Alan Rosling, executive director of Tata Sons, member of the Group Corporate Centre and the person responsible for the Group’s drive to
internationalise, looks back at 100 years of the Tata Group’s presence in the UK, and what the future holds

This is the centenary year of Tata Sons’ UK subsidiary, Tata Limited. The Group marked this anniversary by winning the auction to acquire Corus — the erstwhile British Steel — one of Europe’s largest steel makers. Once Corus is integrated, it will once more make the UK the Tata Group’s leading international market.

The deal is the largest-ever Indian acquisition of a foreign firm: it will catapult Tata Steel from its present rank of 56 to the world’s fifth largest steel producer and gives the company immediate ownership of 19 million tonnes capacity in established markets. This will mean that Tata Steel has the lowest cost position in two major continents — Europe and Asia.

Last year, the UK was the second overseas market for the Group after the US. Combined revenues in the UK exceeded $1 billion, 18 Group companies were operating in the country and we employed more than 4,000 people. The UK illustrates many themes of the Group’s
internationalisation: enterprise, boldness, investment, the development of business models that cut across the gravity of geography, the creation of local employment, and a commitment to the community.

If the UK was the Group’s first overseas foray a century ago, it was also the place in which the new phase of our internationalisation kicked off seven years ago with Tata Tea’s pathbreaking acquisition of Tetley. The market leader in the UK and Canada, today Tetley contributes some 66 per cent of the consolidated turnover of the Tata Tea group of companies and the integration of Tetley into Tata Tea has driven the transformation of Tata Tea — as an innovative, consumer-oriented, brand-focused company.

The Group has made two other acquisitions in the UK, both in 2005. Tata Chemicals acquired the Brunner Mond Group to become the third largest producer of soda ash in the world, and Tata Technologies acquired INCAT International which, combined with Tata Technologies’ offshore capabilities, creates a strong and seamless onshore / offshore delivery capability to international customers in the automotive and aerospace industries.

As elsewhere, TCS is in many ways the pioneer of the Group’s presence in the UK. With five offices and a delivery centre in Guildford, the UK is one of TCS’s lead markets. It has also been the forerunner for the development of new businesses for the company, including BPO. Its £500m takeover of Pearl’s Peterborough call and IT support centre makes TCS the first Indian firm to open a back office in Britain. The centre provides telephone and internet support for two million UK customers, who hold four million life insurance and pension policies and employs about 1,000 people. This investment illustrates that the Indian IT industry is not just about outsourcing of work to lower cost countries like India, but in fact is developing a much more complex and efficient delivery model across
differing geographies.

Also a trendsetter in the IT space, Tata Interactive Systems provides custom-built e-learning materials, as well as instructional design, project management and technical consultancy services in the UK and is now among the largest developers of e-learning in the UK.

Another example of breaking stereotypes about Indian business is Tata Motors European Technical Centre. Currently based at Warwick, the centre employs more than 80 highly skilled engineers who work seamlessly with the Engineering Research Centre (ERC) in Pune to develop and refine Tata Motors’ product range.

VSNL entered the UK market in 2004 to tap the enterprise customer base in the country and has gone on to successfully offer wholesale voice operations for European carriers seeking Indian termination services. UK operations account for around one-third of VSNL’s European revenues.

And, of course, the UK has Taj Hotels: the Crowne Plaza London-St James, bought in 1982. The property has 342 rooms, renowned food and beverage services, and architectural gems such as the exquisite terracotta frieze and the beautiful fountain. Adjoining it is 51 Buckingham Gate, which offers 82 luxurious and elegantly furnished apartments.

The Group’s commitment to social responsibility has also long been manifested in the UK. Sir Ratan Tata made a donation that enabled the London School of Economics (LSE) to research the causes of poverty and led to the setting up, in 1912, of LSE’s Sir Ratan Tata department, subsequently called the Department of Social Sciences. The department’s first lecturer was a bright young man named Clement Attlee, who went on to become the British prime minister who gave India its independence and also set up the British National Health Service.

The Lady Tata Memorial Trust was set up in 1932 by Sir Dorab Tata to support research into leukaemia and other blood diseases, in memory of his wife Meherbai who had died in 1931 of the disease. The Trust set up a scientific advisory committee of eminent scientists and physicians to advise them on research applications and the distribution of funds. Tata Limited administers the awards, which have over the years been in the region of £250,000 to £500,000 per annum.

The Group’s companies have continued this remarkable legacy of social commitment. Tetley tea sold in the UK supports the British Heart Foundation by raising funds for this leading national charity fighting heart and circulatory disease. TCS UK has 20 CSR champions and teams running UK education, disability, elderly, youth and IT-related projects using its core competencies. This includes practical involvement and fund raising (TCS matches funds raised by employees).

TCS UK also participates in Prince Charles’ ‘Seeing is Believing’ programme, which encourages senior business people to respond to the issues facing some of the most disadvantaged communities, as well as the ‘Responsible Offshoring’ programme, both with ‘Business in the Community’, an association of 750 companies (including 70 of the FTSE 100 companies), which have made a commitment to practice ethical and compassionate business methods. It is also a member of the UK Percent Club, comprising companies that donate more than 1 per cent of their profits to charity.

As a liberal and open economy, the UK has proved an attractive destination for the Group’s international ambitions. Increasingly, the sustaining of our
competitiveness will require innovation and technology, to build on our natural advantage of lower cost.

But our UK presence is as much one of learning. For example, one of the key attractions of Corus to Tata Steel is its renowned technical skills. Our Group companies will need to source technical and managerial expertise from countries like the UK, and creatively blend it with competencies from India and elsewhere, so as to create a new competitive paradigm that can build truly world beating and global companies.

Uploaded on June 6, 2007