Indian Industries.

(40)

3.5 HISTORY OF KIRLOSKAR BROTHERS

-rh.-TTl!>SThe History of Kirlokar Brothers and the lives of the Laxmanrao and

Shantanurao can not be studied in isolation. This is because the development

of the business of Kirloskar Brothers is the result of the pioneering efforts of

these two entrepreneurs. Therefore, in this part of the chapter also frequent

references to the work of Laxmanrao and Shantanurao are inevitable.

3.5.1 PERIOD FROM 1888 TO 1920

(TRANSFORMATION OF PARTNERSHIP FIRM INTO A LIMITED COMPANY)

TABLE NO. 1

TABLE SHOWING THE GRWOTH OF KIRLOSKAR BROTHERS

SINCE 1888 TO 1920

Year Landmarks (FYom Kirloskar Brothers to Kirloskar Limited)

1888 Kirloskar Brothers' Bicycle Shop at Bombay and Belgaum

1900 Shivaji Works - converted into a public company

1901 Chaff-cutters were manufactured

1903 i) Bicycle shop - sold

ii) Shifted the business to Thalakwadi First Indigenous Iron Plough was manufactured shifted from Thalakwadi to Kundal Road

a. Conversion into a Limited Company

b. First Sugarcane Crusher was produced

c. Film on Kirloskars

d. Kirloskar Khabar

T h T J ^ S '

The Kirloskar legend started about a hundred years ago i.e. in 1888

(41)

when Laxmanrao and his elder brother Ramuanna brought them together on

catalogue under the name of Kirloskar Brothers. As mentioned earlier, in

those days they sold bicycles and bicycle parts, repaired bicycles and also

taught bicycle riding to the people. Thus in the initial period the name of

Kirloskar Brothers was popular as bicycle agents. They had two branches one

at Bombay and other at Belgaum. Laxmanrao imported bicycles and supplied

them to Ramuarma who looked after the branch at Belgaum.

When Laxmanrao and Ramuanna were looking after the bicycle shop,

their brother Dr.Vasudeorao opened a workshop named "Shivaji Works" at

Solapur, He manufactured tifln carriers, stoves, etc.. In 1900, the Shivaji

Works was converted into a company called Shivaji Works Limited with a

capital of Rs.30,000/-. It is the oldest company in Maharashtra with Registration

Number 75.

In 1901, Kirloskar Brothers produced a chaff-cutter that was used for

cutting grass for feeding cattle. Kirloskar Brothers sold the chaff-cutters for

Rs.lO and 5 annas each. For the purpose of producing the chaff-cutter, they

purchased a two and half horse power engine of Mits and Molier company, one

small lathe from Bamoss Company, a drilling machine and one emery grinder.

It was the first time in the History of Kirloskar Brothers that machinery was

imported for indigenous production of chaff-cutter. They employed about

live men to work in the workshop. The chaff-cutter happens to be the first

product of Kirloskar Brothers.

(42)

In 1903, Kirloskar Brothers sold their bicycle shop to Mr.Nanasaheb

Dewal for Rs.2,000/- and focused its attention on the production of chaff-

cutters. Laxmanrao was making lots of experiments for improving the quality

of chaff-cutters. These efforts made the chaff-cutter popular among the

customers. The business of Kirloskar Brothers started increasing. The plant

at Belgaum was too inadequate to cater to the increasing orders of the customers.

Therefore, Laxmanrao had to shift the business to Thalakwadl.

The chalf-cutters were in great demand from the farmers who had cattle

on their farms. Now, Laxmanrao thought of producing some such other item

that would be useful to the farmers. India being an agricultural country, such

a product could get a nationwide market. Therefore. Laxmanrao decided to

produce iron ploughs for Indian farmers. It was a novel Idea because farmers

used wooden ploughs before this time. In 1905, the first Iron plough was

made In India by Kirloskar Brothers. However It took some time to make the

iron plough popular among the farmers because they were superstitious and

slow to change from their traditional methods. The first batch of six ploughs

therefore remained unsold for nearly two years. After two years of producing

the first batch of iron ploughs, some farmers from MiraJ, district Kolhapur,

purchased some ploughs. They found these ploughs better than the traditional

ones. They started recommending the use of iron ploughs. Thereafter, there

was less resistance from the farmers to use these ploughs. Gradually, the

iron ploughs of Kirloskar Brothers became popular. The sales showed an

(43)

increase from 6 to 200 ploughs per year. Nearly 14 years later, the sale of

iron ploughs shot up to 40,000 ploughs per annum. The number of workers

working with Kirloskar Brothers also increased to 40. The earlier two and half

horse power engine was changed for eight horse power engine of Black Stone

Company.

