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THE REASON FOR PICKING TATA STEEL• It is Asia’s first and India largest steel company in private sector.• It is India’s 2nd largest and 2nd most profitable company in private sector.• HR practices
Overview Of Tata Steel1907: Tata Iron and steel company was formed in MumbaiPlant was settled at Vill: sakchi (Presently known as Jamshedpur)Key People: Ratan Tata (Chairman) B. Muthuraman (Vice-chairman) H.M. Nerukar (Managing Director) Adress Line:Major Production: • Hot and cold rolled coils and sheets Tata Steel Limited • Wire and rods Bombay House, • Construction bars 24, Homi Mody Street, Fort, Mumbai 400 001. • Pipes Phone : (022) 6665 8282 • Structural and forging quality steel Fax : (022) 6665 7724/6665 7725 E-mail : firstname.lastname@example.org Website : www.tatasteel.com
Vision & Mission StatementVISION: We aspire to be the global steel industry benchmark for Value Creation and Corporate CitizenshipMISSION: Consistent with the vision and values of the founder Jamsedji Tata, Tata Steel strives to strengthen India’sindustrial base through the effective utilization of staffand materials. The means envisaged to achieve this are high technology and productivity, consistent with modern management practices.
Deep Rooted HistoryFoundation Consolidation Expansion1868-1931 1932-1989 1990 onwards 6
1874 Central India Spinning, Weaving and Manufacturing Company1902 TAJ MAHAL PALACE AND TOWERS1907 TISCO, TATA LIMITED IN LONDON1910 TATA ELECTRIC COMPANIES1911 INDIAN INSTITUE OF SCIENCE1912 EIGHT HOUR WORKING DAYS1917 TATA OIL MILLS 7
Consolidation• The Tata group ventured into new areas and built on the foundations, in spite of the restraints imposed by a controlled economy. 8
1932 TATA AIRLINES1939 TATA CHEMICALS1945 TATA ENGINEERING (TELCO)1952 LAKME WAS LAUNCHED LATER SOLD TO HUL1954 VOLTAS1962 TATA FINLAY AND TATA EXPORTS1968 TCS 9
Expansion• The liberalization of the Indian economy unleashed a period of remarkable growth for the Tata group, in India and worldwide.• Tata ventured in to mergers and acquisitions in the late 1990s. 10
Major Mergers & AcquisitionsSource: Goldman, M 2007 11
Major Plant Location (In India)Company’s Steel Works and Tubes Division .. ….…..….Jamshedpur (Jharkhand)Bearings Division ……………………..……………… Kharagpur (West Bengal)Ferro Manganese Plant ..................................................................... Joda (Orissa)Charge Chrome Plant ………….…………………………….. Bamnipal (Orissa)Cold Rolling Complex ……………………..……….…... Tarapur (Maharashtra)Mines, Collieries & Quarries ……..…States of Jharkhand, Orissa and KarnatakaWire Division ………..…………………………………………………. Borivli Tarapur (Maharashtra) Bangalore (Karnataka)Agrico Plant …………………………………………. Indore (Madhya Pradesh)
Going Global 2000-05 2005-06 Green Fields Tata Motors – Daewoo HV Tata Chem – Brunner Mond Tata Tech - INCAT IHCL - The Pierre Tata Tea - Tetley Tata Tech - Cedis TACO – Wundsch WeidingerVSNL - Tyco Global Network Tata Chem - IMACID Tata Interactive – Tertia Edusoft Tata Steel – Millennium SteelTata Tea- Good Earth Tata Motors – Hispano Carrocera VSNL - Teleglobe IHCL – Blue Zambia: Bus body building plant: Tata Zambia South Africa: Ferro Chrome Plant: Tata Steel TCS - Comicrom Second National Operator: VSNL Tata Steel – NatSteel Uganda: Coffee plant: Tata Coffee Tata Steel – AMCI Bangladesh: Steel Plant; Tata Steel TCS- Financial Network Services Fertiliser Plant: Tata Chemical Power: Tata Power
INVESTMENTS• NATIONAL • INTERNATIONAL JHARKHAND SOUTH AFRICA CHHATTISGARH AUSTRALIA ORISSA MOZAMBIQUE - KALINGANAGAR IVORY COAST -DHAMRA PORT (W.AFRICA) TAMIL NADU OMAN VIETNAM
Project And Operation: InternationalThe Tata Steel Group’s growth andglobalization strategy is driven by itsbusiness expansion while maintainingprofitability and mitigating risks. The TataSteel Group over the years has focused onenhancing raw material security andannounced major joint ventures in variousparts of the globe.Operation InOther CountriesAre……•Singapore • South Africa• Thailand • Australia• Vietnam • Canada• Oman • United Kingdom• Ivory Coast • The Netherland• Mozambique
Share Holding Pattern 1% Indian Promoter 21% Mutual funds/UTI 33% Financial institutions/Banks Central Govt./State Govt.3% Insurance company FII 16% 4% Bodies corporate 0% 22% 0% Individuals
OTHER ISIN FOR GDRs, FCCBs, CARs..STOCK EXCHANGES SECURITY ISINLuxembourg Stock Exchange GDRs US87656Y1091 London Stock Exchange GDRs US87656Y4061 Singapore Exchange CARs XS0315783026 Singapore Exchange FCCBs XS0466930780
Bankers Of Tata SteelState Bank of India……………………………………Rs 3500.00Axis Bank……………………......................................Rs 1000.00HDFC Bank……………………………………………Rs 650.00IDFC……………………………………………………Rs 199.00Deutsche Bank………………………………………….Rs 300.00Canara Bank……………………………………………..Rs 22.56Standard Charted Bank…………………………………Rs 205.00 * Data collected from Annual Report 2009-10( Rs in Crore)
Contingent LiabilitiesGuarantees The Company has given guarantees aggregating Rs. 622.37 crores (31.03.2009 : Rs. 930.97 crores) to banks and financial institutions on behalf of others. As at 31st March, 2010 the contingent liabilities under these guarantees amounted to Rs. 622.37crores (31.03.2009 : Rs. 930.97 crores).
