International operations & Strategy of:

Submitted to: Ms.D.Kavitha PSG IM

Submitted by: V.Mohana Priya 08MB20 PSG IM

the Tata Steel Group has reviewed its growth strategy. with its recent acquisitions. Jharkhand. formerly known as TISCO and Tata Iron and Steel Company Limited. Ranked 315th on Fortune Global 500. Its installed capacity in Tata Steel Europe (TSE) is sufficient to address the demand in the European market for the next 2 to 3 years. India. Tata Steel is also India's second largest and second-most profitable company in private sector. An additional capacity of 3 million tonnes was added on at its existing steel plant in Jamshedpur. the United Kingdom and Europe. It is the first integrated steel plant in Asia and is now the world’s second most geographically diversified steel producer. Its main plant is located in Jamshedpur. . new opportunities that the acquisitions generated and the benefi ts of the synergies have borne fruit and the Tata Steel Group today ranks amongst the top 10 steel producers in the world. Enhanced capacities. with an annual crude steel capacity of 31 million tons. the Group embarked on an aggressive overseas acquisition strategy that added a steel capacity of 25 million tonnes across South East Asia. is the world's sixth largest steel company. they aim to create value by offering a differentiated product range supported by unrivalled customer service. With the challenges of the fi nancial crisis of the last two years abating. with manufacturing units in 26 countries operations in various countries. it is based in Jamshedpur. STRATEGY OF TATA STEEL Since 2005. It is the second largest private sector steel company in India in terms of domestic production. and hence the emphasis at TSE is now on capital projects that will strengthen its cost position. It is part of Tata Group of companies. The registered office of Tata Steel is in Mumbai.TATA STEEL Tata Steel. With innovation and continuous improvement at the heart of their business performance. Jharkhand. the company has become a multinational with balanced global presence in over 50 developed European and fast growing Asian markets.

Also move of competitors like Mittal steels forced Tata to have global acquisitions. the company was able to enjoy economies of scale in manufacturing. . there are substantial market opportunities in India and South East Asia that warrant immediate expansion of steel capacity. where raw materials are comparatively cheaper. rehabilitation. Because of standardization of core products. Market factors pushed for globalization. mechanical engineering and other demanding markets worldwide.K. the raw material cost in U. which have a longer gestation period because of possible delays that may arise on issues of land. and primary manufacturing facilities in places where manufacturing is competitive. There is however. Global strategy – Expansion Tata Steel believes globalization is a method by which the right part of the value chain is put in its right place in the world and to link it up properly – as finishing facilities in places where customers exist. forestry and environment. automotive. Again. especially with greenfield projects. Because of homogeneity of needs. is high. This can be offset by sourcing from India.Additionally. they also enjoy the benefit of steep learning curve. packaging. Economic factors were also favorable for globalization. The company supplies steel and related services to the construction. a potential risk in the area of plant expansion in India. one of the world's top ten steel producers. the brands and advertising were transferable. It has main steelmaking operations primarily in the UK and the Netherlands. TATA STEEL EUROPE Tata Steel Europe (formerly Corus) is the European operations of Tata Steel Group. The market needs for steel was homogeneous and they had global customers. Since the company is ninety nine years old.

best practices and expertise of senior Corus management. and Netherlands. Corus was formed on 6 October 1999 through the merger of British Steel and Koninklijke Hoogovens. 2. Tata Steel completed its £6. packaging. Corus is Europe's second largest steel producer with revenues in 2005 of GBP 9. metal goods. automotive. The powerful combination of low cost upstream production in India with the high end downstream processing facilities of Corus will improve the competitiveness of the European operations of Corus significantly.Tata Steel Europe is a leading supplier to many of the most demanding markets around the world including construction. of technology. Its activities are divided into three main divisions: strip products (including coated and uncoated strip and welded tubes.2 million tons primarily in U. and exposure to high growth in emerging markets. which operates as a link between Corus's manufacturing operation and its customers. So speed for growth will be much fast then it was expected. mechanical and electrical engineering. packaging and construction sectors and there will be a transfer. sold both as coil and sheets). whilst gaining price stability in developed . Corus is primarily engaged in the manufacture of semi-finished and finished carbon steel products. It has a global network of sales offices and service centres.It has got available steel capacity that it will plan to expand. Tata Steel will retain access to low cost raw materials and slab for the enlarged group. from Europe to India. Benefits for Tata steel after acquiring Corus: 1. and oil & gas. In addition. and the distribution and building systems division. Corus was rebranded to Tata Steel on 27 September 2010. The combination will also allow the crossfertilisation of research and development capabilities in the automotive.Cost efficiency that Tata steel achieve is enhanced its operation in aggressive manner. and crude steel production of 18.K.2 billion (US$12 billion) acquisition of Corus Group at a price of 608 pence per ordinary share in cash on 2 April 2007 and Corus became a subsidiary of Tata Steel.2 billion.