In 1910, the Municipality of Belgaum, issued a notice for shifting the

works of Kirloskar Brothers, within a period of 6 months. This posed a

problem to Laxmanrao. The Raja of Aundh rescued Laxmanrao out of this

difficulty by not only offering 32 acres of land but also giving a loan of

Rs. 10,000/- for assisting the work of shifting the business from Thalakwadi

to Kundal. Kundal was a very small village on the outskirts of Aundh area.

It was literally a barren plot of land. Laxmanrao went to Kundal in 1910 with

33 faithful workers. There was nothing except a choultiy and two or

three houses near the railway station. It was because of the growing business

of Kirloskar Brothers that the name of the village was changed from Kundalroad

to Kirloskarwadi.

The business of Kirloskar Brothers increased rapidly. The number of

workers working in the industry increased to 800. The price of the iron

plough was increased to Rs.70/-. However, there was a limitation to the

growth of business due to the inherent limitations of the partnership form of

(44)

business organisation. Therefore. Laxmanrao thought of converting the part­

nership ftrm into a limited company.

Accordingly, an application was made to the Registrar of Companies for

registering Kirloskar Brothers as a Limited Company, with an authorised capital

of Rs. 12.00,000/- divided Into 48,000 shares of Rs.25/- each. The Raja of

Aundh agreed to purchase some shares of the company and also agreed to act

as the chairman of the company. The Board of Directors of the company

consisted of some influential and knowledgeable people. The company as­

sured the shareholders of atleast 9% dividend eveiy year. They also promised

that the managing agents would not take any share of profits unless the

dividend was so paid by the company. The total assets of the company were

worth Rs.5.00.000/-. However, the public issue was made only for Rs.3,80,000/

- shares. The people started buying the shares when they were assured of the

returns on their investments.

"Kirloskar and Sons" was established as the managing agents. laxmanrao,

Shambhorao Jambhekar, Anantrao Phalnlkar. Shankarrao Kirloskar and

Nanasaheb Gurjar were co-opted as partners of the Kirloskar and Sons.

After the establishment of Kirloskar Brothers Limited. Laxmanrao started

thinking about diversification. He produced the first sugarcane crusher within

a short period from the establishment of the company.

(45)

Some of the other noteworthy activities undertaken by Laxmanrao during

the period of 1920 are the publication of a news magazine called "Kirloskar

Khabar" and a film on growth of the business of Kirloskar Brothers Ltd..

Laxmanrao always aspired to take Kirloskar Brothers Ltd. on the lines

as those of foreign companies. Therefore, when he leamt that Ford Company

in U.S.A. issued a news magazine called "Ford Times" to review the internal

progress of the workers and their work, he also decided to publish a news

bulletin called "Kirloskar Khabar" on 1st January. 1920. That was how the

Kirloskar Press was started at Kirloskar wadi as an ancillaiy activity of Kirloskar

Brothers Limited. Subsequently, the press was shifted to Pune. Kirloskar

Press published monthly magazines, "Stree", "Kirloskar". "Manohar". etc. over

a long period. However, since 1988, the business of publishing was closed by

selling it to Apurwa Publishing (Pvt.) Ltd.. At present the press undertakes

printing work only.

In 1922, Laxmanrao conceived the idea of preparing a film on the indus­

trial development achieved by Kirloskar Brothers Limited. The two reknowned

personalities in the field of film industty, Mr.Baburao Penter and Mr. Phattelal

Damle were invited for the purpose of shooting the film on how Kirloskar

Brothers Limited produced the iron ploughs, chaff-cutter and iron castings,

etc.. This film was released for public viewing at Bangalore in an industrial

exhibition.

