Excerpt: Orchard to Chemical Company, the Journey of Berger Paints
‘This is where it all started’, says Kuldip Singh Dhingra, pointing to a black-and-white photograph on the wall of his study. It is a photograph of a well-to-do Sikh family, gathered in the front courtyard of their haveli (mansion), clearly in their Sunday best.
The patriarch sits in the middle with a look of pride on his face. He is surrounded by men and women of various ages – men standing with their chests out and smiling, women sitting meekly, some with their heads covered and looking, hesitatingly, into the camera.
Children of all ages are sitting at the feet of the elders. One can imagine the photographer, with his head and part of the camera covered with the black cloth, looking into the lens of the camera on a tripod. One can also imagine the photographer ordering the family to say ‘cheese’ so his photo would have smiling faces. It is difficult to determine whether the family complied. But the photograph certainly shows a family that looks happy.
Kuldip represents the fourth generation of the family in the photograph. He is the owner of Berger Paints, one of India’s largest paint companies. The co-owner of the company is his younger brother, Gurbachan Singh Dhingra, and together their holding of the company is 75 percent.
And when Kuldip says, ‘This is where it all started,’ he is speaking of the year 1898 when their great-grandfather and grandfather set up a paint shop in Amritsar. Though he and his brother had five uncles and four aunts and more than twenty cousins, Kuldip says they are the true inheritors of the original business. ‘My father inherited the 1898 shop and he continued the business. So we are the direct descendants of the family business,’ explains Kuldip.
Transition from an Orchard Business to a Chemicals Company
Today, Berger Paints calls itself a chemicals company that is engaged in the manufacturing of architectural coating systems, performance coatings, industrial coatings, construction chemicals and allied products. The genesis of the business, however, was quite different. ‘My greatgrandfather, Bhai Uttam Singh, was an orchard owner and a wholesaler of fruits,’ says Kuldip.
When Uttam Singh’s son, Bhai Kesar Singh, grew up, he wanted to diversify into some other business. ‘So how did your grandfather, Kesar Singh, decide to start a business in paints? What was the connection between paints and fruits and orchards?’ I ask Kuldip. ‘No one knows for sure,’ says Kuldip. ‘Those times were very different.’
The ‘UK’ Connection
They must have been! It was the late 1800s and all paint in India had to be imported. ‘The first factory to produce paints in India was started only in 1902 in Calcutta. It was the Shalimar Paints factory,’ says Kuldip as an aside.
‘So, our shop was started in 1898 in Amritsar and was called Bhai Uttam Singh Kesar Singh,’ says Kuldip. ‘The company was later called UK Paints.’ I ask Kuldip whether UK Paints had a British connection like British Paints even back then. He takes a sip of his green tea, closes his eyes for a bit, savours the taste and says, ‘No, no, no, UK has nothing to do with Britain. It is Uttam Singh Kesar Singh!’ The shop in Amritsar was named after Kuldip and Gurbachan’s great-grandfather and grandfather.
Uttam Singh Kesar Singh had a big shop in Amritsar. The family was wealthy and could invest in a large shop, which had three levels, to kick-start Kesar Singh’s business. A premium must have been paid for the location of the shop as it was in the old part of the city — right at the entrance (Darshani Deori) of Harmandir Sahib, the Golden Temple.
As the business took off, Kesar Singh realised that paints were the fastest-selling items in the shop and, therefore, decided to specialise only in the distribution and sales of the same. The paint business continued to do well and the family soon became known as the ‘rangwala family’.
Expanding the Family Business
The rangwala business prospered and in 1928, Kesar Singh bought his second shop, Kesar Singh and Sons, located in Hall Bazar, Amritsar. However, it is clear that the first shop is closer to Kuldip’s heart as he says, with pride, ‘When I joined the business, I used to sit occasionally in the first shop and sell paints.’
He is also proud of the fact that their grandfather built a successful business starting with just one shop. Though Kuldip and Gurbachan’s family inherited only the first shop, the second shop was also bought by their family much later from their uncles, who were not keen on the business. Their uncles had their paint shops in Mumbai and Delhi and were busy with their paintbrush-manufacturing business in Mumbai.
Kuldip and Gurbachan had five uncles, who, along with their father, were inducted into the family business by their grandfather, Kesar Singh. As and when each son grew up and showed the capability of managing a business by himself, Kesar Singh sent him off to a different city to expand the business.
The three older sons, Harbhajan, Harcharan and Kartar, were sent to Karachi, from where Harcharan and Kartar went off to London and Mumbai respectively. Kuldip’s father, Niranjan Singh, looked after the Amritsar shop but also spent time in Lahore. He later shifted to Delhi. Kesar Singh’s two younger sons, Chattar and Dalip Singh, were sent to Delhi. ‘But since they were much younger, my father was also given Delhi as part of his business and was made the bigger shareholder,’ says Kuldip. The fact that Niranjan Singh had a share in Amritsar and Delhi besides the Lahore experience proved fortuitous for him after 1947, when Lahore went to Pakistan.
‘Word of the Eldest was the Law’
The sons of Kesar Singh worked hard to grow their business of paint distribution and trading in their respective cities. Each of the sons had trusted professionals by his side to help him with the business. ‘My grandfather had always employed professionals in the business,’ says Kuldip, and adds that it was this group of professionals that was significantly responsible for the sustained growth of the business.
The business model was set by Kesar Singh and followed by each of his sons. ‘Our family culture was that the word of the eldest was the law,’ says Kuldip. This culture was present at Uttam Singh’s time and was passed on to each successive generation. ‘There was no way any of us could question the word of the elders,’ asserts Kuldip. Thus, when Kesar Singh decided that each business had to employ professionals, all his sons followed his advice.
The professionals inducted into the business were called ‘working partners’ and were given a share in the profit. The working partners did not invest any money in the business but worked as de facto CEOs to manage and grow the business. Over the years, the shareholding of each working partner reached as high as 20 per cent to 50 per cent in his respective business. It seems to me that this was one of the earliest models of profitsharing, set up in the early 1900s for professional managers!