Review of Operations – India

The year 2007-08 was a challenging year in terms of production at the Jamshedpur Steel Works.

There were some major highlights that included outstanding performances by many departments of the company that surpassed the previous year’s production.

There were however, also certain challenges. After a long time in recent history, the production of Hot Metal, Crude Steel and Works Saleable Steel was marginally lower than that of the previous year. The major reasons were power outages in early FY 2007-08, poor health of coke oven batteries, blast furnace outages and shutdowns taken for implementing our capacity expansion project (1.8 mtpa) during the year.

The Raw Material Division achieved an outstanding performance with a 4.5% increase in Raw Coal production at Jharia Collieries (with lowest ever ash level of 15.47% from Bhelatand and 16.40% from Jamadoba in clean coal) and highest ever raw coal production of 5.62 mt at West Bokaro Collieries (with ash level of 13% in clean coal).

The Company also achieved the lowest ever Specific Energy consumption at 6.655 GCal/tcs. Dust emission reduced from 0.96 kg/tcs to 0.88 kg/tcs; and there was the highest ever usage of melting scrap of 0.42 mt at the steel melting shops.

The overall safety performance improved at Steel Works, Jamshedpur and outlocations, as compared to last year. A 22% reduction in the reportable accidents and 25% reduction in frequency rate was reported during the year. Process Safety Initiative has been started at two departments in the Steel Works Jamshedpur.

Customer interface initiatives resulted in further improved performances. Some of the achievements included the Tata Shaktee brand crossing 1 mt sales landmark, since its launch in February 2000; the approval obtained for skin panels from Hyundai, Maruti, Ford and Mahindra & Mahindra for their respective products; and the introduction of High Strength Rebars (Fe500) and Super ductile re-bars in the construction segment.

The Company’s IT division entered into Business Process Consulting activity for Tata Steel’s overseas units and Business Process Improvement was done for Tata Steel Thailand and NatSteel Asia.

In terms of Industrial Relations, the Company continued to enjoy industrial harmony in its business operations in all locations. The maintenance organisation at the Jamshedpur works was restructured in the form of a centralised group in order to facilitate greater efficiency of plant operations.

Performance landmarks at various levels
Tata Steel’s various divisions achieved significant performance landmarks. The Bearings division developed bearings for the Nano. The Tubes division achieved an overall sales growth of 7% over FY 2006-07. The division has developed a number of new products mainly in the following areas:

1. Large diameter structurals for infrastructure projects including four airports – Amritsar, Jaipur, Bengaluru and Hyderabad,
2. High precision tubes.

The Wires Division obtained approvals from Goodyear and JK, for motor tyre bead wire and from Dubai Control
Laboratory, Dubai for Low Relaxation PC wire.

The Ferro Alloys & Mineral Division (FAMD) achieved highest ever excavation at Sukinda Chromite Mine; the highest ever Ferrochrome production at Bamnipal; the highest sales in the domestic market, and the highest ever export of Ferro Alloys through a successful ramp up of production at a newly acquired unit known as Rawmet.

The Growth Shop unit known as Tata Growth Shop (TGS) achieved its highest ever turnover and played a crucial role in the progress of 1.8 mtpa expansion project of Jamshedpur Steel Works by supplying all critical equipment for H Blast Furnace, CC3, and Cranes on time.

Performance Improvement Initiatives
Tata Steel continued its improvement journey through“Aspire T3” during the year. Aspire T3 is an integration of TOC (Theory of Constraints), TQM (Total Quality Management) and Technology. It provides the platform for setting aspirations and enabling breakthrough and continuous improvements. Through this programme, breakthrough processes were implemented in Sales Solutions and in Mining. The Company adopted Critical Chain Project Management to plan and execute projects (both maintenance and expansion type) at the earliest within the limited means. With the help of CCPM, these projects will now be completed well before schedule. The TOC techniques notched up savings of USD 38 million in 2007-08.

Market Initiatives
Tata Steel rolled out two specific market based initiatives to differentiate itself from other suppliers. This included the Pull Based Replenishment offer for distributors to cater to the final customer needs in a much more proactive manner and to control its pricing structure on a real time basis; and Vendor Managed Inventory (VMI) offer for OEM customers, ensuring higher availability to key customers thereby creating value for them. Other successful initiatives during the year included the introduction of TISCON Fe 500 grade, with a 100% customer conversion; the launch of Super Ductile TISCON for earthquake prone NE India; and the launch of Tata Steelium in Sri Lanka and of Tata Agrico in Dubai and Quatar.

A service reliability of over 83%, a benchmark in the steel industry, was achieved through a robust back end supply chain redesign based on TOC buffer management principles.