(46)

3.5.2 PERIOD BETWEEN 1921 to 1952

(STRUGGLE AGAINST DEPRESSION AND FURTHER DEVELOPMENT)

The following table shows the major landmarks of this period :

TABLE NO. 2

TABLE SHOWING THE GROWTH OF KIRLOSKAR BROTHERS LIMITEDSINCE 1921 TO 1952

YEAR LANDMARKS

1926 Return of Shantanurao from MIT, U.S.A.

1930 STRUGGLE AGAINST DEPRESSION

- Drilling machine, nut and bolts

- Steel furniture, hand pumps- Groundnut decortlcators

1930 to 1939 Diesel engines, electric motors, lathes and concrete mixers

1929 to 1952 Branching out - promotion of different companies

On 26th October 1926, Shantanurao returned from U.S.A. after under­

going a rigourous training in the field of Mechanical Engineering at the MIT.

Indian industries were not as advanced as the industries in U.S.A. Kirloskar

Brothers Limited also was not an exception to this. Kirloskar Brothers Limited

was using those techniques of producing their products which the American

Industries had used 50 years earlier. Kirloskar Brothers Limited was lagging

behind the advanced countries of the world.

(47)

In 1926, Kirloskar Brot±iers Limited was producing 20 types of iron ploughs,

four different types of sugarcane crushers and three types of chaff cutters.

Due to the great depression of 1930s the demand for Kirloskar products

was decreasing. There was a period during 1926 to 1930 when there was no

work for the workers in the foundry and machine shop at Kirloskarwadi.

Shantanurao had to take certain steps to overcome the situation. Shantanurao,

(i) removed the temporary workers,

(ii) made a five day week instead of a six day week.

(iii) tried to explore the markets for Kirloskar products in Madhya pradesh

and Madras States,

(iv) changed the method of advertising the products. He insisted on dem-

onstrallng the product to the customers as a niclhod of advertising,

(v) for the purpose of selling the company's products, he builtup a sales and

distribution network. This was the time when Parry and Company was

appointed as the agents of Kirloskars. They assured the company to give

fixed sales of Kirloskar products per annum,

(vi) applied to the Railway company for concessions in transporting the

goods. Shantanurao endeavoured to reduce the cost of the products.

(48)

All these efforts and Ideas of Shantanurao contributed materially in the

struggle of Kirloskar Brothers Limited against the depression.

The traditional products of Kirloskar Brothers Limited had a less demand

in the markert. Therefore, the company diversified its activities and started

producing products which were in demand. It produced nuts and bolts,

drilling machines, steel furniture such as steel tables, chairs, hospital furni­

ture such as beds, shelves, ten different types of groundnut decorticators and

centrifugal pumps used by sugar industries.

Thus, Shantanurao on his return from U.S.A. was successful in facing

the period of depression by using most practical and modern methods of

business.

The great depression of 1930s was followed by the Second World War.

The World War had a favourable effect on the business of the company. The

Government stopped importing machine-tool items from France and decided

to buy them from Indian producers. lOrloskar Brothers Limited produced a

lathe for making the outer cover of the bombshell and sold it to the British

Government. The sales rose rapidly. They got many orders for various other

machine tool products such as planning and processing machines, etc. for

defence purposes. Kirloskar Brothers Limited executed all these orders promptly

and efficiently.

(49)

During 1926 to 1936 the company was producing 5. 8 and 16 Horse

Power engines at Klrloskarwadi. Shantanurao wanted to develop a greater

Horse Power engine. However, the required forging and fuel injection equip­

ment was not available In India. He thought of importing the required parts

and machines from other countries. During this period Kirloskar Brothers

Limited was thinking of producing diesel engines but was not able to find a

wayout.

In the mean time Pariy and Company accepted the agency contract with

Kirloskar Brothers Limited. Parry and Company was a British firm. It was

working as an agent for selling the Electrical Motor and Oil Engines of Brush

Manufacturing Company and British Oil Engine Export Company respectively.

Shantanurao discussed the possibility of producing electrical motors, diesel

and oil engines in India. Due to the World War, the idea did not materialise.

