A Project Report on EM

8/12/2019 A Project Report on EM

1/48

1

Born: 3 March 1839

Died: 19 May 1904

JAMSHEDJI TATA


2/48

2

1.INTRODUCTIONContribution in the development of Indias economic growth:

The Indian steel industry is more than 100 years old now.

The first steel ingot was rolled on 16th February 1912 - a momentous

day in the history of industrial India. Steel is crucial to the development of

any modern economy and is considered to be the backbone of the human

civilization. The level of per capita consumption of steel is treated as

one of the important indicators of socio-economic development and

living standard of the people in any country. It is a product of a large

and technologically complex industry having strong forward

and backward linkages in terms of material flow and income gener ation.

All major industrial economies are characterized by the existence of a

strong steel industry and the growth of many of these economies has

been largely shaped by the strength of their steel industr ies in their initial

stages of development India is the 7th Largest steel producer in the world,

employing over 1/2 million people directly with a cumulative capital

investment of around Rs.1 lakh crore. It is a core sector essential for

economic and social development of the country and crucial for its

defense. The Indian iron and steel industry contributes about Rs.8,000 crore to


3/48


4/48

4

growth . And i t i s g rowing f rom s t r eng th to s t r eng th wi th

ne wer developments Bot h wit hin st eel mak ing pra cti ce as wel l as

eng ineer ing deve lopments , which ask fo r more usage o f s t ee l .

So mu ch so , tha t ec onomi c de velo pmen t has bec ome almost

synonymous with steel.


5/48

5

2.Major Happening Political:

In the 1920s and 1930s , when i t was s t i l l ca l l ed Ta ta I ron and

St ee l Co mp an y, TI SC O' s largely tribal workers fought pitched battles

with the European or Parsi management. Work conditions and the right

to organize were important rallying issues, and over the years, the

company developed a reputation for union-busting, often by violent means. The

value of Dorabjis Expansion Programmed came to be appreciated only

during the phase when world was reeling under the pressure of the Great

Depression. The Tatas survived the depression and supplied nearly

of the countrys steel requirements. By the Second World War, Tata s

p roduc t ion capac i t i e s had expanded enough to make th e i r p r i ces

lower than those of steel produced in England raising them to an authoritarian

position. By the 1980s , th e gov ernme nt was c l ear l y in con t ro l o f

wha t had come to be ca l l ed the commanding he igh t s o f

economy. More than 45% of ou tpu t in o rgan ized indus t ry came

from the public sector as well as bank and other long-lending institution. In 1981-

82, eight of the largest firms in India were in the public sector, as were

24 out of the top 30 in terms of total capital employee. In this sense it


6/48


7/48

7

Tata Iron & Steel Company Rajiv Gandhi- Both internal & external

f ina nce s hort ages were wors enin g. T rade def i ci t increased from 10

bil lion in 1983 -84 to Rs. 34 bill ion in 1985-86 so it became difficul t to

repay loan.

Economic:

TATA Steel, formerly Tata Iron and Steel Company Ltd (Tisco), the company

around which the enti re township of Jamshedpur was built, was registered

in Bombay (now Mumbai) on August 26, 1907. It had an initial capacity

of 160,000 tones of pig iron, 100,000 tones of in go t st ee l, 70 ,0 00

tones o f r a i l s , beams and shapes and 20 ,000 tones o f ba r s , hoops

androids. It also had a powerhouse, auxiliary facilities and a laboratory.

I t was in 1955 that Tata Steel beg an i ts two mil l ion - ton e expa nsi on

p rogrammed th e la rges t p ro jec t in th e p r iv ate sec tor at that time.

The project was completed in December 1958. Beginning in the 1980s,

the company undertook in various phases an ambitious modernization


8/48

8

programmed. The fi rst phase, be tween 1981 and 1985 , involved a total

pro ject cost of Rs .223 crores . This phase, among other things , saw the

installation of two 130 tone LD converters, two 250 tone a day oxygen

plants, a bar forging machine, two vert ical twin-shaft lime kilns and a

tar-dolo brick plant. Significantly, a six-strand billet caster and a 130-

tone vacuum arc refining unit were installed, that too in the integrated steel

plant. The second phase (1985-1992), involving a pro ject cos t of Rs .780

crores, saw for the first t ime in India coal injection in blast

furnaces and coke oven bat tery wi th 54 ovens us ing s tamp-

charging technology. Apart from this, a 0.3 mtpa (million tone per

annum) wire rod mill, a 2.5 mtpa sinter plant, a bedding and blending

plant and a waste recycling plant of 1mtpa were installed.

