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Thursday, July 26, 2001



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Balancing facilities to give extra capacity at Tata Steel

Rabindra Nath Sinha

KOLKATA, July 25

MR B. MUTHURAMAN, 57, who succeeded Dr J.J. Irani as Managing Director of Tata Steel on July 22, joined the company on November 14, 1966. A technocrat, Mr Muthuraman has held several positions in various disciplines, including marketing. As Executive Dir ector (Special Projects), he earned the distinction of implementing the cold rolling mill (CRM) project within the pre-determined cost and time-frame. He spoke to Business Lineat his Jamshedpur office. Excerpts:

How do you view your new responsibility? Bombay House announced its decision to make you Managing Director well in advance ..... So you could prepare yourself?

I view my responsibility as a new challenge in my life. To succeed someone as eminent as Dr Irani is a rare privilege. I have been fortunate. Dr Irani made very special efforts to see that the transition is smooth. Yes, he has been hand-holding me and co aching me, after the announcement. Now, the training period is over.

What will be your priorities?

My first priority is to ensure that we meet the current challenge in the market place squarely and win. Over the last 10 years the work done under Dr Irani's leadership has earned us the right to grow. We are working on a road map for growth over the nex t 5-10 years. Once we finalise this, we will pursue the chosen growth path.

Do you think the new arrangement, under which the company has three Deputy Managing Directors, provides you greater opportunity to concentrate on the company's long-term growth?

Yes. The new arrangement has been put in place to give focus to specific business areas. I will spend more time on long-term strategies and growth. (The three incumbents are Dr T. Mukherjee for steel, Mr F.A. Vandrevala for new & allied businesses and Mr A.N. Singh for corporate services).

What are the new capital projects being undertaken? Earlier, a new bar & rod mill was proposed; but apparently it has not been pursued ... Any possibility of the proposal being reactivated?

We are looking at many things. One of the priorities is to take the maximum out of the present facilities by de-bottlenecking, improvements and marginal expansion by balancing the facilities.

This could result in a half to a million tonne expansion in long or flat products. We are also looking at ferro chrome and titanium. Telecom is another area we are examining in consultation with our group.

Is there a proposal to open new coking coal mines as the reserves in the existing mines are fast depleting ? Will the partial dependence on coking coal import continue?

We will continue to import coking coal to meet part of our requirements. We are also looking for additional coal leases. (The reference possibly is to the south-eastern block in the company's West Bokaro collieries, where it currently operates quarry E a nd AB with production capacities for 2.1 and two million tonnes respectively).

When do you expect the market situation to improve? The first quarter of the current fiscal has not been that satisfactory ....

The first quarter results reflect the combined effect or less volumes - which is usual in the first quarter -- and low prices -- which is part of the steel business cycle. The second quarter will be better due to volumes. I expect the prices to firm up f rom the third quarter onwards.

Is not the relatively small share of long products a cause for concern for Tata Steel in the given situation?

No. For us margin on flat products is always better than in long products.

Where do you see the company, say, 10 years hence?

In 10 years, I see Tata Steel as the best steel company in the world in terms of profitability and shareholder value; I see it in some new businesses like titanium and global operations in ferro chrome and possibly in telecom as well. In 10 years, we sho uld be seeing a turnover and net profits at about four times the current numbers.

Have you thought of new initiatives to resolve the pending issue of lease renewal for Jamshedpur township with the Jharkhand Government?

The lease issue is on the verge of being settled by the Jharkhand Government.

How do you propose to utilise the land at Gopalpur in Orissa?

One day, hopefully, a steel plant could be put up in Gopalpur. It is an ideal location for a steel plant. Meanwhile, we will let the land to be used for useful purposes like the special economic zone that is being proposed by the Orissa government. (Orig inally, the company decided to set up the CRM project at Gopalpur. But as uncertainty persisted over several supporting facilities -- including a port -- to be set up by other agencies, it decided to put up the CRM project as an integral part of the plan t at Jamshedpur).

Mr B. Muthuraman, MD, Tata Steel.

Related links:
Tata Steel Q1 net falls 80 pc on slowdown

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