In the early 1940s, a young catholic priest with unorthodox ideas arrived at a corner of civil war-ravaged Basque region of Spain. After his initial trials and tribulations, the priest, Jose M Arizmendiarrieta helped to set up a series of successful cooperatives at Mondragon. Today 96 large cooperative enterprises are thriving in Mondragon, employing 70,000 people with an annual revenue of more than $14 billion. From home appliances to car parts, they produce a large range of products but the defining feature of these enterprises is their concern for their members – so, there was hardly any job losses even during pandemic and workers and the community come first here before large dividend pay outs of spectacular CEO salaries. This is the original stakeholder capitalism.
GTF Steel in Kerala’s Kozhikodde district is not quite a cooperative of the same variety but a novel experience no doubt. People from Kerala have been flocking to the Persian Gulf region, for job opportunities for decades now. The village of Thikkodi and areas surrounding it in Kozhikkode district were no exception. They mainly worked in the GCC countries – UAE, Kuwait, Bahrain, Qatar, Oman and Saudi Arabia. Faced with a job crisis in the Middle East and other difficulties associated with migration, they formed a social media group in 2015 – the Global Thikkodians Forum, GTF. This forum grew stronger over the years and in 2018, they decided to embark on a novel experiment.
Having spotted a demand-supply gap in Kerala market for steel pipes, they decided to set up a steel pipe plant. They needed Rs 18 crore for this venture and altogether 207 members came forward to invest. They formed a limited liability partnership company – GTF Steels for this purpose. The minimum investment required was Rs 1 lakh or two shares of Rs 50,000. 147 out of 207 investors put in that minimum investment. There was also a cap fixed on highest individual investment at Rs 40 lakh. That was not all, the company then decided to hire all workers strictly on the basis of professional qualifications and none of the 207 investors works in the company. The board is chaired by Mohammed Basheer Nadammal and led by CEO, Ishaq Koyilil – both hail from Thikkodi.
The factory has commenced commercial production in 2021 and the early success of this unique venture has encouraged the GTF to explore other commercial opportunities. After working for many years in the Gulf, an ordinary Kerala worker returns to his home to invest his small savings in real estate, tourism or other small ventures and often lose money but this is the first attempt to channelise their savings towards a professionally managed modern business venture. The GTF itself has now around 2000 members and they are now keenly eyeing other opportunities to expand their entrepreneurial foot prints.