Considering the increasing demand lor concrcte mixers that were used in

construction work, the company also made an attempt to produce them at

Klrloskarwadi in 1936.

In conclusion, it can be observed that in the period of 1926 to 1945

Kirloskar Brothers Limited :

(I) struggled against the great depression,

(II) met the orders for defence products.

(50)

(iii) negotiated with foreign companies to secure their help in producing elec­

trical motors and diesel engines.

(iv) prepared grounds for further expansion.

From 1939 to 1952, the House of Kirloskars branched out by establish­

ing various companies. Following is a table showing the list of companies

established from 1900 to 1952

TABLE NO. 3COMPANIES ESTABLISHED BY THE HOUSE OF KIRLOSKARS

FROM 1900 TO 1952

Year of Establishment Names of Companies

1900 Shivaji Works Limited

1920 Kirloskar Brothers Limited

1938 G. G. Dandekar Machines Works Limited1941 Mysore Kirloskar Limited

1946 Kirloskar Oil Engines Limited (KOEL)1946 Kirloskar Electric Company Limited (KECL)1950 Lakaki Works Limited

(NOTE : It is important to note that the product that these companiesmanufactured were first tried and tested by Kirloskar Brothers Limited at

Kirloskarwadi.)

3.5.3 PERIOD FROM 1952 ONWARDS

(ERA OF FOREIGN COLLABORATIONS AND DIVERSIFICATIONS)

The following table shows the landmarks in the progress of Kirloskars

from 1952 onwards.

(51)

TABLE NO 4LANDMARKS OF THE HOUSE OF KIRLOSKARS SINCE 1952.

Year Landmarks

1952 First step in the House of Klrloskars towards foreign collaboration -KECL - entered into collaboration.

1958 First collaboration by KBL1959 Shifting of Kirloskar Press at Pune1961 Plant at Dewas

1963 Second collaboration by KBL1968 Production of the first Hermetic Compressor at Kirloskarwadi

- Third collaboration- Registered under MRTP Act

1968 Shifting of the Head Office1970 Fourth Collaboration

- Established the Hermetic Compressors Division at Karad.1974 Fifth Collaboration1980 Sixth Collaboralion1980to Further Growth in terms of employment, net-worth, sales, profits.

1988

Upto 1952, Kirloskar Brothers Limited was producing various types of

hand driven pumps and valves on a very large scale at Kirloskarwadi. It was

the right time to buy the plots of land at different places and shift a part of

business at new premises.

In 1952, for the llrst time in the history of the House of Klrloskars that

Kirloskar Electric Company Limited, Bangalore entered into a foreign collabo­

ration with Brush Electric Engineering Co. Ltd., of Leicestershire, U.K.* for

manufacturing 1-50 H.P. Brush Electric Motors.

• Reference - 'Dictionary for foreign collaborations' Published by N. K. Vyan Publishers, Ahmedabad, 380 009, Fagel29 Sr.No.l630

(52)

Shantanurao Klrloskar gives the following two reasons for foreign

collaborations :

(i) "The saving of time which Is such a crucial factor In business and

(ii) the great advantages of benefittlng from the know-how and continuous

upgrading of the technical advances which our collaborators developed at

enormous cost."

Shantanurao further says, "Looking to India's large potentials, I felt we

should start making our own parts and components................. Production of

engines had to be sizable to make it economic and sizable production de­

manded standardisation of each component. The production of components

called for proved drawings and specifications, machines, equipment, jigs, fixtures,

tools, measuring instruments, testing equipment and various other items in

addition to production disciplines and skills. We had no such production

base. Neither we nor anyone else in India had produced vertical high-speed

diesel engines in large quantities..........Being keen on putting our engines in

the market as early as possible, I wanted to cut short the time and efforts and

to reduce- the expenses. By signing the collaboration agreements, I saved

years of time and perhaps millions in costs of development." *

Klrloskar Brothers Limited entered into a collaboration with Suker Brothers

of Switzerland ** during 1958 to produce the power driven pumps. In the

* S.L.Kirloskar, 'Cactus & Roses' : An autobiography, (1982) Klrloskar Press, Pune 37,Page 117 to 119

•• Ibid. - Page 374, Sr. No. 5039

(53)

time the House of KIrloskars had established Kirloskar Pneumatic Company

Limited at Hadapsar, Pune.