Continue……• Uncalled liability on partly paid shares and debentures Rs. 0.01 crore (31.03.2009 : Rs. 0.01 crore).• Bills discounted Rs. 332.03 crores (31.03.2009 : Rs. 497.90 crores).• The Company was given by Tata Sons an option to sell 52,46,590 equity shares in TTSL (Tata Teleservice Ltd.) to the SP (Strategic Partner-Inc. of Japan, as part of a secondary sale of 25,31,63,941 equity shares effected along with a primary issue of 84,38,79,801 shares by TTSL to the SP. In 2008-09, the company realized Rs. 60.91 crores on sale of these shares resulting in a profit of Rs. 49.77 crores.
Jharkhand LEASE IssueTata Steel (Tisco) wants the Jharkhand government to amicably settle the issue of renewal of itslease on the 12,708 acres of land here.The company wants to sit down with the government and discuss all issues relating to the renewalof the lease.The Jharkhand government ,department of revenue & land reforms was laying down someimportant conditions for renewal of the lease, citing certain violations of the original lease terms.Among the conditions being talked about is the governments eagerness to realise Rs 5,900 crorefrom the company for the latters "failure" to realise dues from sub-leasees at the new rates fixed in1997.The government has said that there had been 18 violations of the original lease agreement. "Theparties should sit and discuss such things, They cant hold up renewal of the leaseTiscos lease on the land expired on December 1995. Since then its renewal has been hanging fire.The Bihar government had leased out around 12,708 acres of land for 100 years to Tisco onJanuary 1, 1956, providing that the lease will come up for renewal at the end of 40 years.
Maoist Problem Impacts Tatas Jamshedpur BusinessExpressing concern over the continuing maoist problem ,the problem was impacting itsbusiness in JamshedpurTrain services between Kolkata and Jamshedpur were being irregular for the past 50days and the night services were suspended.While the companys production was affected due to irregular train services, suppliersand customers were hesitating to come to Jamshedpur, and that was affecting business,he said.Suppliers and customers were reluctant to come to the eastern region and were insistingon having meetings held either in Delhi or Mumbai or elsewhere, he added.The gap between the eastern region and other parts of the country was widening, andsaid that his organisation might not get the required number of work force if the situationcontinued. However, he hoped for early resolution of the problem.
Vietnam to help solve Issues of TATAVietnam Prime Minister Nguyen Tan Dung assured the visiting Indian Finance MinisterPranab Mukherjee that issues related to land acquisition for the proposed $5 billionintegrated steel plant by Tata Steel would be resolved soon.Mukherjee during his meeting with the Vietnamese prime minister said that the plant hasthe potential to become a symbol of strategic partnership between the two countries. Heurged Vietnam to ensure that a level playing field is provided to Tata Steel and that thereis no discrimination against Indian investment.There were reports that the land allotted to Tata Steel for its planned 4.5-million-tonneplant in Ha Tinh province was in danger of being given away to Taiwanese or Chinesecompanies and that local authorities were creating hindrances in allotment of analternative site.Nguyen told Mukherjee that he has already asked concerned officials to resolve thematter at the earliest.
Tata Steel in EuropeThe European operations of Tata Steel (formerly known as Corus) compriseEuropes second largest steel producer.With main steelmaking operations in the UK and the Netherlands, the companysupplies steel and related services to the construction, automotive, packaging,material handling and other demanding markets worldwide.The combined group has an aggregate crude steel capacity of more than 28million tonnes and approximately 80,000 employees across four continents.