(2) The cost of the third phase (1992-1996) of the project was a

whopping Rs.3,600 crores, and that of the fourth phase (1996-2000)

Rs.1,300 crores. The company recently commissioned its 1.2 mt

(million tone) capacity Cold Rolling Mill Complex at a project cost of

Rs.1,600crores. This four-phase modernization programmed has enabled

Tata Steel to be equipped with the most modern steel-making facilities in the

world. As of today, the Tata Steel facility has a hot metal capacity of 3.8 mtpa and

a crude steel capacity of 3.5 mtpa, corresponding to


9/48

9

a s a l a b l e s t e e l c a p a c i t y o f 3 . 4 m t p a . T a t a S t e e l h a s

b e e n i n t h e f o r e f r o n t o f I n d i a s industrialization and an engine

of growth. It is part of Tata Group, a prestigious, family-owned Indian

multinational with 2005 revenues of $17.8 billion, the equivalent

of about 2.8% of India's GDP. Tata Steel's acquisition of Corus was a marriage

made in heaven. Tata acquired Corus, which is 4 times larger than its size

and the largest steel producer in U.K. The deal, which creates the

wor ld s f i f th l a rges t s t ee lmaker , i s Ind ia s l a rges t ever foreign

takeover and follow Mittal steels $31 billion acquisition of rival

Arcelor in same year. Tata acquires corus on April 2007 for a price of

$12 billion. The price per share was 608 pence, which is 33.6% higher the

first offer which was 455 pence. For the fiscal year ended March 2006, the

company generated revenues of $3,693.6million (IR17,144.22 Crores), an

increase of 0.1% over the previous fiscal year. The company saw a net income

of $755 .4 mi l l ion ( IR3 ,506 .38 Crores ) ,

an inc reas e o f 8% over f isc al 2 005 months


10/48

10

Social:

Social responsiveness became integral to organizational objectives of Tata Steel,

even before the company was established in 1907. In 1970, however, Tata Steel

formally incorporated its commitment to the stakeholder concerns ,

including those of the nation, and environment, in its Articles of

Association. The Company shall have among its objectives the

promotion and growth of the national economy through increased

productivi ty, effective uti li zation

of mate r i a l s and manpower r esources and con t inued app l i ca t ion

of mod er n sc ie nt if ic an dmanagerial techniques in keeping with the

national aspirations, and the Company shall be mindful of its social and

moral responsibilities to the consumers, employees, shareholders, society

and the local community.

F o r J a m s e t j i T a t a , t h e p r o g r e s s o f e n t e r p r i s e , w e l f a r e o f

p e o p l e a n d t h e h e a l t h o f t h e enterprise were inext ricably linked .

Wealth and the generation of wealth have never "been ends in themselves,

but a means to an end, for the increased prosperity of India. Tata Steels efforts

at environment management are well recognized. Its Steel Works in

Jamshedpur , a l l i t s mines , co l l i e r i e s and manufac tu r ing


11/48


12/48

12

3.Various Policies of Tata Steel Quality Policy Safety Occupational Health and Environmental Policy Human Resource Policy Social Accountability Policy Corporate Social Responsibility Policy Drug & Alcohol Policy HIV+ & AIDS Control Policy Energy Policy


13/48

13

Towards organization:

Tata was the 1st company to amend i t s a r t i c l es o f a ssoc ia t ion

including the clause of social welfare.

Towards shareholders:

Equal participation, straight forward business policy.

Towards employees:

Pioneer o f P .F . scheme, f r ee medica l and workmens co rpora t ion

fund.

Towards Society:

India should not be a economic super power but a happy country.

Towards government:

Suggestions of economic reforms and high tax Payer Company.


14/48

14

Towards consumers:

Consumer is the king of market. Quality products & services timely

solutions of problems T a t a S t e e l i s a s i g n a t o r y t o t h e U n i t e d

N a t i o n s G l o b a l C o m p a c t , a n d a b i d e s b y i t s 9 principles that

address issues on Human Rights, Labor Rights and Environment, etc

Tata Iron & Steel Company

Plantation of 1 lakh trees in and around Mumbai in collaboration with

the National Society of the Friends of the Trees Special project with M/s

NEERI , in o rder to assess th e ca r ry ing capaci ty o f th e region and

to ensure sustainable development in the region.

Technology:

(5)Tata Steel has been fortunate to have leaders and a rich reservoir of

committed people who could see clearly through the future and

transformed the plant into a modern technological giant with the power

of their meticulous envisioning, strategy and planning, through several

modern iza t ion p rogrammes hav ing spen t more than Rs . 70000

mi ll io ns on en vi ro nm en t -friendly technologies since 1980.