Ltd.. China. SISC and SCSC. The three companies operated the business of manufacturing long steel product. In December 14. 2002 to be a holding Company pursuant to the merger of businesses among NTS. 2. which is one of the largest steel producers in the Asia Pacific with presence across seven countries.006 Tata Steel Limited. .500 employees in Singapore. Australia. The aforementioned merger has been in compliance with NTS's rehabilitation plan with its history and development set out below. in which it has 67. In 2005 Tata Steel’s acquisition of NatSteel Asia (Singapore) was completed. 2006 the Company name was changed from Millennium Steel Public Company Limited to Tata Steel (Thailand) Public Company Limited.1% equity and Nat Steel Holdings... In 2004 NatSteel Asia (Singapore) Pte Ltd was incorporated to hold the steel business in anticipation of the merger with Tata Steel. NatSteel Holdings is one of the top steel providers in the Asia Pacific. last two of which were subsidiaries of Cementhai Holding Company Limited ("CHC"). Natsteel Holdings: A wholly-owned subsidiary of Tata Steel.. Philippines. NatSteel is one of the top steel providers in the AsiaPacific with over 3.SOUTH EAST ASIAN OPERATIONS The Group’s South East Asian operations comprise Tata Steel Thailand. In April. Thailand and Vietnam. the 4th. Tata Steel Thailand: The Company was established on July 12. Malaysia. has bought the Stock of Millennium Steel Co. Plc Holding Co.

Philippines and Singapore. Australia. Established in 1995 by a merger of Metal Corporation and Steel Corporation. VNSteel is Vietnam’s largest steel company and has various manufacturing plants and a distribution system across the country. China. NatSteel is the Asia-Pacific hub which supports regional operations in production. A proposed steel complex with an estimated capacity of 4. high quality construction steel to sheet and plate products serving other economic sectors. .50. which is today known as NatSteel Holdings Pte Ltd. NatSteel is a 40% partner in the Joint Venture with a capacity of 3. Philippines Operations At Philippines. engineering development. Australia Operations: In Australia.2 million tonnes with a product mix ranging from crude steel. Malaysia.000 tonnes per year. NatSteel has presence in Vietnam. Headquartered in Singapore. logistics.This marked a new beginning for the steel division. Vietnam Operations: NatSteel in Vietnam is a 55% equity partner in a Joint Venture with VN Steel and a capacity of 1.30. procurement. and environment and safety programmes. Ha Tinh Project: Location : Ha Tinh province. the downstream business has a capacity of 2.5 million tonnes per year. Thailand.50. The total capacity of VNSteel including that of its joint ventures is around 2.000 tonnes per year.000 tonnes per year.

TATA Steel Raw material strategy The Tata Steel Group has adopted a two pronged strategy: 1. Another MOU was signed to set up a cold rolling mill in Ha Tinh province. On the successful completion of the study and financial closure. Tata Steel will have a stake of minimum 65% and VSC will have a stake of 35% in the Steel complex. Tata Steel and Vale. 2005 it signed agreements to buy a 5% interest in the Carborough Downs Coal Project located in Queensland. Year: On December 14. Tata Steel is partnering with VSC in establishing a steel complex in Ha Tinh province. which would undertake mining in the Thach Khe iron ore mine. JFE and Posco) have undertaken a large scale expansion of the Carborough Downs Coal Mine near Moranbah in Central Queensland in Australia. in exploration / prefeasibility stage. 2. The clean coal envisaged to be produced would be low-ash coking coal and PCI coal. the Tata Steel Group has fi nalised the following agreements: • Australia – Bowen Basin Project Strategy: Joint venture with Vale in Australia for a Coking Coal Mine.e. 2008 to develop a steel complex in Ha Tinh. Australia. highly suitable for steel . In keeping with the Group Raw Material Strategy – global sourcing strategy. To look for participation in the early stage of a project i. which will be phased over 10 years. Tata Steel will also have a stake of 30% in Thach Khe Iron Ore Joint Stock Company. along with other joint venture partners (Nippon steel. To look for opportunities which could give the Group immediate off -take.Tata Steel signed an MoU with Vietnam Steel Corporation (VSC) on May 29.

