Indian multinational Tata group continues to expand

dpa German Press Agency
Published: Friday October 20, 2006

New Delhi- Tata Steel, the company set to take over the Anglo-Dutch steel maker Corus, is just one of the many businesses of the Tata group, one of the India's largest business conglomerates. Comprising 96 companies in seven business sectors, the group has a market capitalization of 49.1 billion US dollars.

The stable includes India's top outsourcing firm Tata Consultancy Services, India's largest privately-owned steelmaker Tata Steel and Tata Motors, which has sold 500,000 of its Indica sedan cars to date and exports the vehicles to Europe, South Africa and Russia.

The group's interests also include luxury hotels, telecom, jewellery and tea.

Tata Group's revenues touched 21.9 billion dollars, about 2.8 per cent of India's gross domestic product (GDP) in 2005-2006. The group has a combined shareholder base of 2 million.

Spearheading the rapid growth which timed with opening up of India's economic policies, is 68-year-old group chairman Ratan Tata, who took over from his cousin JRD Tata in 1991.

The group's revenues have increased by about seven times since Ratan Tata took over and is expected to touch 24 billion dollars in the next financial year, according to business analysts.

While Ratan Tata may be a family name, the group's businesses that together employ more than 200,000 people have been run by professional managers for several decades now.

That, say industry analysts, is a strength of the Tata group making it different from other Indian family-held businesses.

What also sets aside the Tata group from many other Indian business houses is its strong adherence to business ethics and a commitment to corporate social responsibility.

About 66 per cent of the profits of its investment arm Tata Sons goes to charity every year.

And among its recent global business destinations are Bangladesh and Africa, where the company is setting businesses in what analysts term a profit-linked model of development.

In Bangladesh the group recently finalized a 3 billion-dollar deal to set up power, coal and steel plants. It has a coffee plant in Uganda, a bus manufacturing unit in Senegal and a phosphate unit in Morocco.

Its steel plant in Jamshedpur was built from scratch in the jungle by the company's founder Jamshetji Tata, grandfather of Ratan Tata, in 1912 when India was a British colony. The aim then was to develop a strong Indian manufacturing company.

The plant is now at the centre of a sprawling township where workers get free healthcare and education for their children.

The ethical values of the company are evident in that Tata Steel has not had a workers' strike for 75 years - despite the fact that the workforce was cut down from 78,000 in 1991 when Ratan Tata took over to the current 45,000.

By cutting its workforce, Tata Steel retained its competitive edge as the largest privately-owned steelmaker in India but kept true to its promise of paying all laid off workers their full salary till retirement.

Analysts feel this record will stand in good stead for Tata Steel in its Corus takeover attempt.

The company is India's foremost multinational corporation with operations in more than 54 countries.

The takeover of Corus group is the latest in a series of recent takeovers by the group in its effort to go global.

The more important among its acquisitions is that of the Britain- based tea company Tetley in 2000, the Daewoo Commercial Vehicle company of Korea in 2004, and Singapore's NatSteel also in 2004.

© 2006 dpa German Press Agency