15/48

15

Installation of a modern Cold Rolling Mill Complex, built at global

speed and cost, is not only the epitome of Tata Steels modernization

programme, but also remains a global benchmark in project management of its

kind. I t is also worthwhile to mention that the Company lost

d e a r l y f o r t h e i r d e c i s i o n o n t h e i n s t a l l a t i o n o f

E OF (EnergyOpt imiz ing Furnace) a t Jamshedpur Works , and CR

M (Cold Rolling Mill) at Gopalpur in Orrisa. The Tatas made a great

con t r ibu t ion in manpower deve lopment f i e ld too . F rom the

v er y beginning the Tatas invested substantial time, money and

resources in training schemes. In1921, the Jamshedpur Technical

Ins t i tu te was se t up wi th a purpose to replace fore ign technical

experts with their Indian counterparts. Furnished with super-

sophisticated labs, advanced training aids and other infrastructural facilities, the

Technical Training Institutes

inJ a m s h e d p u r i s t o d a y o n e o f t h e b e s t i n t h e c o u n t r y .

R e c e n t l y , a n e w M a n a g e m e n t Development C entre h as b een

bui lt at Dimna to impart advanced management training to middle and

senior level managers in the Company.


16/48


17/48

17

Tata S tee l s modern iza t ion p rogramme, bu t a l so r emains a

gl ob al benchmark in project management of its kind. Besides, the

Company has also completely revamped its information technology

in f ras t ruc tu re to su i t i t s modern ized p lan t . I t

sp en t c l o s e t o R s . 4 0 c r o r e s o n S A P i m p l e m e n t a t i o n a l

o n e . T a t a S t e e l s m o d e r n i z a t i o n programmers are detailed in the

section, Technology at its Best of the chapter, Imperatives of Change

Management.


18/48

18

Natural disaster:

Disaster Management & Relief

T a t a S t e e l h a s a l o n g h i s t o r y o f p r o v i d i n g r e l i e f d u r

i n g n a t u r a l c a l a m i t i e s . S o c i a l consc iousn ess runs deep

down to the l a s t employee o f the Company . Every employee

contributes to such causes, complemented by an equal, or more, amount

from the

Company.Besides , e mployees a lso volun teer to a dminis ter re l ief

operations and provide disaster management services to other agencies

involved.


19/48

19

Relief Operations

Tata Stee l s r e l i e f and r ehab i l i t a t ion p rogramme, l a rge ly

ex ec ute d by the Ta ta Rel ie f committee, is carefully planned

and time-tested to counter unforeseen devastation caused by floods,

drought and other natural calamities, serving both immediate and long-

term needs of those affected, by offering them food, medical aid,

rehabilitation, etc. It has even designed and constructed buildings that can

withstand natural calamities such as earthquakes.

I n d i a i s a d e v e l o p i n g c o u n t r y a n d i t s e c o n o m y i s g r o w i n g

v e r y f a s t . I n s t e a d o f t h i s economical growth there is need for

infrastructure to sustain this growth. The Government envisions India

becoming a developed nation by 2020 with a per capita GDP of

$154010.For a na t ion tha t i s economical ly s t rong, f ree of the

p rob lems o f underd eve lopment and p lays a mean ingfu l ro le in

the wor ld as be f i t s a na t ion o f over one b i l l ion peop le , the

groundwork would have to begin right now. The Indian steel industry will be

required and is willing to play a critical role in achieving this target. If the steel

indus t ry gear s up in abou t 3 to 4 year s , Ind ian s t ee l can be bo th

in In di an an d foreign markets. Steel industry has seen a sunrise after a


20/48

20

bad and cloudy night. Worries of financial institut ions are over and have

taken an exposure in this sector. Indian government as planned for

pump ing in a lo t o f mon ey in in f ras t ruc tu re in co m i ng yea rs ,

h ence s t ee l consumption will go up manifold.

GDP per capita to increase from USD 2500 and USD 5000 in 2020

Population growth rate of 1.3 - 1.5%

Continuously improving macro economic factors

A strong demographic profile: with a large consumer base

Growing urbanization

Stable social and political environment


21/48

21

5.FUTURE PROJECTSIndian Steel production likely to triple in next 15 years

National Steel Policy Projections


22/48

22

Globa l c rude s t ee l consumpt ion i s p ro jec ted to inc rease to

approximately1,730 mtpa by 2020, driven by developing countries, including

China.

