In conversation with
Mr Harish Pathak,
Executive-in-Charge,
Wire Division

TSN: What is the current position of Tata Steel in the wire business in India and globally?

HP: The Wire Business of Tata Steel (including NatSteel) is today amongst the top four players in the business across world. It has a dominant market share in the Indian sub-continent and a significant share in Middle East, Australia and New Zealand. The acquisition of NatSteel’s wire units, has given Tata Steel a presence in South East Asia and China.

TSN: What are the challenges that the Company faces in the business segment?

HP: The challenge that the Company faces today are fundamentally on four fronts. These are profitability, developing a Wire Technology Centre in India which will service our wire units across geographies, as well as attracting and retaining the best people to work at the Technology Centre, a responsive Operations and Supply chain with geographically dispersed units and enhancing environmental performance.

TSN: What is the strategy adopted by the Company?

HP: The Company has, firstly, opted to grow aggressively through the expansion of existing capacities. It will also acquire units such as NSD Bangalore and Lanka Special Steels and will outsource capacities close to the markets. We have already created 13 External Processing Agents. Secondly, the Company has initiated product development with the application of its own technology. Thirdly, Tata Steel has successfully built competitiveness through continuous cost reduction and process up gradation.

TSN: What are the initiatives to improve your marketshare?

HP: The Nai Disha initiative focused internally to improve yield and machine performance, thereby achieving cost reduction. It did not focus on improving market share. However, in order to improve market share, the Wire Division has institutionalised its Market Development Process. It has also implemented the structured segmentation process. Customer relationship building approaches specific to segments were developed, for example the contact plans, technical meets, CFTs, etc for the institutional segment. Wiron Parivar is on the web and distributors in the Retail segment regularly receive newsletters.

To build on these, the Division’s back-end processes were IT enabled. IT systems had to be brought to the level of best in class. To achieve this, we implemented SAP in sales, purchase and finance functions. We also installed the Lotus Notes system and are now completely integrated with Jamshedpur’s systems. Another important on-going initiative is to infuse the TPM culture throughout the Wire Division. One plant has already launched TPM and another is ready for launch.

TSN: Do you believe the introduction of branding has made a difference to the market visibility of the Division?

HP: The ‘Tata Wiron’ brand of Wire Division was launched in June 2004. This helped Wire Division tremendously by way of greater visibility and a better premium on its products in the retail market. Tata Wiron brand was initially rolled out for galvanized wires, and has now been expanded to additional products including binding wires, CO2 welding wire, steel wool wire etc.

TSN: How will Tata Steel’s investments in NatSteel, Lanka Special Steel and Millennium Steel add to the Wire Division’s overall competitiveness?

HP: NatSteel has two wire drawing companies in its fold: they are Siam Wires (SIW) in Thailand and Wuxi Jinyang Metal Products (WJMP) in China. We are in the process of integrating the Wire Business in India, China and Thailand under one business. These companies have helped Tata Steel gain a foothold in the high growth ASEAN & Chinese markets, and will act as a nucleus for future growth of Wire Business. Lanka Special Steels has helped the Wire Division become competitive in the Lankan market.

TSN: How are the employees being prepared for the rapidity with which the Division is moving?

HP: To prepare employees for the rapid pace of change, their developmental needs are being identified through Personal Development Plans, and are being addressed in various ways. These include planned job rotation; management development training; functional training; training on strategic initiatives, such as Aspire, Six Sigma, Theory of Constraints and TPM; specialised training such as Strategic Planning, TBEM etc; a skill matrix has been prepared for workers, which is periodically reviewed and updated through trainings, with the aim of achieving maximum multi-skilling.

Initiatives are also being undertaken to improve the Supply Chain through the implementation of SAP-MM module. With the rolling out of the Theory of Constraints (ToC) Concept, bottlenecks in equipment are being addressed. In addition, we expect to roll out the pilot projects for Vendor Managed Inventory to key customers by March '06.

TSN: What are your future plans in terms of capacity expansion, modernization and re-engineering of processes?

HP: To enhance capacity two major hubs of wire manufacturing are planned, one at Tarapur and the other at ISWP, Jamshedpur. The facilities at Tarapur will produce specialty wires aimed at product differentiation through technology and service, while the Jamshedpur facilities will cater to merchant wires, with a focus on cost and operational efficiencies. Besides these, capacity is being increased at the Doddaballapur Wire Plant – Bangalore (DWP) to make manufacturing cost effective apart from achieving better service for the customers in the Southern region. We also have our eye on some good units in India and SEA, for which discussions are currently in progress. Modernisation will also play a key factor with the latest technology being brought in for key processes such as pickling and galvanising, and for strategically important products- including MTB, Spring wires.

The key business processes of the Wire Division will be reengineered based on the recommendations of the ToC and Deming teams; operational processes will be standardisation across EPAs and new facilities. There will be a greater level of interaction between all units in India as well as the overseas units of NatSteel to bring in best practices; as well as the export business will be integrated to ensure better focus on international markets and customers.