China: The Tata group is looking to significantly expand its activities in China across a range of businesses to tap it as an export market and manufacturing base, a senior company official said.
Alan Rosling, executive director of Tata Sons, the holding company of the Tata group, said that most of the major businesses of the salt-to-software conglomerate were now actively seeking opportunities in China.
“We’re looking at significant growth in China in terms of revenue and in terms of purchasing,” Rosling said in an interview on the sidelines of the annual Boao Forum for Asia held over the weekend on the southern Chinese island of Hainan.
Tata is building an auto components factory in Nanjing in eastern Jiangsu province, and one of its associate firms had recently completed a refractory plant in Dalian in the Northeast.
Rosling said that the group currently had a list of about 12 potential new investment projects in China. While he declined to comment on how much investment the Tatas are looking to make, Rosling said the group is hoping to get into the hotel sector and is looking at providing value-added telecommunications services.
Its steel unit, which already has operations in China, is looking to expand its wire business there, he said.
Tata Steel Ltd grabbed headlines earlier this year with its successful takeover bid for Anglo-Dutch group Corus.
Tata Consultancy Services Ltd, which recently formed a joint venture with the government’s National Development and Reform Commission and Microsoft Corp., is growing quickly as it takes on more domestic clients, in addition to its more traditional customer base of multinational firms, he said.
At least three other Tata companies are looking to set up operations in China, Rosling said, but declined to name them. “Much of what we’re doing will be organic and greenfield new investment, some of it will be joint ventures, and some of it might be acquiring assets,” he said.
One area in which the Tatas do not plan to set up manufacturing facilities in China is the vehicle business, he said, in part because of Beijing’s restrictive entry requirements for the auto sector.
“At this stage at least, for Tata Motors there are other markets which are higher priority,” Rosling said.
But that did not mean Tata Motors Ltd would not look to China at all—it had decided to start using the country as a major procurement centre, he said. “Each business looks at China and can’t ignore China and depending on your competitive position and the regulations and the market, will approach China in a different way,” he said. “The key point is that nobody in the group can ignore China.”
But involvement with China would not all be about the Tatas going there—the group is also looking to partner with Chinese companies in India, Rosling said.
Ultimately, China is one of the stimuli behind Tata’s current push to globalize because it will be a growing source of not only opportunity but competition, Rosling said.
“Part of the drive that has entered the soul of the Tata group in the last number of years comes from looking at China and seeing what China has done, and thinking that that sort of speed and level of ambition is required,” Rosling added.