The Hindu Business Line : Tata Steel outlines ‘vision’ 2012

Tata Steel has outlined its “vision” for 2012 which entails, among other things, doubling of returns on investment (ROI) from around 16 per cent at present to 32 per cent by that year. By 2012, the group hopes to be the “global steel industry benchmark for value creation and corporate citizenship,” according to Mr B. Muthuraman, Managing Director of Tata Steel.

Addressing newspersons on the sidelines of the Tata Steel Founder’s Day celebrations here today, Mr Muthuraman said the “Vision 2012” has been co-created by the group’s manpower resources in Jamshedpur, South-East Asia, the UK and the Netherlands. Besides doubling of the ROI and value creation, the vision also envisages safety and environmental aspects and the Tata Steel Group’s aspiration to become an “employer of choice.”

According to him, Vision 2012 also involves strong focus on greenfield projects and brownfield expansions. “We will focus on reducing the implementation time of projects and improve the product mix as well as cost efficiencies,” he said.

Re-engineering and restructuring work was under way in two Corus plants, he added. Branding and achieving synergy with Corus were also priority areas as was the need to achieve self-sufficiency in coke in the UK. All efforts would be made to source cheaper raw materials, he said. Mr Muthuraman said the product mix of the Tata Steel Group would comprise more of auto grade steel, skin panels, special rods, HR auto structurals and steel for high carbon applications.

Speaking on the occasion, Mr Philippe Varin, CEO of Corus, said $300 million was being invested on a new CR mill and galvanising plant at Corus’ Ijmuiden facility in the Netherlands. The idea was to emerge as a “leading player in the automotive steel business”. In addition, an investment of $260 million was being made at Corus’ manufacturing facility in the UK, where rails up to 105 m in length would now be manufactured. Initiatives have also been taken to upgrade production of tyre cords.

Mr Varin said these initiatives were part of the Tata Steel Group’s desire to focus on value creation rather than be in the volumes game. With renewed focus on performance improvement and margins, Corus was committed to creating incremental value “of $600 million year-on-year.”

Asked if the target of doubling the Tata Steel Group’s ROI by 2012 was achievable, he said: “It is a stiff target. But if we can do it, it will be a new benchmark in value-creation.” Among those present at the Founder’s Day celebrations was Mr Russi Mody, Former Chairman & Managing Director of Tata Steel.

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