The Mt. The aim was to develop iron ore projects in the region. Nimba deposit spread over 3 countries – Liberia. • Canada – Direct Shipping Ore Project Tata Steel. on December 11. · The iron ore from this project will be supplied to Tata Steel Group facilities especially those located in the United Kingdom and The Netherlands. The iron ore from this project will serve Tata Steel’s European facilities.4% stake in NML. The agreement also provides exclusivity to Tata Steel in the Labmag taconite iron ore property. Guinea and Ivory Coast is one of the biggest iron ore deposits in West Africa. signed a Heads of Agreement memorandum with New Millennium Capital Corporation.making.9% stake in NML with an option to acquire an 80% equity interest in NML’s Direct Shipping Ore project. Tata Steel holds a 19. • Ivory Coast – Nimba Iron ore Project Strategy & year: Tata Steel Limited and SODEMI (State Owned Company for Mineral Development). The project will be implemented by a joint venture company – Tata Steel Cote d’ivoire. 2007 entered into Joint Venture agreement for the development of Mount Nimba Iron ore deposits in Ivory Coast (West Africa). wherein Tata Steel will have a major shareholding (75%).The first raw coal production started in August 2006 and the mine is currently producing around 1 mtpa. Tata Steel subscribed to a private placement of Canadian $20 million by NML pursuant to which Tata Steel Global Minerals Holding Pte. The initial phase will involve exploration and detailed feasibility assessments followed by construction of the mine and beneficiation facilities. Tata Steel also signed an offtake agreement for a proportion of the production over life of the project. . Tata Steel will have 100% offtake rights to the produce of the mine at the time of production commencement. now holds a 27. In June 2010. through its subsidiaries. Ltd. Canada.

It has moved on from the . which lies in the Salalah province of Oman and has large deposits of limestone. The shipping firm would handle the Tata Steel Group’s requirements for moving raw materials and steel. The Company would ensure a strategic control over logistics in the future. 2008 – Tata Steel has a 70% stake in the joint venture.7 square miles). • Singapore Tata NYK Shipping Pte Limited is a Singapore based 50:50 joint venture between Tata Steel and Nippon Yusen Kabushiki Kaisha (NYK line). The project envisages mining of limestone in the Uyun region (limestone is the key raw material for producing good quality steel). in the business of producing Ferro Chrome and Charge Chrome. • Oman – Limestone Project Tata Steel Limited and the members of the Al Bahja Group. Asia and elsewhere. The JV was set up to cater to ship bulk cargo such as coal. a Japanese shipping major. Australia signed a joint venture agreement on November 30. iron ore and steel. The JV comprises two licences (the Benga and Tete licenses) and covers an area of 24.2 million USD) to acquire 35% of Riversdale's Benga and Tete licences. a leading business house of Oman signed a Joint Venture Agreement on January 16. • South Africa Tata Steel (KZN) TSKZN is a South Africa based subsidiary of Tata Steel. Tata NYK has entered into a long term charter for 8 Supramax / Panamax vessels. Tata Steel will pay AUD100 million (approximately 88. Under the terms of agreement.960 hectares (approximately 96. 2007.• Mozambique – Bengal Coal Project Tata Steel and Riversdale Mining Ltd. The coking coal derived from this project will be supplied to the Tata Steel Group's facilities in Europe.

World wide Operations of Tata Steel Steel Making Operations India Western Europe South East Asia Distribution and commercial centres Latin America North America Scandinavia CIS Western Africa South Africa China South East Asia Japan Oman Turkey CEE India Mining Assets and Projects Ivory coast Mozambique Jamshedpur India Oman .project phase and become operational since 3rd April 2008 with the switching on of Furnace I.

In that short period of time. The Company was formed back in 1986. and business strategy and environment management. It has shown innovation in utilizing measures like sea transport. STRATEGIES FOLLOWED Strategy For Employees The company's most distinctive attribute. the company believed in doing things in an innovative and unconventional way. using new methods. is its approach to the business. quality. Ambuja follows a unique homegrown philosophy of giving people the authority to set their own targets. Industry observers unanimously agreed that GACL was the most efficient cement manufacturer mainly because of its operational excellence. in any part of the world. Ever since its inception. captive power plants. that are equal in quality assurance practices. Its continuous drive for cost efficiency and quality has taken GACL to the position of frontrunners in the country. This simple vision has created . They have environmental protection measures set in place. so as to reap benefits in new ways. It was formerly known as Gujarat Ambuja Cements and it owns Ceylon Ambuja.AMBUJA CEMENT Ambuja Cement Ltd (GACL). and the freedom to achieve their goals. It is ranked as one of the best well managed companies in India. their total cement capacity is over 19 million tones. however. GACL had won a host of awards for management excellence. and Indo-Nippon Special Cements. The company had done well in spite of the fluctuations in the cement industry by adopting aggressive productivity improvement and cost-cutting measures. and imported coal and availing of govt. sops and subsidies to constantly check the costs. to any company. is one of the major players in the cement industry of India today. The Group's principal activity is to manufacture and market cement and clinker for both domestic and export markets. Ambuja Cement has made huge strides in the world markets and as of late. Midigama Cements.