In 1959, Kirloskar Press that was publishing the monthly magazine

"Kirloskar" at Kirloskarwadi, was shifted to Pune.

During the period of 1959-60 the nclworth of Kirloskar Brothers was Ite.

114 lakhs and Sales were Rs.l46 lakhs.

In 1961, considering the increasing demand for Kirloskar Products the

company shifted the activities of producing hand driven pumps that were used

by the farmers and the production of monoblock pumps at Dewas in Madhya

Pradesh State. In 1961, lOrloskar Brothers Limited entered in collaboration

with Tecumseh Products Co. Tecumseh, Michigan. U.S.A. * for the production

of Hermetically sealed compressors for refrigeration and air conditioning.

During 1962, the House of KIrloskars started a new company at Kothrud,

Pune. It was established under the collaboration with the Commins Engine

Company Inc., U.S.A. Therefore, It was called as Kirloskar Commins Limited.

In 1963, Kirloskar Brothers Limited, had entered into a collaboration

with Sulzer Brothers Limited of Switzerland ** for the purpose of exporting

the pumps produced by them.

• Ibid; Page 375. Sr.No.5040

** Ibid; Page 375. Sr.No.5041

(54)

During 1968, Klrloskar Brothers Limited started manufacturing the

Hermetically sealed compressors at Kirloskarwadi for the first time in its

history. In this year Klrloskar Brothers Limited was announced along-with

eleven other companies under the House of Kirloskars as the MKTP Companies

and were recorded under the Monopolies & Restrictive Trade Practices Act.

Klrloskar Brothers Limited started two separate divisions for manufac­

turing pumps and compressors at Dewas. The workload at Kirloskarwadi was

reduced considerable. It was possible to enter the new areas of business.

Therefore, during the same period I.e. in 1964 Klrloskar Brothers Limited

entered into a collaboration with Butler Machine Tools Company Limited, Mile

Throne Halifax Yorkshlne, U.K. * for the purpose of producing Planing and

Shaping machines. In the mean time, up to 1965, the House of Kirloskars

had established five different companies : Klrloskar Systems Ltd. at Bangalore

(1962), Pratlbha Advertising Company Limited at Pune (1962), Klrloskar

Consultants (Private) Limited (1963), Pune Industrial Hotels (1964) and Klrloskar

Proprietary Company Limited. (1965).

Klrloskar Brothers Limited entered Into three collaborations with foreign

companies upto 1965 It was producing motors, power driven pumps and

planing and shaping machines. Their sales amounted to 1^.667 lakhs and

networth was Rs.256 laklis.

* Ibid: Page 495, Sr.No.6660

(55)

In 1968, Kirloskar Brothers Limited took a review of the office depart­

ment to find out the problems the office staff was facing. It observed that

there existed a problem of communication in sales office, secretarial office and

the overall management of the business. Therefore, to facilitate the concen­

trated attention on the sale, secretarial and managerial activities, these offices

were shifted from Kirloskarwadi to Udyog Bhavan at Pune.

Because of the shifting of certain offices mentioned above at its head

office in Pune, it was thought to be the right time to expand at Kirloskarwadi.

Accordin^y in 1971, Kirloskar Brothers entered into a collaboration with Bullard

Company of White Consolidated Industries, Inc., 286, Canfield Avenue for the

production of Vertical Turret Lathes. *

Between 1971 and 1975, the business of Kirloskar Brothers Limited

prospered to a great extent. In 1970 the total number of employees on the

record was 5,060 with a networth and sales of Rs.374 lakhs and Rs. 1,418

lakhs respectively. In 1975, the employment increased to 5,163, networth to

Rs.560 lakhs and sales shot up to Rs.3,008 lakhs.

During October 1970, the company established a division at Karad for

the manufacturing of the Hermetically sealed compressors.