W h i l e C h i n a i s b e c o m i n g t h e n e w s o u r c e o f d e m a n d ,

t h e d e v e l o p e d economies as a whole sti ll remain the largest port ion

of the worlds steel consumption.(Chart-3)

Positive demand fundamentals in development economics. (Chart-3)

Roads and power:

The existing road network needs to be expanded and s trengthened

considerably for reducing t r an s ac t i o n co s t s o f t h e I n d i an s t e e l

p r o d u c e r s . T h e s t e e l p l a n t s a n d m i n e s n e e d t o b e integra ted

with the on-going programmes of national highway development and

also with the proposed rural road schemes for expanding the delivery chain of

steel across the country, especially the rural areas. The additional


23/48

23

requirement of power for the steel industry would be 7000 MW by 2019-

2020, requiring an additional investment of Rs 24500 crore.

In order to achieve the goal of 110 million tones of steel production by

2019-20, the NSP seeks to remove the supply-side constraints to

the growth of this industry in an open, global ly integrated

and competitive environment. The country would need an investment in

the range of Rs.1 lakh to 1.2 lakh crore in creation of additional steel

capacities by 2011-12.Related areas like mining and power will require

an additional investment of Rs. 25,000

to3 0 , 0 0 0 c r o r e . F u r t h e r , t h e r e i s a n e e d t o r e t a i n f l e x i b i l i t

i e s i n t h e f i n a n c i a l s y s t e m t o e nc ou ra ge in no va ti on . T he re ar e

many areas of technolo gy develop ment and adopt ion , which can

be ri sky but al so highly rewarding. Venture cap italism needs to

be promoted at a greater pace for early adoption of emerging technologies.


24/48


25/48

25

have got the benefits from EXIM as tax relief. When Narendra Modi

b ecame th e Chie f Min is t e r th e s t ee l indus t ry has s t ar t ed g rowing

rapidly and the profit increased by Rs 9 to Rs. 13 per Kg. The existing regime

of liberalization, decontrol and deregulation of industry in the country

has opened up new oppor tun i t i e s fo r the expans ion o f the s t ee l

indus t ry . Wi th a v iew to acce le ra t ing the g rowth o f the s t ee l

sec to r and a t t a in ing the v i s ion o f Ind ia becoming a deve loped

economy by 2020 , the Min i s t ry o f S tee l fo rmula ted a National

Steel Policy (NSP)in 2005. The following are the salient features of the NSP :-

(1) The NSP set out a broad roadmap for the Indian Steel Industry in its

journey towards reform, restructuring and globalization.(2 ) The long - te rm

goa l o f the NSP i s tha t Ind ia shou ld have a modern and e f f i c i en t

steel industry of world standards, catering to diversified steel demand.

The focus of the policy is to achieve global competitiveness not only in terms

of cost, quality and product-mix but also in terms of global benchmarks of

efficiency and productivity. Government has a scheme for routing the

allocation of steel material from main producers like SAIL, RINL, and

TATA STEEL to SSI units, and other government departments (up to30% of the

total allocation) through the small scale industries corporation, SSICs

and also through National Steel Industry Corporation NSIC where SSICs are


26/48

26

either defunct or not

i n e x i s t e n c e . I n o r d e r t o e n s u r e t h a t s m a l l s c a l e i n d u s t r i e s

o b t a i n t h e s e ra w ma t e r i a l s as reasonable prices , the government

provided nominal handling charges of approximately Rs.500 per tone

to the corpora t ion so tha t the corpora t ion supp ly the s t ee l

material as the doorstep of the SSI units. Political compulsions were

the on ly r eason fo r s t ee l companies to cu t p r i ces . Otherwise ,

steel prices have been looking up quite some time now and there has

been good demand of s t ee l in domes t i c as wel l a s in t e rna t ional

mar ke ts . I ns te ad of pri ces goi ng up , th ey are declining. The

government had recently effected a 5% customs duty cut on non-alloy steel. Steel

prices to go up as Railways increases iron ore freight rates in a move that

may increase input cost for steel

Cos like Tata Steel, Essar, Jindal and Ispat Industries, Indian Railways

has decided to increase the freight rate of iron ore by around5%. The

decision would push up freight rates by about Rs 100-200 per tone

depending on the distance. The decision was taken to soothe the

inflationary pressure. The p rice of the ore comprises between 30% to

45% (depending on the kind of iron and steel) of the total price of steel.

