Jamshedpur: Tata Steel Ltd wants to double its return on investment to 32% by 2012, the company’s managing director B. Muthuraman said, as he unveiled a business plan called Vision 2012 during the founder’s day celebration in Jamshedpur which marks the birthday of Tata Steel’s founder Jamsetji Nusserwanji Tata, who set up the steel maker’s facility in this city almost 100 years ago.
“It’s a stiff target, but if achieved, it would make this company a global benchmark in value creation,” said Philippe Varin, who is the chief executive officer of Corus and a non-executive director on the board of Tata Steel.
Tata Steel and its wholly owned subsidiary Corus have lined up several steps to achieve this target: Faster implementation of ongoing expansion plans, improving product mix and cost efficiency, tapping new sources of raw material and re-engineering two Corus plants.
“The vision document, co-created by the people at Jamshedpur, the UK, the Netherlands and South-East Asia sees Tata Steel emerging as a global benchmark in safety, value creation, environment, and (as) an employer of choice,” Muthuraman said. The document also seeks to improve profitability and return on investment by using the strengths of Tata Steel as well as Corus.
Tata Steel acquired Corus in January 2007 for around $12 billion (Rs53,196 crore then).
The plan also requires Corus to tap new sources of raw material. “We used to have mines many years ago, but sold them thinking it wasn’t good business. But now it’s absolutely crucial to have mines,” Varin said. Currently, Tata Steel and Corus source about 20% of their raw material needs from captive mines. The companies want to increase this to 50%.
The founder’s day celebration was attended for the first time in 15 years by Tata Steel’s former chairman and managing director Russi Mody, who left the company in the early 1990s after a spat with the current group chairman Ratan Tata and the former chief of Tata Sons Ltd, the late J.R.D. Tata.