Enhancing Growth through Strategy

The Tata Steel Group’s vision will be actualised through a strategy of increasing the quality of earnings from its existing assets coupled with strategic growth.

The Tata Steel Group’s goal is to play in the premier league of the global carbon steel industry, and its Vision is to become the world steel benchmark in Value Creation and Corporate Citizenship.

Benchmark in value creation
Value creation for the Tata Steel Group means making a difference in two ways. First, through a competitive offer, the Tata Steel Group must become the supplier of choice, delivering premium products and services and creating value for its customers. Second, through innovation and developing leading-edge solutions in technology, processes and products, it must secure its long term competitiveness.
This will be achieved through a strategy of increasing the quality of earnings from its existing assets coupled with strategic growth.

Increase the quality of earnings from its existing assets
The Tata Steel Group has set itself an ambitious target to improve the return on invested capital of its existing assets to 30% from the current 19% over the next 5 years.

The Group will pursue the optimisation of its European assets, dispose and restructure assets that are of low profitability and pursue differentiation of products and services. It will also continue towards achieving benefits through continuous improvement of processes and products; from the synergies from the acquisition of Corus. Plans are in place to meet the initial synergy target of USD 450 million per annum. Innovation is the cornerstone of value creation and the Group is committed to investing in leading edge technology, process innovation and product development.

The Tata Steel Group has already begun converting this strategy into action. For example, in April 2008, the Tata Steel Group disclosed a programme to restore the long term competitiveness of its packaging assets in Europe with the closure of its Bergen site (Norway), and the restructuring of its Trostre operation (United Kingdom). Other examples are the major investments that are currently being implemented at its plants in IJmuiden, Port Talbot and Scunthorpe which will drive the Group towards product differentiation and improve operational efficiency to reinforce its existing competitive position.

Generate strategic growth
The Tata Steel Group will pursue strategic growth through capacity expansions and securing access to raw materials.

The Group is expanding its capacity in India through the expansion of its operations in Jamshedpur to 10 million tonnes per annum and through the construction of a 6 million tonnes per annum ‘greenfield’ site in Orissa. Other greenfield opportunities in India and across Asia are being assessed.

The Group is also looking at further integration upstream in raw materials with an ambition to achieve 100% self-sufficiency in India and around 50% self-sufficiency in Europe over time. Agreements for the exploration of iron ore in the Ivory Coast, coal in Mozambique and limestone in Oman have already been signed and opportunities are under review in India to support the Indian greenfield projects; and in Africa and South America, primarily to support its European steelmaking assets.

Benchmark in corporate citizenship
Corporate citizenship involves providing a safe working place, respecting the environment, caring for its communities and demonstrating high ethical standards. The Group’s ambition of becoming the benchmark of the industry in corporate citizenship has been translated into clear goals and actions.

The Group is committed to creating a safe working environment for everyone. Whilst it has achieved significant progress over the last few years, it has a goal to improve further, with lost time injury frequency improving to 0.4 by 2012 to becoming best in class. New actions will be introduced in the areas of high hazard facilities, occupational safety and health and a review of the management system and organisation is on the agenda.

Climate change is probably the biggest challenge ever to confront the steel industry. In response to this challenge, the Tata Steel Group will be part of the solution and is committed to minimising the environmental impact of its operations and its products. It has a goal to reduce its CO₂ footprint by at least 20% by 2020 compared to 1990. To meet this objective, the Group will, for example, continue to improve its current processes, invest in breakthrough technologies and develop new products and services that reduce the environmental impact over the product lifecycle. To improve its processes, priority is given to energy conservation schemes; in technology break-throughs such as Ultra Low Carbon Steel making and in other innovative projects where the Group has proprietary technology.

In terms of communities, the Tata Steel Group promotes and encourages economic, environmental, social and educational development. In India, its focus is on fulfilling basic requirements including healthcare, food security, education and income generation through the development of rural infrastructure, empowerment and community outreach programmes. In Europe, it is actively involved in a broad range of community initiatives, such as being premier sponsor of the British Triathlon.