Currently, the price of steel is around $750-900 per tone in the global


27/48

27

market. The government has been fighting inflation due to rise in prices of

various raw materials, iron ore being one of them. The Railways transported

53.59 million tone of iron ore for exports in2007-08


28/48

28

6.Implementation of the National Steel Policy (NSP), 2005:Tata Iron & Steel Company Freight equalization Scheme was withdrawn in

January, 1992. However, with the coming up of new steel plants in

d i f f e ren t pa r t s o f the coun t ry , i ron and s t ee l p roduc t s a re f r ee ly

available in the domestic market. Recent years have witnessed

unprecedented turmoil in the global steel market. The crisis in

the in te rna t iona l s t ee l marke t migh t be a t t r ibu ted to the misba la

nce between capacity, dema nd and p roduc t ion and cons eque nt d rop

in p r i ces . Throughou t the wor ld the re i s

a na p p a r e n t o v e r c a p a c i t y ( e s t i m a t e d t o b e b e t w e e n 1 0 0 M t

- 1 5 0 M t ) i n t h e s t e e l s e c t o r . According to the IISI, the companies have

been selling their products below costs to survive in global competition. Since

2001, while growth has been negative in most mature markets, Asia

has maintained steady growth rate. The Asian production growth has

mainly been driven by the surge in steel demand and production in China.

The huge Chinese appetite for steel has led the 10.2%surge in output. The

growth in Chinese steel demand, generated mainly by demand from

infrastructure sector is a beacon for Indian steel since both the nations

are comparable on many counts.


29/48

29

(C)

The Indian steel manufacturers are faced with some major problems and

concerns, which work as inhibi t ing factors to their effor t towards

gaining the competit ive edge. A few of these are:

Unremunerative Prices:

Stagnating demand, domestic oversupply and falling prices in the last

few years have hit Indian steel makers. Barring the sporadic rise in demand in the

recent months, it has suffered from unremunerative prices to the extent

that companies have been finding it difficult to maintain capital costs.

Stagnating Demand for Steel:

According to Mc-Kinsey and Co the domestic steel industryis set to witness

a 33% over capacity in the hot rolled coil sector by the year 2003 when

thedomestic capacity currently at 45%, in long products and semis is

expected to drop at 22% by that year. The non-flat products are also likely to

face an over capacity of over 21.4%.


30/48

30

Lower Consumption:

Steel consumption in India over a period of time has exhibited astrategy correlation

to GDP growth (correlation coefficient of 0.9855 between 1960-1961and 1996-

1997) and gross domestic capital formation (0.981).The correlat ion with GDCF

has been 1.0 for the period FY 1994 to 1999. As investmentsdeclined

from 1996-1997 onwards, steel consumption also decreased. Failure to

DevelopTrade Especially International Trade

.

The countries which have achieved major growthincluding growth in

steel industry, like Japan, China and South Korea have largely used their trading

houses to develop their markets abroad. In India, they have singularly failed to do

so.As a result, Indian steel industry does not have a major presence even

in the neighboringcountries.The reasons for the same include lack of profit

motive, wrong scale of assets, little or no co-ordination between plants and

markets, inappropriate logistics/locations, over-manning, poor investment

decisions, lack of innovation and inadequate investment in requisite areas.


31/48

31

Slow Industry Growth:

The l inkage be tween the economic g rowth o f a coun t ry and

thegrowth of its steel industry is strong. The Indian steel industry is no

except ion. The growthof the domest ic steel industry between 1970

and 1990 was s imi la r to the g rowth o f theeconomy, which as a

whole was s lugg i sh . Th i s s lugg i sh g rowth in the s t ee l indus t ry

hasresulted in enhanced rivalry among existing firms. As the industry is

not growing the onlyother way to grow is by increasing one.s

marke t sha re . Consequen t ly , the Ind ian s t ee l indus t ry has

wi tnessed spur t s o f p r i ce wars and heavy t r ade d i scoun t s , which

h as don eIndian steel industry no good.

Social Factors:

Corpora te Soc ia l Respons ib i l i ty (CSR) has been to deve lop the

villages as model steelvillages. All profitable steel PSUs have made

commitments to the cause of CSR and haveearmarked at least 2% of

the i r d i s t r ibu tab le su rp lus fo r CSR ac t iv i t i e s . The to ta l budge t

a l loca ted fo r CSR in r espec t o f the PSUs fo r 2007-08 i s a round

Rs . 23 0. 00 cr or e. CS R activities focusing on environmental care,


32/48

32

education, health care, cultural efflorescence and peripheral

development, family welfare, social initiatives and other measures are

underway in the PSUs. In view of the calamity brought in by the floods in UP,

Bihar and Assam, some of the PSUs organized immediate relief measures in these

affected states SAIL, NMDC Ltd. and RINL contributed Rs.5 crore, Rs.4

crore and Rs.2 crore respectively towards the flood relief measures. All

the main producers have been urged by the Ministry to adopt villages

a r o u n d t h e i r p l a n t a n d a s p a r t o f t h e i r C S R a c t i v i t y a n d

h e l p . U s e o f s t e e l h a s b e e n emphasized in items such as storage beans,

bullock carts, buildings such as school buildings, panchaya t h a l l s , h ea l th

cen t r e bu i ld ings , wa te r t anks , wa i t ing sheds e t c . 129 v i l l ages

a re being developed into model steel villages.

