Mumbai: In a surprise choice, Tata Steel Ltd named T.V. Narendran as managing director-designate, India and South-East Asia, and has inducted him as additional director on the board. Narendran is currently vice-president, safety and flat products.

The incumbent H.M. Nerurkar is retiring next month.

The board has also appointed group chief financial officer Koushik Chatterjee as the group executive director, finance and corporate.

Media reports, some written as early as last year, had speculated the next managing director of the company will likely be Koushik Chatterjee, the group chief financial officer who joined Tata Steel in 1995 and played a key role in its mergers and acquisition strategy.

Narendran, a mechanical engineer, joined Tata Steel in 1988 after an MBA degree from Indian Institute of Management, Kolkata, and started his career with the international trading division of the company, looking after steel exports to the Middle East.

He then moved on to marketing and sales and was involved in development work for the cold rolling mill, supply-chain management and sales planning for the company, and at one point, worked with B. Muthuraman, a former managing director.

Chatterjee will be responsible for the Tata Steel Group corporate functions including legal and regulatory affairs, corporate communications, strategic procurement, information systems, group investments, global mining projects and assurance, Tata Steel said in a statement. With effect from 1 November, Karl Koehler, managing director and chief executive officer at Tata Steel Europe, Narendran and Chatterjee will report to chairman Cyrus Mistry.

“The new leadership team will be responsible for defining the overall direction and strategy for Tata Steel across both its emerging and developed markets," the statement said.

Mistry, chairman of Tata Group, in an 11 June letter in its latest annual report, cautioned that Tata Steel is going to face challenging years. “In the face of volatile raw material prices and systemic weakness in demand in key markets, the next 18-24 months will be challenging for Tata Steel," he wrote.

“However, I believe, we will emerge on a stronger footing, through a series of management initiatives targeted at strengthening our core operations including investment in select facilities, product rationalizations and right-sizing of manufacturing assets," Mistry said.

Tata Steel reported a surprise profit in the three months ended 30 June, aided by the launch of new products and reduction in costs. Net profit was at 1,139 crore on sales of 32,805 crore in the quarter.

A senior Tata Group official, requesting anonymity, said Chatterjee would be assuming a “larger role".

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