freight and raw material (17% each) and power (16%). Ambuja Cements had set up a $20 million clinker Grinding unit in Sri Lanka in the year 1998. Gujarat Ambuja Cement entered into a strategic agreement joint venture with the second largest cement distributor in the world. But in 2008 it sold outs its shares in Ceylon Ambuja. through which it acquired a small company. Fully Owned Subsidiaries In 1995. (CAIL). and one of the lowest cost producer of cement in the world. in the south of the island country. Ambuja is the most profitable cement company in environment where there are no limits to excellence. Swiss based cement . Ceylon Ambuja Cements (Private) Ltd. with other components accounting for the balance 30%. in Sri Lanka. GACL floated a wholly owned subsidiary in Mauritius – Cement Ambuja International Ltd. INTERNATIONAL OPERATIONS Exports GACL exports cement to Sri Lanka. Strategy For Operations The major cost components of cement are fuel (20%). no limits to efficiency. Holcim.. South Africa. Strategic Move In 2005. Midigama Cement. And has proved to be a powerful engine of growth for the company. and Gulf countries. GACL decided to adopt a two-pronged strategy to achieve total cost management (TCM): enhancing plant productivity and reducing costs on each of the cost components individually. In 1996. GACL floated another subsidiary. 2000 The Company has kick started its operations in Sri Lanka with the setting up of a cement terminal in the port of Galle. As a result. Mauritius.

in January 2005. which has further helped the company to grow. The planning of .in the sense of long-term profitability in harmony with environmental and social progress. Holcim had. • GACL gave very high regard to efficiency.manufacturer. To improve efficiency technological breakthroughs were made during the development.4 billion. • GACL gave importance to adoption of new technology for controlling and ensuring quality with minimum environmental hazards. human resources and Information technology. Because of this joint venture. The use of Australian surface miners is an example for this. • • GACL has planned the location of its plants very strategically. GACL strives to reach optimum efficiency in logistics management. This ensured that considerable time and cost are saved. This helped Holcim for entering Indian Market and for Ambuja to gain global exposure.8 per cent promoters stake in the GACL for INR 21. It has planned in such a way that there is maximum exposure to all parts of India. Holcim continues to maintain a strong vested interest in the company’s success. Many such innovative leaps were taken in technology. bought a 14. Currently (2010) Holcim holds about 46% of shares in Ambuja Cements Limited. Ambuja cement has access to Holcim’s best practices in areas such as waste heat recovery. Its continuous drive for cost efficiency and quality are derived from an emphasis on replicating global best practices and continuous innovation. By this strategy GACL has got opportunities of Opening of new cement trading opportunities in Middle East and Indian Ocean. STRENGTHS OF AMBUJA CEMENT A very efficient management is most obviously the driving factor for the success of GACL. use of alternative fuels. The following strength can be identified in the strategy of GACL. Both Holcim and Ambuja have their strategies characterized by sustainability.

The company uses its energy efficiency. Ambuja generates their very own electricity from bio-waste products such as rice husks. who are committed. GACL has acquired stakes in DLF. This move not only saved time and transportation cost. which has given it access to a good distribution system. but gave access to new and emerging markets. to get more output out of less power. • • GACL has its own captive power plant and this has made GACL the world leader in low cost of cement production. GACL has achieved a unique position amongst the cement manufacturers in India. ACC and other small players. considerable amount being from debt markets. as a financial force field. the company has access to the richest markets in India. was achieved easily. and Punjab. With plants in Gujarat. and a complete infrastructure of bulk cement sea movement. and wood chips.sea route is a perfect example to illustrate this. allowing Ambuja to prevent unused overhead costs from driving their costs up. . HP. Within a short period. GACL has maximum efficiency in fuel usage. • GACL has empowered employees. This gives the access to large funds and the freedom to choose funding options. The system in place for importing coal cut down the cost of fuel remarkably. this stance makes the company stand out in the financial world. The company then set up a facility to capture the excess power not used and produce their own electricity. to protect itself against the prices of its competitors – in an industry known for its extreme use of electricity. motivated and encouraged to the growth of the organization. • GACL has a very good reputation in the market and has a high brand value. Mobilization of Rs 1500 crore for expansion earlier. They also purchase cheap coal and overseas fuel oil. The company decided to improve efficiency of its production kilns. Any extra electricity that isn’t used is sold to local governments. sugarcane waste. There is an “I can” culture in the organization. Power usage makes for over 40% of the cost to produce cement.

html#ixzz11l5MyRmP *o*o*o*o*o*o* .References: • • • • www.tatasteel.articlesbase. corporate profile www.Annual reports.Annual reports PROWESS Database .com .

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