Child labour is the issues of small scale sector of the steel industry.

Children were exploited by paying them low wages. A decision was taken

to have at least one dealer in each district in order to make availabl

esteel items to common man. In order to ensure the availability of

commonly used items of steel in the rural areas across the countr y,

SAIL and RINL are expanding their distribution networks at a fast pace


33/48

33

with the objective of having dealers in all the districts of the country.

Pr ef er en ce fo r SC , ST an d OB C ent and occupation.As id e it s lo ng

hi s to ry , Ta ta S tee l has wr i t t en the book o n wel fa re measures

in Indi an Industry many of which, have been subsequently followed by others i

Safety Measures

For improvement in the overall safety situation in the Iron & Steel industries in

Indiafollowing remedial measures need to be taken up:

T i g h t e n i n g t h e l e g a l s y s t e m s o t h a t a n y i n s t a n c e o f v i o l a t

i o n o f s a f e t y p o l i c y , w h e t he r b y p u bl i c s e ct o r o r p r iv a te

sec to r , does no t go unpena l i sed . The sys tem

o f f a c t o r y i n s p e c t o r a t e , s a f e t y o f f i c e r s a n d l e g a l f r a m e w o

r k h a s t o b e r e f u r b i s h e d accordingly. There should be up-gradat ion

in legal provisions to take care of changes intechnologies / work

environment so that loopholes are plugged as far as possible.

OHS Management sys tem as pe r ILO gu ide l ines and OHSAS

18001 should b eadopted in all plants.


34/48

34

In India, many outdated technologies viz., twin hearth furnace, ingot

making etc. arestill being practiced in some steel plants. These

processes are hazardous to personnelworking there and it is required to phase

these out immediately to improve safety in such plants. Apart from this, new

technological development will also facilitate attainment of safe work

environment.

F i r e m o d e l i n g a n d h a z a r d r i s k a n a l y s i s s h o u l d b e d o n e i n

a l l p l a n t s f o r b e t t e r assessment of inherent risk/ hazard:

Social Audit (2002-03)

The Soc ia l Audi t be ing r epor ted , fo r the pe r iod 1991 2001 ,

wa s co nd uc te d du ri ng th e period 2002- 03 within the framework of


35/48

35

the same Terms of Reference as that of the 2ndSocial Audit. The

Audit Panel comprised of the following members recommended by

theBoard:

Ms. Pheroza Godrej

Justice S. K. Mohanty

The late Justice D. N. Mehta (Retd.)(Chaired the Panel until June 2003, when he

suddenly passed away)

Ms. Tarjani Vakil, MD, EXIM Bank (opted out during the initial phase of the

Audit)The Company nominated Mr. Ajit Jha, Resident Representative,

New Delhi, Tata Steel, as the Secre tary and Chief, Co-ordination ,

3rd Social Audit, to provide management support to the Audit Panel,

and later in the evaluation process, his role mandated to be independent

of intra-company domain. Subsequently, Mr. S. K. Suman, Head, Co-

ordination, Tata Steel was nominated by the management to provide

research and report assistance to the Tata Iron & Steel Company Panel. Mr.


36/48


37/48


38/48

38

2. Management Team

- Tata Steel has a highly credible management team who has displayed their skills

in expanding the company through inorganic route. The company has successfully

acquired Nat Steel of Indonesia, Millennium Steel of Thailand and more

importantly Corus. The companys virtuosos of finance have been able to find

innovative ways to tackle the companys bulgeoning debt and keep thebottom line

in the green zone despite lowering demand and huge debts accumulated.

3. Information Technology

- The entire mining operation of the Company is safeguarded against accident

occurrence. Proactive measures are undertaken to ensure the employee's health and

productivity through ergonomically designed work stations and by protecting them

from occupational hazards. All its mines are ISO-14001 -Environmental

Management System Certified. Tata Steel's collieries use 'Surpac', a state-of-the-art

mine planning software that estimates the volume of coal in every seam. This

software is coupled with qualitative detailing that focuses on output consistency.

To maximize productivity and utilization, a voice and data equipped Global

Positioning System is used, which helps to supervise mining activity for machine

movement and engine status.


39/48

39

4. Innovativeness of TATA Steel with respect to its competitors

- Tata Steel has the lowest operating cost for steel manufacture in the world

Further it has displayed effective means in adopting an eco-friendly and

sustainable approach towards the manufacture of steel thus

Proactive measures are undertaken to ensure the employee's health and

productivity through ergonomically designed work stations and by protecting

them from occupational hazards.

