When I started writing for the magazine I worked for in Chennai way back in the 1980s people used to wonder how long I would last. The reason was, very few businessmen were willing to talk to the media. They did not want to draw attention to themselves. The city and the state were seen as arch conservative and growth averse. As I have said again and again over the years, this was far from the truth. Let me write about some of the interesting companies of those times.
Not that all of them did well, but they tried.
Today wind energy is taken for granted in Tamil Nadu as many units have come up on the coastal belt. One of them was NEPC (Natural Energy Processing Company) which thought big. In 1986, two cousins in their early twenties, Madhusudhan and Rajkumar, thought of non-conventional energy for power-starved Tamil Nadu. This was still a comparatively little known concept.
They started attending seminars and symposiums to understand non-conventional energy sources. They subscribed to journals dealing with the subject. They zeroed in on wind energy and found the western part of Tamil Nadu an ideal location.
The first product manufactured by the company was a windmill capable of pumping water which was developed by the government of India’s Department of Non Coventional Energy. Perennial powercuts and spiraling diesel prices made this product attractive to farmers. The marketing team used to visit the panchayats all over the country to introduce this windmill. Originally it was meant only for the farmers. They installed machines on credit and the NEPC windmills became popular.
The cousins decided to harness this technology to the power sector as well. They tied up with MICON of Denmark, a world leader in this product. In 1989, it got it’s first order for six machines from Gujarat. It took up the job and got it done within six months without a hitch. It did a major project for Tamil Nadu as well. With the MICON tie up, the company’ s turnover zoomed up to Rs 50 crore by the 90’s on a capital of Rs 5 crore, which was very respectable for those days.
NEPC was the first company in the private sector to commercialise wind energy. It was also the first company to do so in Asia. It set up six turbines in Sivakasi. Many orders followed. It started doing every project on a turnkey basis. Its windmills were designed to withstand adverse wind conditions, high temperatures, tropical climate, high humidity and corrosion.
The company identified the correct spot to set up the windmill for its customers, erected the wind towers and turbines, maintaining and transferring the power to the grid. There were no shortage of orders.
It was a good time for wind energy business. The cost of production was low, only 40 paise per unit, there were exemptions on sales and excise tax and many such concessions making a lot of companies jump into this business.
NEPC did not anticipate competition. They really thought growth will be unending. The owners imagined themselves to be Ambanis of Tamil Nadu and ended up making many mistakes.
To start with, the company went into all kinds of diversifications which were capital intensive businesses in which they had no experience. After liberalisation, anybody could start an airline and NEPC launched NEPC Airlines, which was a disaster almost from the beginning. They started a television channel which never took off. They took over all kinds of businesses they fancied.
What they did not anticipate was that the government was going to withdraw all the concessions they gave to wind power sector. NEPC thought the good times will never end.
That was a major blunder. The state felt that having helped set up the wind power business and put it on its feet it was time it withdrew. Having grown entirely on goverment concessions, NEPC went broke and officially wound down in 2011.