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Shyam G. Menon

MUMBAI, Jan. 20

AS a New Year message, it is atypical. But echoing a tone he struck in an earlier annual report of Tata Engineering, Mr Ratan Tata, Chairman, Tata Group, has outlined a demanding 2002 in his New Year co-mmunique to members of the Rs 41,300-crore business conglomerate.

The Tatas will need to re-evaluate their participation in group companies which have under-performed, he says in the statement available on the Tata Web site.

"The continued erosion of market demand over the past three years in several product areas and in several industrial segments has significantly impacted some of our major companies, causing them to cut production, restructure and to embark on significant cost-reduction initiatives to be more competitive in the years ahead,'' he notes.

Acknowledging that amid difficult times, the group gained more cohesiveness and strength with considerable progress made on its restructuring, he nevertheless observes, "During the year, several of our companies have under-performed against the goals that we established for growth, industry leadership and profitability. In some cases, the economic slowdown and market dynamics have had a significant impact on their performance. However, in many cases companies have under-performed even within their industry sector.''

In the first phase of the group's restructuring exercise, it was considered appropriate to give companies time to adjust and achieve the goals that had been set.

Initiatives such as the Tata Business Excellence Model were introduced to help in creating road maps to become globally competitive and improve business practices.

He ends his message, essentially a call to be globally competitive in 2002, saying, "I hope I can count on each one of you, as members of our group team, to retain and secure our position as one of the most respected and successful business houses in the country.''

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