The UK holds great potential for the Tata Group, says Syed Anwar Hasan, managing director, Tata Limited, as he dwells on the past and the future of the company

The Tata association with the UK started when Tata Limited was set up in London in 1907, to represent the Tata Group in Europe. Today, the Group has 18 companies and 4,000 employees in the UK, and Tata Limited has evolved much beyond its traditional liaison role, with a fully computerised system for worldwide sourcing of equipment, spares, raw materials and services, as well as for marketing of products and services in the UK and Europe.

Apart from commodity trading in metals and soft commodities, Tata Limited specialises in the movement of goods from anywhere in the world to the Indian subcontinent, offers insurance and raises finance for trading operations and investments. Its consulting practice includes identification of potential partners for collaborative ventures, as well as providing advice and assistance to Indian companies seeking overseas opportunities for their products.

The man in charge is managing director Syed Anwar Hasan, a graduate from the Nizam College of Osmania University in Hyderabad who joined Tata Steel in 1963 in Kolkata. After holding several executive positions in Tata Steel, Hasan was appointed as executive vice president of the bulk material handling and processing equipment manufacturer, TRF Ltd, in 1987. He went on to head the company as managing director from 1989 to 1999, prior to his appointment as MD of Tata Limited in London.

Speaking with Christabelle Noronha and Sujata Agrawal, Hasan talked not about the past, but about how this hundred-year-old company is looking at the future. Excerpts from an interview:

What is the nature of your responsibilities at Tata Limited?
There are two aspects. The first is the business end; doing the overseas procurement of goods and services for the Group and, in conjunction with TM International Logistics (TMILL), offering an end-to-end service including insurance, port clearance, etc. The second, which has grown over the years, is representing the Group, being an active member of the main business associations, and liaising with key policy makers and opinion moulders in the UK. Other activities include channelling business opportunities to Group companies, helping them to establish themselves in the UK, ensuring that they achieve synergies, and overseeing corporate social responsibility (CSR) activities in the UK. Besides, Tata Limited has played a useful role in the recent spate of M&As — Tetley, INCAT, Brunner Mond and Corus.

Do you focus on any specific Tata companies?
Not generally, but from time to time, specific issues come up that need me to concentrate on a particular company. This might involve interfacing with
Westminster and Whitehall to get government approvals, or applying for grant aid that newly established companies are entitled to. I usually take a
lead in matters that involve Group companies operating in the UK, such as brand building, collective CSR, TBEM, etc.

Which are the industries offering the best investment opportunities for the Group?
As you know, the British economy has continuously grown over the last several years. This has created huge opportunities for Group companies. The ones that have been able to take advantage of this are companies
like TCS, VSNL, Tata Interactive Systems and Tata Elxsi, each in their own spheres of activity. Over the last few years particularly, all these companies have strongly consolidated their positions. The UK companies we took over, like Brunner Mond and Tetley, have also shown commendable growth, particularly with the synergies they have been able to generate with their parent companies in India, Tata Chemicals and Tata Tea.

Political relations between India and the UK have been improving steadily over the past few years. Will this give a boost to business in general, and to the Tata Group in particular?
Good political relations between countries foster good business relations. But what really matters is the economic policies that the governments enunciate. One of the great things about doing business in the UK is the
total lack of political interference in business. There are hardly any instances where the government has moved to prevent an acquisition from taking place. Examples include BAA, Corus, PowerGen and O2.

The other great thing is the excellent labour laws, which allow entrepreneurs more flexibility in how they conduct their business. Companies usually don’t have too much of a problem in restructuring and downsizing when business compulsions require it. Besides, the infrastructure is so streamlined that you have everything it takes to get a business up and running in no time at all. The familiarity with the language is a strong plus point for Indian companies. All this has led to a situation where, for the very first time, FDI from India into the UK is far in excess of direct investment into India.

What’s your view of the potential that the UK, as a country and as a market, holds for a group such as the Tatas?
The UK holds great potential for the Tata Group. The country has seen steady economic expansion over the past 14 years, its unemployment figures are the second lowest in the European Union and inflation is modest. Although the UK does little manufacturing, its workforce is more adaptable than France’s or Germany’s. One of the few downsides is that the education system has been in a permanent state of upheaval, leading to skills shortages and lower productivity in some areas.

Indian companies looking to start operations in Europe perceive the UK as the foremost investment location and an excellent platform to enter other European markets. Around 40 per cent of all Indian FDI is directed towards Europe, and the UK bags 60 per cent of Indian FDI in Europe. Besides, UK
companies realise the benefits of IT outsourcing to India, and Indian professionals help fill skills shortages in the UK.

China has a strong trade and business relationship with America, which dwarfs India. What’s the situation like in the UK?
India-UK goods exports and imports are fairly evenly matched, with UK imports from India at £2.78 billion and exports at £2.80 billion, in 2005. They buy textiles and readymade garments, jewellery, footwear, metal
manufactures, power generating equipment, organic chemicals and vegetables and fruit from India, and sell us non-metallic minerals, gold, power generating and telecom equipment, transport equipment and
industrial machinery. The £2 billion services trade is slightly in favour of India. In contrast, the UK has a huge trade deficit with China. In 2005, UK goods imports from China were a staggering £12.96 billion, while exports were just £2.81 billion.

Uploaded on June 6, 2007