Tata Steel is looking at a range of knowledge-intensive materials space beyond steel in order to build a parallel revenue stream for the company.

“Steel is capital intensive metal and we are into mining and producing steel. But we have been exploring forays into knowledge-intensive materials. We are getting into fibre-reinforced polymers and we have a graphene business going. We are also getting into ceramics since we know material science, said T V Narendran, CEO & Managing Director, Tata Steel while addressing Madras Management Association’s Awards Function and AGM Business Session.

Medical ceramics is imported from outside. So we are looking at knowledge-intensive where Tata Steel’s knowledge, understanding, and IP from that point of view can be monetised. While we will continue to build steel plants, we are also working on parallel revenue streams through these, he added.

Tata Steel’s diversification into new materials comes under the New Materials Business, where it seeks to create knowledge-intensive businesses by exploring materials beyond steel, to counter the cyclicality of the steel business. Currently, it has three verticals – fibre-reinforced plastic (FRP) composites, graphene, and medical implant materials. FRP business fetched a revenue of ₹375 crore in FY24, according to its latest annual report.

Thoothukudi plant

Narendran also mentioned Tata Steel’s previous interest in the titanium business and efforts to build a project in Tamil Nadu. The company had plans to set up a project near Thoothukudi due to the availability of rutile sand in the state and had even begun acquiring land. However, the project did not materialize due to various reasons.

Earlier in his address, Narendran discussed managerial excellence, emphasizing the need for companies to focus on future trends and planning. He cited strategic management expert Vijay Govindarajan’s quote: “Companies that only talk about the past don’t have a future.” Managerial excellence, he noted, arises from the alignment of personal, professional, and institutional value systems.

Presenting a special address, Josh Foulger, President of Zetwerk, a contract manufacturing firm, emphasized the importance of external focus for India at this juncture. He highlighted that India is on the brink of transitioning from a $3.2 trillion economy to $5 to $10 trillion, with much of this growth expected to come from the current generation of industry leaders. He pointed out the vast opportunities available in various sectors, particularly in electronics system design and manufacturing (ESDM).

India’s workforce

Foulger noted that countries like Bangladesh have outpaced India in textiles, highlighting the need for awareness of competitive dynamics. He mentioned that the global ESDM industry, valued at $3 trillion today, is projected to reach $5 trillion by the decade’s end. India’s ESDM manufacturing currently stands at $100 billion, with a domestic market size of about $150 billion. The aim is to increase manufacturing output by five times. However, he stressed the importance of understanding both opportunities and threats, including nearshoring by other countries, to effectively leverage India’s strengths and address weaknesses.

Foulger emphasised the potential of India’s workforce, particularly the digitally savvy Gen Z, as a key asset in achieving the nation’s economic goals. He acknowledged that while some view the workforce as a weakness, he sees it as a strength that, with the right training and understanding, can drive the Bharat Journey forward.

With nearly four decades of strong relations in software services with the US, Foulger suggested it is now time to pivot towards hardware. He sees ESDM and related sectors as promising export categories, particularly targeting markets in the West, the Middle East, and Africa.