• Ibid: Page 491, Sr.No. 6661

(56)

In 1974, the company entered into another collaboration with the same

company ; Tecumseh Products, Michigan, U.S.A. * for the production of dif­

ferent types of Hermetically Sealed Compressors. This helped in producing

the modern compressors.

Kirloskar Brothers Limited exported its products such as pumps, valves,

compressors, grinding machines to different countries such as U.S.A., Japan,

Newzealand, Australia and some other countries in Europe.

During 1965 and 1975, the House of Kirloskars established different

companies as shown in the following table :

TABLE NO. 5LIST OF COMPANIES ESTABLISHED BY KIRLOSKARS

FROM 1965 TO 1975

Year ofEstablishment Names of companies

1966 Mahila Udyog Limited1969 Kirloskar Fertilizers Private Limited1969 Precision Tools Systems Limited

1970 Kirloskar Kisan Equipments Limited1971 Kirloskar Engineering Limited

1973 Kirloskar Overseas (Private) Limited

1974 Kirloskar Tractors Limited (was later on merged with KPCL)

By 1975, Kirloskar Brothers Limited had already entered into live col­

laborations with foreign companies.

In 1980, Kirloskar Brothers entered into collaboration with Tecumseh

* Ibid: Page 375, Sr. No.5040

(57)

Products, U.S.A.* again for the purpose of upgrading the technology for

hermetically sealed compressors upto 5 H.P. The total number of workers

now with Kirloskar Brothers Limited was 6,585 which was the highest employ­

ment figure. The networth was Rs.782 lakhs with the sales of Rs.4,750 lakhs.

In 1985, the number of workers on the roll was reduced to 4,563. The

networth increased from Rs.782 to Rs.908 lakhs. Total sales amounted to

Rs.6,773 lakhs. From 1985 to 1988 the business of Kirloskar Brothers Limited

further developed in terms of sales, profits, etc.. Sales shot up to Rs.9,131

lakhs and profits to Rs.201 lakhs.

By 1988, the company entered into foreign collaborations as shown in

the following table.

TABLE NO. 6FOREIGN COLLABORATIONS SINCE 1985 TO 1988.

Products Name of the Company

1. Canned Motor Pumps Nikkison Co. Ltd.

2. Japan Fire Fighting Pump sets Godva Fire Pumps Ltd. U.K.3. Christmas Tree Valves Oil Tools Specialities Co. U.S.A.

& Well-Head Assemblies

Source : (Sampada) July 1988 issue. Page 57, MCCI.

Today we find that Kirloskar Brothers Limited produces various products

such as power driven pumps, valves, metal cutting machines, grinding ma­

chines and hermetically sealed compressors. They exported their products to

the industrially advanced countries such as U.K., U.S.A., Japan, South East

* Ibid: Page 375, Sr.No.5043

(58)

Africa, New Zealand, Australia and some of the European countries. The

company has its own Hydraulic Research Centre for testing large size pumps

with a discharge of 10,000 litters per second requiring power of 1,850 KW

(2,500 H.P.). This laboratory has been recognised by the Government of India.

The company has a diversified range of products for manufacture. Therefore,

the company has been concentrating on improving the product quality and

service to customers. The company is planning to concentrate on the

manufacture of high technology products like canned motors, pumps, high

pressure valves, well-head assemblies and mobile lire flghllng pump sets, etc.

which will be in addition to the existing product line. The company also has

a programme to popularise the energy saving pump-sets to farmers and com­

pressors to refrigeration and air conditioning industries.*

So far as the major opportunities and challenges in 2000 AD are con­

cerned, they are supposed to be the following :

(i) Absorption and assimilation of computer technology application and other

automation in the existing lines of manufacture and related services to

achieve higher productivity and total customer satisfaction.

(II) To up grade their technologies to serve faster rate of growth in industries

and agriculture.

* "Sampada" MCCI, July 1988 Issue, Page 57.

(59)

(ill) The company might have to face the organised customer preferences,

choices and challenges. In many areas the existing seller's market might

be turned into buyers' market.

3.6 OBSERVATIONS

From the study of the history of Kirloskar Brothers Limited after 1952,

the following observations can be made :

(i) The company has adopted the policy of producing engineering products

and not to diversify into chemicals and electronics. The list of various products

developed by Kirloskar Brothers Limited is given in Appendix (7).

