Madhavi Irani

Tata International aims to become a globally successful, billion-dollar company by 2003-04. Sudhir Deoras, managing director, reveals the strategy for achieving this goal

From being an India-centric trading house that thrived on the maxim 'have product-will export', to a company committed to pursuing globally integrated operations, Tata International has come a long way. Tata Exports, as the company was called until three years ago, focused on exporting anything that gave it volumes in overseas markets,from automobiles, marine products and pharmaceuticals to castor oil, rice and jewellery.

Over time, as the export volumes flagged, the overseas offices entered local businesses to boost their flagging bottomline. ''There was no longer a common shared vision between TIL and its vast network of overseas subsidiaries,'' explains the company’s managing director, Sudhir Deoras.

And then, the bubble burst. The economy opened up and government incentives by way of tax benefits, special licenses, etc. ended. ''The business model which was apt for the earlier business environment, did not hold good and had to be changed fast,'' admits Mr. Deoras.

The first concrete step was to clearly define and streamline the eight strategic business units (SBUs) that will best showcase and leverage the inherent strengths of Tata Group products and services. These eight SBUs are leather, steel, minerals, power projects, engineering (which includes automobiles, automotive components, engineering goods and chemicals), textile garments, bulk commodities and the information technology sector. Simultaneously, as part of this restructuring exercise, the company has exited no-longer profitable businesses such as healthcare, marine products, castor and rice, and non-focussed engineering goods. Along with the restructuring of business, rightsizing was also done by way of VRS.

Spurred by the need to play a more vital role in marketing products in overseas markets, Tata International underwent a complete metamorphosis. The need was to create a new paradigm that allows knowledge, capital, expertise, products and processes to flow seamlessly between different businesses. An International Synergy Meet was held in Mumbai from December 11 to 13, to formalize the new international face of the group.

The meet was attended by more than 50 senior and middle management executives from the company’s operations here and abroad, and senior directors from other Tata Group companies. The intention: ''Providing a platform for interaction between the overseas entities and the SBUs to develop and evolve an aligned corporate strategy and to share a common vision.''

The synergy meet also unveiled an internal reorganization that will ensure that all 20 of its overseas offices in countries as diverse as South Africa, Bangladesh ,UAE, China, Thailand and the USA, will function in harmony. As per the new blueprint, each SBU would be headed by a separate chief. The industry experts posted in various countries would be functionally responsible to the SBU chief, but administratively report to the country head. The country head will provide support in the area of country-specific trading, business development and support service staff handling issues, such as risk management, legal, logistics, documentation, financing and relationship management, to all the businesses.

In effect, says Mr. Deoras, this restructuring will help lay the foundation for a more focussed strategy and clearly defined goals within each SBU. The local country head, for instance, he says, will no longer formulate the company’s policy vis-à-vis steel. He will defer to the decisions taken by the SBU head in charge of the business. This new strategy will allow Tata International to procure steel, for example, from anywhere and sell it anywhere. This larger playing field, Mr. Deoras reasons, will bring companies other than group companies into the fold.

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