Tata Steel and Rio Tinto sign agreement on HIsarnaTata Steel and Rio Tinto have signed a licensing agreement to further support technological andcommercial development of the environmentally friendly direct iron smelting process called HIsarna.The agreement covers how both parties will work together, sharing their existing knowledge of the twotechnologies that are combined in the new process. It also covers how benefits from future successfulmarketing of the technology will be made available to both parties, as well as to the members ofUlcos, the consortium of European steelmakers in whose name the project is being carried out.SECURING COAL SUPPLIESTata already has a stake in Riversdales Benga coking coal project in Mozambique with an agreementto buy supply from the mine.Under Australian rules, Tata and CSN can continue to increase their stakes in Riversdale by 3 percentevery six months without being forced to make a full takeover offer.The two companies would probably like to see Rio Tinto, with deeper pockets and more technologicalskills than Riversdale, developing Riversdales Mozambique mines and infrastructure, analysts said.At the same time the steelmakers might want the coal mine to remain out of Rios hands, becausethey do not want coking coal supplies to come under as tight a control as iron ore, where supplies arelargely controlled by three miners, including Rio.
ACQUISITIONS AND MERGERS OF TATAWith the takeover of two British automobile marquees Jaguar and Land Rover, the $28.8billion Tata group, with 98 companies in its fold, will add another prominent entry to itsgrowing roster of global acquisitions.Barely a year ago, it paid over $12 billion to acquire Anglo-Dutch steel maker Corus, inwhat remains the largest buy-out deal overseas by an Indian company till date.The holding arm of the group that has 27 listed companies - maintain, the appetite forsuch mega mergers and acquisitions is only growing with each deal.Tata Steel has made three major acquisitions worth some $13 billion in the past fewyears.
Tata Steel signs definitive agreement with SSI for sale of TCPTata Steel UK Limited (Tata Steel) has signed a definitive sale agreement to sell certainassets of Teesside Cast Products (TCP) to Sahaviriya Steel Industries UK Limited (SSI), asubsidiary of Thailand’s largest steel producer, in a deal valuing the business at $469million.The agreement is the most significant achievement in the 22 months since Tata Steelbegan an exhaustive search for an alternative future for TCP, after the illegal withdrawalby a consortium of offtakers from a 10-year supply agreement. Both parties have worked hard since August to reach a successful outcome on what hasbeen a complex negotiation. This is a significant inward investment by SSI which will helpto sustain the 700 jobs at the plant and create new ones at the site and the wider localeconomy.The deal will also result in Tata Steel and SSI entering into a joint venture to operateRedcar Wharf (TCP’s bulk terminal), giving Tata Steel the flexibility to use Teesside toserve its other steelmaking operations, while also meeting SSI’s requirements onTeesside.
Tata SteelThe company, which celebrated its centenary in August last year, wants to boost itsannual output of 8.7 million tonnes to 15 million tonnes by 2010, and take it upwards to30 million tonnes by 2030. More stunning moves on the mergers and acquisition frontcan definitely be expectedIn January 2007, the group pulled off Indias biggest ever takeover of an overseascompany to buy Anglo-Dutch steel-maker Corus in a $12 billion deal that made it thecombined entity the worlds fifth largest producer of the commodity.This came just over a year after it acquired Singapores NatSteel, which also has apresence in Thailand, China, Malaysia, Vietnam, the Philippines and Australia followedby the acquisition of Thailands Millennium Steel for a $421 million.
Tata Steel greenfield project in Iran on hold?Tata Steel said that it was working on “some issues” pertaining to the undertaking. Thereports attributed the decision to put the project on hold to political uncertainty and largergeopolitical concerns.Earlier, Essar Group had dropped plans to develop an oil refinery in the Persian Gulfnation. Tata Steel has put its 3 million tonne a year greenfield steel project in Iran onhold because of political uncertainty.The decision has been made for reasons not related to business, but larger geopoliticalconcerns. Activities on the Iran project have been at a complete standstill for twomonths.Tata Steel signed a memorandum of understanding (MoU) with the Persian Gulf SpecialEconomic Zone last year for land and other infrastructural facilities in the SEZ at BandarAbbas, the Metal Bulletin said.Under the MoU, Tata had agreed to set up a direct reduced iron-based steel plant withan annual capacity of 3 million tonnes and this could be scaled upto 5 MT. The Iranianproject was supposed to be owned by a Tata Steel subsidiary, with the entire productiontargetting the export market.
Govt must act together on WTO issues.Indian steel producers, consumers and the government should report "aberrantbehaviour" to seek redressal of trade-related issues within the ambit of the WTOsystem.Concerted efforts of the state, producers and consumers are needed to tackletrade-related problems. Sustained vigilance and preparedness on the part of allthe interested parties and a proactive administration hold the key to the solutionsof such threats. To advocate and enforce the rights of the affected parties, full useof WTO forum would be made.In the domestic market, the steel industry faced increased competition fromcheap imports from countries with highly depreciated currencies... resulting inintense pressure on domestic prices. The problem has been further accentuatedby large-scale replacement of prime imports by low-priced imports of non-standard defectives posing a grave threat to producers and users of steel alike.
Conclusion• After conducting an in depth study of one of India’s most admired companies, we find that the company has many strengths and opportunities which it may capitalize on to truly become a world leader in steel making along with setting high standards for corporate citizenship and social responsibility towards a long term sustainable growth. 35