5. Adaptability of the company in the fast change of the environment

- Tata Steel has displayed immense agility in the recent past during the global

financial tsunami. Its virtuosos of various fields have adopted various methods like

lowering of production and even shutting down of steel plants owing to the lack of

demand, managing the balance sheet efficiently etc. The company has 70% of its

procurement of raw materials for its operations in Asia through long term contracts

and so its margins can be shielded from the nuances of the volatility of

the financial markets


40/48

40

6. Brand value

- The TATA brand owing to its highly ethical and a socialistic approach to

business have made its name synonymous to trust. After the acquisition of Corus

another powerful brand, the brand value of the company has enhanced further.

7. Corporate governance

- Tata Steel has had impeccable record for corporate governance. It has set the

benchmark in global corporate governance principles of transparency,

accountability and equity for others to follow. Tata Steel has been consistently

receiving prestigious awards at both the national and the international arena.

Recently it bagged the Best Governed Company Award for corporate practices

presented by Asian Centre for Corporate Governance.

8. Excellent integration with Corus

Corus has a great reserve of around2000 metallurgists and technology which

could be exploited by Tata Steel on several fronts.


41/48

41

9. Excellent procurement philosophy

- Tata Steel has around 70% of its supplies through long term contracts. Thus it can be

shielded from the volatility of the financial markets.

10. Spawning upon opportunities

- Tata Steel has been amongst the earliestto spot the escalation in the demand for

steel in the forthcoming years. It hashence invested heavily in the expansion of its

existing facility at Jamshedpurand is setting up other green field projects at Orissa,

Jharkhand etc


42/48

42

8.BUSINESS PLANTata Steel Consulting provides business planning services to a range of industrial

sectors, including:

Iron and steel - all long and flat products

Tube and pipe

Foundry and forge products

Rail products

Iron ore mining

Engineering steels

Wire products

Metal fabrication industries

Steel distribution and service centres

Ferro alloys

The business planning group operates independently or in tandem with other

groups within Tata Steel Consulting and sometimes in collaboration with external

organisations such as management consultants and investment banks. As a result it


43/48

43

can always call upon an exceptional range of skills and experience to meet the

diverse requirements of its clients.

Clients

The business planning group has assisted a broad range of clients, in public and

private sectors, situated in a large number of countries.

Expertise

Assignments undertaken are diverse in terms of the problems and issues addressed.

Tata Steel Consulting has provided strategic assistance to numerous manufacturing

companies.

Methodologies

A wide range of expertise and methodologies is employed by the business planning

consultancy group. The first stage of assignments often requires detailed analysis
http://www.tatasteelservices.com/en/products_and_services/consulting_services/business_planning/clients/http://www.tatasteelservices.com/en/products_and_services/consulting_services/business_planning/expertise/http://www.tatasteelservices.com/en/products_and_services/consulting_services/business_planning/methodologies/http://www.tatasteelservices.com/en/products_and_services/consulting_services/business_planning/methodologies/http://www.tatasteelservices.com/en/products_and_services/consulting_services/business_planning/expertise/http://www.tatasteelservices.com/en/products_and_services/consulting_services/business_planning/clients/


44/48

44

of market prospects for the client company. This can involve extensive interview

programmes in the metals consuming sectors as well as economic and demand

forecasts.

New Delhi: The world's seventh largest steel maker Tata Steel Ltd, a part ofIndia's diversified business conglomerate Tata Sons Ltd, plans to sell its

stake in various group companies, including Tata Motors Ltd, to raise fund

for expansion and repay high cost loans, the Business Standard reported

citing unidentified bankers.

The steel major may garner as much as Rs 72 billion via selling its stake in group

companies, the bankers told the paper.

Presently, Tata Steel owns 5.6% equity stake, worth Rs 50.14 billion, in Tata

Motors. Besides, it also holds 51% stake in Tata Sponge; 73.4% in Tinplate India;

54.5% in Tayo Rolls; 32.5% in TRF Ltd; 0.7% in Tata Power and 50% in Dhamra

Ports.


45/48

45

The steel making company may sell these stakes to the holding company Tata Sons

Ltd to raise funds, which will be utilized for expansion in the Odisha state and

repay higher cost loans, bankers told the daily.

Early this year, Tata Steel was holding discussion with Adani Group to divest its

holding in the Dhamra port project (Odisha), media reports said, adding that the

company is now awaiting the Odisha government's approval to raise capacity so

that it gets a better valuation for the loss-making port company.

Tata Steel plans to spend around Rs 420 billion in its Odisha plant in two phases.

