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`Social responsibility vital for Tata Steel dealings'

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Mr B. Muthuraman, Managing Director, Tata Steel, and Mr B. Nataraj, President, Madras Chamber of Commerce and Industry (MCCI), at the chamber's 168th AGM in Chennai on Friday. - Shaju John

Chennai , July 2

TATA Steel, in future, will not deal with companies which do not conform to a certain minimum standard of corporate social responsibility.

"We will not either buy from or sell to companies" that do not measure up to Tata Steel's social responsibility standards, Mr B. Muthuraman, Managing Director, Tata Steel Ltd, said on Friday.

Speaking at the annual general meeting of the Madras Chamber of Commerce and Industry here, Mr Muthuraman said that for many years "we have been the global benchmark for corporate social responsibility." He added that the purpose of a company was to improve the quality of life in the society.

He said that a little later in the year, he would formally announce the company's guidelines regarding whom it would do business with.

He said that Tata Steel, a company almost written-off as dead 10 years ago, was today the subject of the most number of case studies in management schools.

Recently, the Harvard Business Review had selected Tata Steel as a case study in marketing.

"I am going to Harvard in August to make a presentation," Mr Muthuraman said.

Observing that the time had come for Tata Steel to go global, he said that the company was looking at acquisitions abroad.

On the current high prices of steel, Mr Muthuraman said that the spurt in prices was caused by a sudden surge in demand.

The sharp growth in demand caught the suppliers of raw materials (coal, pig iron) unawares, which resulted in a shortage and a consequent increase in prices of the raw materials.

The rise in demand for steel was caused by a shift in consumption of steel from developed countries to developing countries.

Developing countries, which have to use steel in building infrastructure, are now consuming more, he observed.

"The steel prices are very high and I don't like it," he said, adding that over a period of 2-3 years, the prices were bound to come down to around $350 a tonne. Today, steel prices in India are of the order of $525-550 a tonne.

He dismissed as "childish" the attacks on steel manufacturers, that they had formed a cartel to keep the prices high. Observing that there were about 1,500 producers all over the world, he said that it was impossible to cartelise in the steel industry.

The way to reduce steel prices, is not by asking manufacturers to drop prices, but by improving infrastructure, he said.

On the company's proposed Titanium di-oxide project in Tamil Nadu, Mr Muthuraman said that the project was on, but would take time.

"At present, we are drilling and taking samples," he said, adding that the project could come in about 2-3 years' time.

Pointing out that different commodities dominate the world scene at different times, Mr Muthuraman said that the metal of the future could be Titanium.

"We are seeding now, for that time," he said.

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