Indian tycoon plans a revolution

The country’s richest man plans a transformation by building new cities, writes Dean Nelson from Mumbai
Tesco, Wal-Mart and other western giants might be squaring up for a fight with his Reliance group for the Indian retail market, but he seems unconcerned.

His Reliance Industries is now India’s largest company, with a market value of more than $35 billion (£19 billion). The company’s share price has risen 15% since the split in January, and his plans for a social and business revolution in India’s two biggest cities and their agricultural hinterlands have the blessing of a government that sees him as a favourite son.
Ambani’s plans to establish a $5 billion subcontinent-wide chain of supermarkets are ambitious enough — he wants to have 784 branches in India’s smaller cities before opening in the 10 biggest metropolises. But they hide the real scale of his vision. He wants to build a demonstration model of what India could be like and start a revolution in the relationship between its cities and the countryside.

Ambani is creating two new cities, each with 5m people, on the outskirts of Delhi and Mum- bai. The $11 billion schemes will have reliable power supplies, railways, modern schools and hospitals, sewerage systems, and thousands of new jobs provided by foreign investors and manufacturers — things that many of India’s dirty, smelly and chaotic cities lack.
According to Ambani, the model emerged from the approach of his father Dhirubhai, who started a textiles company with $1,000 he had saved as a teenager working as a petrol-pump attendant in the Gulf in the 1950s. The company grew rapidly, before Dhirubhai decided to gamble on India’s poor. He opened a polyester plant with a capacity of 10,000 tonnes when India’s demand was only 6,000 tonnes, saying he believed “polyester is the fabric that will enable Indians to clothe themselves”. Reliance is now the world’s largest polyester producer
Ambani believes India must learn from China, but retains a demographic advantage over its neighbour, where families can have only one child.

“It will become old before it becomes rich. India will get rich before it gets old,” he said.

SANDEEP KUMAR SAH
PGDM 1ST SEM
(2009-2011)