Tata Steel: Difference between revisions

TATA Steel (formerly TISCO)

File:Logo of Tata Steel.gif
Company type	Public
Industry	Steel
Founded	1907
Headquarters	Jamshedpur, India
Key people	Ratan Tata, Chairman of the Board, Mr. B Muthuraman, MD
Products	hot and cold rolled coils and sheets, wire rods, construction bars, pipes, structurals and forging quality steel
Revenue	USD 3.66 billion
Website	http://www.tatasteel.com

Tata Steel, formerly known as TISCO (Tata Iron and Steel Company Limited), is India's second largest steel company (slated to become largest should it in succeed in its proposed takeover of Corus). It was established by Indian Parsi businessman Jamsetji Tata in 1907 (he died in 1904, before the project was completed). Tata Steel produces 9 million tonnes of steel annually. Its main plant is located in Jamshedpur, Jharkhand, though with its recent acquisitions, the company has become a multinational with operations in various countries. The registered office of Tata Steel is in Mumbai. In the year 2000, the company was recognised as the world's lowest-cost producer of steel. The company was also recognised as the world's best steel producer by World Steel Dynamics in 2005. The company is listed on BSE and NSE.

Tata Steel's turnover in fiscal 2005-06 was Rs 17,144 crores (consolidated turnover was 22,518 crores). The company's operating profit (PBT) in the same year was Rs 5,932 crores while its PAT was Rs. 3734.62 crores; it produced a record-breaking 5.0 million tonnes of salable steel in its Jamshedpur works that year.

Management

Ratan Tata is the Chairman and B Muthuraman is the Managing Director of the company. Dr. Tridibesh Mukherjee and Mr. Arun Narayan Singh are Deputy Managing Directors of the company.

Tata Steel is a limited company registered in India under the Companies Act, 1956.

Recruitment of officers to Tata Steel was traditionally done mainly through the erstwhile Tata Administrative Service (TAS) test. With changing times, the TAS was abandoned for more contemporary methods like campus recruitments at the entry level and direct recruitments at the middle and upper management levels. The company has an internal rating system to distinguish five levels of management from IL1 (top management) to IL5 (managerial). Management consultancy provided by firms like Arthur D. Little and Booz Allen Hamilton in the late nineties led the company to adopting a more "flat" hierarchical structure and completely revamping of its supply chain, process and vendor management systems. However, the company continues to cherish loyalty to the Tata Group and most officers in the senior-most management positions are those who have spent most, if not all, of their career with either Tata Steel or the Tata Group. The Tata Group distinguishes itself from other business houses by laying strong emphasis on employee welfare and social upliftment in each of their enterprises and all companies in the Tata fold pledge to these principles and pay royalty to Tata Sons Ltd for using the "Tata" logo.

History

Tata Steel is known for its "employee and social welfare" management practices since inception. It introduced an 8-hour work day as early as in 1912 when only a 12-hour work day was the legal requirement in Britain. It introduced leave-with-pay in 1920, a practice that became legally binding upon employers in India only in 1945. Similarly, Tata Steel started a Provident fund for its employees as early as in 1920, which became a law for all employers under the Provident Fund Act only in 1952. Tata Steel's furnaces have never been disrupted on account of labour strife and this is an enviable record of sorts.

In an industry infamous for its cyclic nature and a history of rise and fall of economies pivoted on steel, Tata Steel has managed to adapt itself to every circumstance, including challenges of rapid technological change, to retain its strategic dominance in the Indian market and to finally evolve into an multinational with aspirations for a global positioning. Tata Steel's antiquity dates to the time when it used to supply special steels to the Allied Forces for manufacturing rails, combat helmets and jerry cans. [1]

Social causes

Tata Steel has been committed to social causes and is responsible for the running of Jamshedpur through the Jamshedpur Notified Area Committee (JNAC). It manages the municipal and all other civic services and amenities for the township of Jamshedpur and has been given the ISO 14000 Environment Management System Certification, the first in the country. The State Government of Jharkhand has recently upgraded Jamshedpur town's status to enable it to supplant JNAC with a municipality. This move has been publicly condemned by the citizens of Jamshedpur and, in all likelihood, may not be implemented.

Current and future plans

Tata Steel is rapidly expanding its production capacity and plans to produce 25 MTPA (million tonnes of steel per annum) by 2015 [2]. It acquired Singapore's NatSteel in August 2004, which added 2 million tonnes to its installed annual capacity. Tata augmented its steel making capacity in Jamshedpur by 1 MTPA in September 2005 [3]. In February 2005, Tata Steel acquired the steel-making operations of Singapore’s NatSteel Ltd., winning access to its operations in seven countries, including two steel processing plants in China and a capacity addition of 1.7 MTPA. In the same year it acquired Thailand’s Millennium Steel PCL that also had a capacity of 1.7 million tonnes p.a. [4]

Tata Steel's greenfield projects included proposals to setup a 6 MTPA plant in Kalinganagar, Orissa, a 12 MTPA plant in Tontopossi, Jharkhand, a 5 MTPA plant in Chattisgarh in addition to plants in Bangladesh and Iran. Of all these projects, only work at Kalingangar is presently underway despite some controversy relating to agitation by tribals in the area. The project in Bangladesh is presently mired in disputes related to the pricing on natural gas. Officially, however, Tata Steel remains committed to all these projects. Another 2.4 MTPA augmentation of capacity has been taken up in the existing Jamshedpur works (to be completed by 2008).

Tata Steel is also scouting for coal blocks in Australia [5] and iron ore mines in South Africa to meet its increasing requirements. It has already acquired coal equity in Australia.

Corus takeover

On October 20, 2006, Tata Steel announced that it had agreed to pick up a 100% stake in the Anglo-Dutch steel maker Corus Group at 455 p. per share in an all cash deal, cumulatively valued at GBP 4.3 billion (USD 8.04 billion). Some analysts expect this move to spark a takeover war, especially from Russian and other European steel makers in the near future [6]. According to BBC, Corus has confirmed it is accepting a £4.3bn ($8.1bn) takeover offer from Indian rival Tata Steel. If approved by Corus shareholders, it would create the world's fifth-biggest steel firm. [7]

On November 19 2006, the Brazillian steel company CSN launched a counter offer for Corus at 475 pence per share, valuing it at $8.4 billion.

On December 11 2006, Tata preemptively upped the offer to 500 pence, which was within hours trumped by CSN offer of 515 pence per share, valuing the deal at $ 9.6 Billion. The Corus board promptly recommended both the revised offers to its shareholders.

Forbes Global 2000 ranking

The Forbes Global 2000 list for the year 2005 ranked Tata Steel at 1,142.

See also

• List of steel producers
• Steel Authority of India Limited, India's largest steel producer