5. Tata steel KZN South Africa proposes to set up high carbon ferrochrome plant in South Africa. The plant is slated to be commissioned by October 2007 with an annual production capacity of 135,000 tonnes during Phase I.
47 | P a g e SWOT ANALYSIS
Strengths:-
LOW COST AND EFFICIENT LABOUR FORCE STRONG MANAGERIL CAPABILITIES.
STRONGLY GLOBLISED INDUSTRY AND EMERGING GLOBAL COMPETITIVENESS.
MODERN NEW PLANT. STABLE BALABCE SHEET.
EXPERINCE OF TATA GROUP IN DOING. WEAKNESS:-
HIGH COST OF ENERGY. HIGHER DUTIES AND TAXES.
DEPENDENCE ON IMPORTS FOR SALE.
MANUFACTURING EQUIPMENTS AND TECHNOLOGY.
OPPORTNITIES:-
HUGE INFRASTRUCTURE DEMAND.
RAPID URBANIZATION.
INCREASING DEMAND FOR CONSUMERS DURABLES. UNTAPPED RURAL DEMAND.
CONSILIDATION TREND IN STEEL INDUSTRY TO GET EXPOSED TO THE GLOBAL STEEL MARKET.
THREATS:-
SLOW GROTH IN INFRASTRUCTURE DEVELOPMENT. MARKET FLUCTATION.
GLOBAL ECONOMY SLOW DOWN
THRETS TO HOSTILE TAKEOVER BY ITS COMPETITORS.
48 | P a g e AWARDS AND ACHIEVEMENTS
Tata Steel has won Golden Peacock Award for Corporate Social Responsibility, march 2009
Tata Steel also won the ET award for the company of the year, Jamshedpur, January 2009.
Tata Steel got the best Establishment Award by the president of India, November 2008.
Tata steel also received Deming application Prize 2008
Tata Steel also won Make Asia Award for fifth time in October 2008.
The company was also recognised as the world‘s best steel producer by the world steel Dynamics in 2005. The company is listed in Bombay stock exchange and National stock exchange.
TATA STEEL has backed 100 glorious years of experience in steel making. Established in 1907, it is the first integrated steel plant in Asia and now in the world‘s second most geographically diversified steel producer and a Fortune 500 company.
TATA STEEL has a balanced global presence in over 50 developed European and fast growing Asian markets, with manufacturing units in 26 countries. MARKET SHARE OF TATA STEEL
According to Mr B Muthuraman MD of TATA Steel, better product quality and efficient services are the reasons for TATA Steel's large market share in the country.
Mr Muthuraman told reporters that "India demand grew by 5.5% on quarter on quarter basis in the first quarter. TATA Steel sold 20% more. So we actually took higher market share. It is because of the product and service quality.‖
He said that during the first quarter this fiscal, sales the firm's domestic operations rose from 1.15 million tonnes in the year ago period to 1.42 million tonnes. However, sales in monetary terms came down to INR 5,554 crores in the period under review from INR 6,087 crore in the first quarter of 2008-09 due to falling steel prices.
He said that there is a considerable scope to create value in steel by providing quality products and quality service adding that focus on quality and branding resulted in rich dividends to the company compared to other players.
49 | P a g e GROWTH AND FUTURE PROSPECTS OF TATA STEEL
TATA Iron and Steel Company (Tata Steel), Asia's first and the country's largest integrated private sector steel plant, is aiming to become a EVA positive company ahead of the three year time frame that it had set for itself.
Stating this, Mr B. Muthuraman, Tata Steel, Managing Director, told Business Line here that there has been good progress on the EVA front. "An awareness has been created on this issue, costs were down and Tata Steel was now one of the lowest cost producers of hot rolled coils.'' Company sources said that with costs being brought down Tata Steel has one of the lowest operating costs producing hot rolled coils at between $150 and $160 a tonne as against the Rs 154 per tonne cost of production of Pohang Steel of Korea.
It may be mentioned here that hot rolled products such as plates, sheets and coils are widely traded all over the world because of their varied applications. Hence they are used as the industry benchmark.
Mr Muthuraman said the company had launched several initiatives to reduce costs right from the mining of coal to procurement of raw materials. Moreover, outsourcing of those activities that do not form the core of Tata Steel's business was also progressing well. A.T. Kearney had been appointed consultants for helping out the company with its efforts in this direction. Beginning from this year, Tata Steel, one of India's most respected companies, embarked on its journey to become an EVA positive company. EVA, or economic value addition (a relatively new concept in the corporate world), is the difference between the return on net assets and the weighted average cost of capital multiplied by the invested capital. Mr Muthuraman said that there were only a handful of steel companies in the world who have a positive EVA and as of now Tata Steel was not among them.
To become an EVA positive company Tata Steel would "mobilise all its resources and efforts through value-based management that will help the company earn better returns than the cost of capital. Company sources said that at the current level of investment, Tata Steel requires a PBT of Rs 800 to Rs 1,000 crore to become EVA positive. Tata Steel expects to complete the journey in about three years time. With the progress made in this direction in the last few months it looks possible to achieve it ahead of the target.
50 | P a g e Alongside its journey towards transforming itself from an EVA negative to a EVA positive status, Tata Steel is laying special emphasis on another area — managing knowledge, according to Mr Muthuraman.
Knowledge is being regarded in the 21st century as the fourth factor of production (the three conventional ones being land, labour and capital).
The central theme of knowledge management is to leverage knowledge and reuse knowledge resources that already exist in a company so that people seek out best practices rather than re- invent the wheel.
Referring to the current year, the Tata Steel Managing Director said that production and market reports were good and hot metal production would be more than the targeted amount. The company had improved its product mix and would be selling more of branded products. To a question on future growth areas, he said that entry into some non-steel areas was still being probed. On acquisitions he said that the company as part of its EVA positive enterprise would look out for acquisitions as a means to enhance shareholder value.
COMPETITORS
The major competitors of TATA STEEL are SAIL,
JINDAL,
JSW STEEL ltd, VISA STEEL ltd., Essar steel ltd,
Electro steel steels ltd., OCL iron and steel ltd., Techno craft Industries ltd., Gallantt Ispat ltd,
51 | P a g e