(ii) The company has entered into many collaborations with foreign compa­

nies. Table showing the list of foreign collaborations entered into by Kirloskar

Brothers Limited is given in the Appendix (2)

(iii) It appiears that the company has taken all pains to update the products

that it was producing. The company has adopted the latest techniques for

manufacturing its products. The company has kept itself at par with the

industrially advanced countries like U.K. and U.S.A..

(iv) The company has rightly directed its attention to customer satisfaction,

quality update and computerisation.

(v) While promoting the business of Kirloskar Brothers Limited, Laxmanrao

(60)

had thought of producing products that would be capable of competing with

foreign products. It appears from the study of the growth of Kirloskar Broth­

ers Limited thnt. the drcnm of Uixnmiirno has rome Into reality. The table

showing the list of companies under the house of Kirloskars is given in the

Appendix (1).

(vi) The future projects that the company has on cards are also well directed.

Ofcourse, only time will prove whether their forecasts were correct. However,

the past performance of Kirloskar Brothers Limited has shown that they do

take right decisions at right time. The company is aware of the latest and

future developments in the field of computers, automation, quality standards,

consumerism, customer satisfaction, etc..

(vii) The company has exported their products to the industrially advanced

countries.

(viii) By updating the technology in the Held of agriculture by providing pump

sets, ploughs, etc., the company has contributed materially to the development

of Indian agricultural methods.

3.7 BRIEF HISTORY OF KIRLOSKAR BROTHERS HERMETIC COM­

PRESSORS DIVISION, KARAD

This thesis studies the Vendor Development Project that is implemented

by Kirloskar Brothers Limited, Hermetic Compressors Division, Karad. There­

(6i:

fore, it is Important to know the background of this division.

The activity of manufacturing compressors was started at Kirloskarwadi

in 1966. However, the company was successful in manufacturing the first

compressor In 1968. For the purpose of this production, tlie company entered

into a technical collaboration with Tecumseh Products Company of U.S.A.

This foreign company is the world leader in compressor manufacturing.

Tecumseh Products Company, has two plants in U.S.A. It produces 30,000

compressors per day In each of these plants. This company has given its

technical knowhow to 14 different companies in the world. One of such

companies Is Kirloskar Brothers Limited. The collaboration between the

Klrloskars and Tecumseh lasted till 1980. In 1980, the Kirloskar Brothers

Limited entered Into another collaboration with Tecumseh Products Company,

for the purpose of upgrading Uie technology for hermetic compressors upto 5

H.P. units.

Kirloskar Brothers Limited has two plants for manufacturing the com­

pressors ; one at Dewas and the other at l^arad. The Karad plant is one of

the most modern and well equipped plants of the Kirloskars. Karad is a

beautiful town in South Maharashtra, 160 Kins. South of Pune on Pune -

Bangalore National Highway (N.H.4) and also on Pune Bangalore Railway Line.

In October, 1970 Kirloskar Brothers Limited opened this separate division at

Malkapur^ Taluka Karad, District Satara and shifted the compressors plant

from Kirloskarwadi to Malkapur (Karad).

(62)

The factory area of Hermetic Compressors Division, Karad, is spread over

6 hectare and 48 R. and the built up area is 7.768 sq.mts. The factory has

also acquired additional premises for the benefit of ancillary units which

supply compressor components to Karad division. This area is spread over 3

hectare and 96 R, and the built up area of the ancillary units is 4,251 sq. mts.

Sophisticated machinery and excellent facilities for research and devel­

opment are made available for producing hermetically sealed compressors at

the Karad plant. These facilities have helped the plant to achieve and maintain

a high standard of quality. It is able to mould the imported technology for

producing compressors to suit Indian conditions.