Total expenditure for the phase I has risen up to Rs 240 billion from the earlier

estimated Rs 190 billion on account of currency fluctuation and other cost overrun

Tata Steel Europe has won an order to manufacture 60,000 tonnes of high-quality rail for a new high-speed line linking the two holy cities of Makkah

and Madinah in Saudi Arabia.

The new railway will allow millions of pilgrims to cross the 444km between

the two cities at speeds of 320kmh.

The line will cross desert, withstanding temperatures ranging from freezing

to 50C, as well as sand storms, flash flooding and shifting dunes, a statement

said.


46/48

46

Grard Glas, rail sector head for Tata Steel, said: "This is a prestigious

project which will see the holy cities being linked by rail for the first time.

"Tata Steel is delighted to be contributing to this high-speed line, which will

have to overcome some major challenges presented by building a high-capacity

rail line across some of the most extreme terrain in the world."

Steel for the project will be made at Tata Steel's Scunthorpe plant in the UK

before being rolled into rail in lengths of 25 metres both there and at the

company's plant in Hayange, Northern France, he said.

Work on producing the rail will start at the end of this year and is expected

to continue throughout 2014.

Tata Steel rail has already been used successfully in similarly challenging

conditions for projects in Brazil and Mauritania, the statement added.

Last year the Saudi Railways Organisation awarded the contract for the

finalphase of completing, running and maintaining the Haramain High-

Speed Rail Project to a group of Spanish infrastructure, construction and

technology companies.


47/48

47

The new line is expected to carry around 160,000 people a day - and even

more during the Hajj pilgrimage. They will be transported on a fleet of 35

new high-speed trains.

The project started in 2009, with an estimated cost of more than 12bn. The

new rail line is set to open to the public in late 2014 or early 2015.

Besides the two holy cities, the line will have three other stops, two in

Jeddah for commuters and one in Saudi Arabia's new King Abdullah

Economic City, a residential, industrial and commercial macro-complex that

is still being built.

Spanish construction companies Copasa, Imathia and OHL are responsible

for building the line's superstructure and the track bases, as well as for the

line's mechanisms.


48/48

9.BIBLIOGRAPHY:Websites:

(1) http://steel.nic.in/Perfomance%20budget%20(2005-06)Englishchap2.pdf

(2)http://www.ieIndia.orgpdf8989MM104.pdf

(3)http://article.wn.com

(4)http://steel.nic.in/

(5)http://www.tatasteel.com

(6)http://greenbussinesscentre.com/images/photos/Exp48.pdf

(7)http://www.tatasteel.com/newsroom/awards.asp

(8)http://www.ieIndia.orgpdf8989MM104.pdf

(9)http://www.tatasteel.cominvestorrelations2002pdfsmda.pdf

(10)http://steel.nic.in/Performance%20Budget%20(200506)Englishchap2.PDF

(11) http://www.tatasteel.cominvestorrelationsan200708investor-presentation-feb0

8.pdf

(12)http://www.slideshare.net/pankajhambarde/tata-corus-ppt-presentation

(13) http://www.tata.com/company/Articles/inside.aspx?artid=KfibEhYKXcE
http://www.ieindia.orgpdf8989mm104.pdf/http://article.wn.com/http://article.wn.com/http://steel.nic.in/http://steel.nic.in/http://www.tatasteel.com/http://www.tatasteel.com/http://greenbussinesscentre.com/images/photos/Exp48.pdfhttp://www.tatasteel.com/newsroom/awards.asphttp://www.tatasteel.com/newsroom/awards.asphttp://www.ieindia.orgpdf8989mm104.pdf/http://www.tatasteel.cominvestorrelations2002pdfsmda.pdf/http://steel.nic.in/Performance%20Budget%20(200506)Englishchap2.PDFhttp://steel.nic.in/Performance%20Budget%20(200506)Englishchap2.PDFhttp://steel.nic.in/Performance%20Budget%20(200506)Englishchap2.PDFhttp://www.slideshare.net/pankajhambarde/tata-corus-ppt-presentationhttp://www.slideshare.net/pankajhambarde/tata-corus-ppt-presentationhttp://www.slideshare.net/pankajhambarde/tata-corus-ppt-presentationhttp://steel.nic.in/Performance%20Budget%20(200506)Englishchap2.PDFhttp://www.tatasteel.cominvestorrelations2002pdfsmda.pdf/http://www.ieindia.orgpdf8989mm104.pdf/http://www.tatasteel.com/newsroom/awards.asphttp://greenbussinesscentre.com/images/photos/Exp48.pdfhttp://www.tatasteel.com/http://steel.nic.in/http://article.wn.com/http://www.ieindia.orgpdf8989mm104.pdf/

A Project Report on EM

Documents

Transcript of A Project Report on EM