Competing well globally

Interview with Sanjay Choudhry, Head, Corporate Communications, Tata Steel.

"After several years of consolidation, Tata Steel plans to grow in several directions, which will help it create more wealth for the nation and sustain its aspiration to being an EVA+ company on a continuous basis," according to Sanjay Choudhry, head of corporate communications, Tata Steel. In an e-mail interview to Suhrid Sankar Chattopadhyay, he said Jamsetji Nursserwanji Tata and J.R.D. Tata had laid special emphasis on social contributions of organised business. Accordingly, Tata Steel will commemorate the death and birth centenaries of the two by focussing on community initiatives in Jamshedpur and other locations of the company. Excerpts:

This is the centenary year for the Tatas in more ways than one. How do you plan to celebrate the occasion?

The Tata Group is passing through a historic year. Very few companies even at the global level enjoy this privilege of celebrating two birth centenaries. This year, 2004, Tata Steel is celebrating the birth centenaries of two stalwarts of the Tata House and doyens of Indian industry - J.R.D. Tata, who was conferred the Bharat Ratna, and Naval H. Tata, who was awarded the Padmabhushan. This year also marks the death centenary of our founder and visionary, Jamsetji Nusserwanji Tata. Jamsetji believed that meaningful political freedom could come only when supported by economic independence. He set up industries that are now known as core sector industries - steel and power. He also set up the Indian Institute of Science, Bangalore.

Tata Steel, with which J.R.D. Tata was directly associated as its chairman for almost five decades, has planned to celebrate his birth anniversary by observing the 29th of every month [JRD was born on July 29] in a special manner. As both J.N. Tata and J.R.D Tata laid special emphasis on social contributions that organised business should make, we have decided to celebrate the centenary in a manner that will focus our attention on community initiatives in Jamshedpur and in our out-locations, such as mines, collieries and other manufacturing bases in the country.

Some of the big initiatives during the year will be the setting up of an athletics academy, conducting a national half-marathon and health, eye treatment and diagnostic camps for rural women, promoting adventure programmes among students and other activities that will showcase the company's commitment to the ideals of these great men. Tata Steel is also close to completing 100 years of successful existence.

What are Tata Steel's expansion plans?

After four phases of modernisation, starting from the 1980s, during which we invested Rs.7,000 crores in state-of-the-art manufacturing facilities, Tata Steel can boast of being the youngest steel plant in the world at age 97. Today it has a rated capacity of four million tonnes. But as Tata Steel obtains much more than the rated capacity year after year, we hope to produce about 4.3 million tonnes this year. The Indian economy is healthy and growing at a robust speed. Thus there is a greater need for steel, and Tata Steel sees this as an opportunity. To begin with it will expand its capacity by a million tonnes. The project to achieve this is progressing on schedule. Tata Steel plans to go up to 7.5 to 8 million tonnes by 2007-08 and has already decided to double its capacity by adding another 7-8 million tonnes outside the Jamshedpur location, including in other countries, by 2010.

Could you tell us something about the current projects and also about the Jamshedpur Utility and Services Company (JUSCO)?

After several years of consolidation, Tata Steel has earned the right to grow. It plans to grow in several directions, which will help it to create more wealth for the nation and sustain its aspiration of being an EVA+ company on a continuous basis. Tata Steel plans to set up a Ferro Chrome project with a 0.12 mtpa capacity in South Africa and a titania project in Tamil Nadu. The prospecting licence for the titania project has been received and techno-economic feasibility study consultants have been appointed. Tata Steel also plans to set up a 0.6-mtpa capacity coke plant in Haldia [West Bengal] and participate in a port project at Dhamara in Orissa. JUSCO has been set up to enable Tata Steel to step out of its non-core activities and focus directly on its steel business. JUSCO will be able to concentrate on activities related to providing the best quality of municipal services to its customers, initially in Jamshedpur, and subsequently in other cities. It is hoped that with this arrangement both JUSCO and Tata Steel will achieve greater operational efficiency.

How prepared is Tata Steel to take the company into the global market in terms of plant, machinery, organisation and human resource?

Tata Steel's strength lies in anticipating changes in the global market economy and in its ability to listen to the voice of its stakeholders. Thus when the economy was being globalised and liberalised, Tata Steel first expanded its capacity, then made rapid moves to attain customer focus, and is now ready to enhance the market share of its products by branding them. The branding exercise at Tata Steel has helped it decommoditise steel and reduce the company's dependence on market forces for its turnover. The international automobile industry is highly price sensitive and is willing to source steel from any part of the globe to remain competitive. In India, there has been a boom in the automobile sector. Tata Steel, in spite of smaller volumes, has competed well in this sector. Major auto players such as Maruti, Hyundai, Honda, Ford India, Toyota, Tata Motors and Bajaj purchase steel from us. Tata Steel is also supplying to Malaysian car manufacturer Proton. Multinational white goods makers are also sourcing steel from Tata Steel.

In terms of organisation and human resource, Tata Steel compares with the best in the world. Its manpower is no longer skill-oriented but knowledge-oriented. Tata Steel has thus been adjudged one of the foremost knowledge-based corporates in Asia. Studies by Hewitt Associates have indicated that Tata Steel is at the top as an employer in India and has the best business leaders at the Asia-Pacific level. The company is now in the process of establishing manufacturing facilities in various parts of the world and in due course will become truly global.