Compressor is an assembly line product. Nearly 80 difTerent parts are

assembled for producing a compressor. All these parts are packed in an air

tight cover. Once the compressor is sealed, it is not possible to change or

repair its components without breaking the compressor shell. Therefore, the

compressor design is made fault less and every care is taken for keeping it of

a high quality before sealing these components in the shell. Because of non­

leakage of gas, these compressors do not require any maintenance. Kirloskar

compressors are suitable for the Indian conditions and show a high degree of

performance at 180 and 260 volts of electric pressure. Manufacturing of the

hermetically sealed compressors is supposed to be a modem experiment in

the world. Compared to the other competitors, the Kirloskar compressors are

noise-less, durable, economical in electric consumption and maintenance. The

(63)

Karad factory produces 25 different models of compressors. Some of these

models are AJ, AJT, CAJ, AE, etc.. The list of such models is given in

Appendix (3).

Kirloskar Company strives for maintaining a high quality of various gadg­

ets that are used in the compressor. The standard of measuring the quality

of compressors are mentioned in Appendix (4).

The company has made a good progress since 1982-91. The following

table shows the number of compressors that the company has produced since

1982-91.

TABLE NO. 7TURNOVER OF KIRLOSKAR BROTHERS

HERMETIC COMPRESSORS DIVISION. KARAD.

Year Production (Number of Units)

Turnover * (Million of Rs.)

1982-83 34.603 46.849

1983-84 37.856 70.024

1984-85 41,885 92.787

1985-86 62.603 126.9911986-87 63.163 163.471

1987-88 75.511 221.2741988-89 1.05.194 296.8161989-90** 73.909 216.6681990-91 1.46.646 454.691

NOTES :

* Excluding Excise Duty & Taxes.

** For 8 months only (August 1989 - March 1990)

(64)

The above table reveals that the production of compressors has Increased

by 423.80% since 1982 to 1991. Similarly there is an increase in the turnover

(sales) of compressors by 970.10% during the same period mentioned above.

This progress Is highly remarkable and noteworthy. During 1982-83 the

company had suffered a financial loss of worth Rs. 15 millions. It is revealed

from the profit figures of March 1991 that the company has made a profit of

Rs.90 millions. Thus it can be concluded that the company has been success­

ful in transforming itself from a loss making unit to a profit making unit.

The progress the company has made since its inception at Karad, is the

result of the able leadership provided by experienced persons like Shri. P. D.

Gune (1968-74). Shri. V. G. Lele (1974-82), Shri. A. R. Kalluraya (1982-89).

At present Shri. M. N. Morab is looking after this factory in his capacity as

Vice-President. The names and designations of other olficers are given in

Appendix (5).

Karad factory provides various facilities to its employees. The examples

of these facilities are : Subsidized Medical Expenses to Workers and their

Families, Canteen Facility (food at subsidized prices), Research and Develop­

ment Centre. Training Hall, Quality Circles, Ancillary Industrial Estate for the

employees who wish to start their own business units under the Vendor

Development Project.

The company has a long list of more than 23 customers vide Appendix 6

(65)

For the purpose of meeting their needs the company has 12 offices and

65 dealers who are spread all over India. Klrloskar compressors have captured

nearly 54% of the total demand for the compressors in India.

It is generally believed that for the purpose of achieving higher standards

of production, additional number of employees are required. However, it is a

note worthy feature of Klrloskar Brothers Hermetic Compressors Division,

Karad, that they have been successful in increasing their turnover even after

reducing the number of employees. The folloAving table shows the number of

employees since 1982.

TABLE NO. 8NUMBER OF EMPLOYEES AT KARAD FACTORY

Year Number of Workers

1982 4001983 3841984 3691985 3481986 3051987 2991988 2951989 2831990 2801991 267

The above table shows that since 1982 till 1991, the number of employ­

ees has been reduced by 133. This reveals that there is a decrease in the

number of employees by 33% approximately over a period of 10 years. Thus

nearly 3% of the number of employees are reduced per year.

(66)

It Is important to note that this reduction in the number of employees

Is primarily due to the Voluntary Retirement Scheme and the Vendor

Development Projects that were launched in 1983 when Shri. A.R.Kalluraya

was officiating as the Vice-President of Karad factory.

Under the Vendor Development Project the Company has helped 36 em­

ployees either to start their own Job-work business or truck transporting or

some other business on their own. In this thesis the researcher has examined

this Vendor Development Project as implemented by this division.

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