Candida Moraes

A new business model that looks at innovation and knowledge development as key contributors for growth is reaping benefits at Tata Refractories

Innovation is the key to competitiveness. This firm belief at the 49-year-old Tata Refractories (TRL) has not only placed it in a leadership position in the domestic market, but has also made it an aggressive global contender.

TRL began operations in Belpahar, Orissa in 1958 to meet Tata Steel’s requirements of refractories. The company started with silica, high alumina and basic refractories, subsequently expanded its product range and added a dolomite plant in 1995 to provide customers with a globally competitive range of solutions.

Today, it is one of the very few companies worldwide with the capability to produce such a comprehensive range of refractories. (Refractories find application in industries such as iron and steel, cement, copper, glass, aluminium, foundries, petrochemical complexes, fertiliser plants, etc). TRL’s two service offerings — refractories solutions and refractories management services are aimed at customers in India and overseas.

Knowledge innovation
Over the years, TRL has grown through changes — not just of products and processes, but also the business model itself. “I believe that a business model innovation can yield much richer dividends than product and process innovations,” says managing director CD Kamath.

The company’s innovation programme is inspired by two concepts namely, there is always a better way and secondly production of knowledge is our priority. These two mantras have been internalised by all employees in order to achieve superior performance continuously. An intranet knowledge management site which captures, validates and stores knowledge, and also makes it available to users on demand, assists them in the process. “Knowledge sharing is also done by directly sharing experiences in departmental meetings, divisional councils and in share-your-knowledge forums,” says Kamath.

Product innovation
KN Das, a business development manager at Tata Refractories is one of the executives responsible for product profile innovation. He is credited with creating nine new products for the company. Das and his team recently won an award at the Tata Innovation Day for formulating a groundbreaking material used for lining the inside walls of containers holding molten steel. It has the property of enhancing the life span of such containers by six times.

The material was developed at a cost of Rs3.3 lakh but has the potential to generate savings of up to Rs35 lakh every month at a mid-sized steel plant. It’s not surprising then that customers started placing orders long before the material went into production!

Business innovation
The company’s global growth strategy is best exemplified by its recent foray into China. “Our China project is also one of our best examples of innovation,” says Kamath proudly.

The Tata Group’s first ever greenfield manufacturing facility in China — a 30,000 tonne per annum (tpa) plant in Yingkou City for the production of mag carbon family of products — was inaugurated in December 2006. The primary drivers for this investment were the availability of magnesite in China and the need to manufacture and supply cost-effective mag-C bricks to customers.

The project has provided the company with tremendous insights. There are lessons to be learnt too. The project was executed in record time: it took only eight months compared to possibly twenty in India.

The China base is a part of a Rs282-crore growth and modernisation plan. Kamath elaborates, “We have adopted the mantra ‘Grow or Go’ and therefore TRL pursues a strategy of aggressive and profitable growth.”
With change and innovation driving the company, it makes strategic sense for Tata Refractories to be looking at the global marketplace for its new growth muse.

Uploaded in December 2007