Tata's Vision '12 aims at doubling returns
Business Standard — March 4, 2008

Tata Steel, the world's sixth largest steelmaker, has set its eyes on doubling the return on investment (RoI) by 2012.

Interacting with the media on the sidelines of Tata Steel's founder's day celebrations, B Muthuraman, managing director, Tata Steel, said, the company would aspire to become the global benchmark in value creation and corporate citizenship.

As part of the value creation initiative, the group comprising Tata Steel and its South East Asian subsidiaries and the UK operations under Corus, would aim to increase the RoI from the current 16 per cent to 32 per cent.

Philippe Varin, chief executive officer (CEO), Corus, said the RoI target was stiff but it would throw up a challenge. "If we do it, it will be a global benchmark," he said.

Corus, as part of its value creation plan, would improve performance, which would translate into an additional value of $600 million. Varin said, "This was the guidance issued by Corus last year and we will do at least $600 million year-on-year."

The Vision 2012 for the Tata Steel group was co-created by the people at its various units at Jamshedpur, South East Asia, the UK and the Netherlands.

Muthuraman said a number of measures would be undertaken by the group for creating value. Among them was faster implementation of brownfield projects.

For instance, the 'H' blast furnace for the Jamshedpur brownfield project (will raise capacity from five to seven million tonnes) was supposed to be commissioned in June, but would now be done in May, translating into additional production of around two lakh tonnes.

Also, there would be some restructuring and re-engineering of Corus plants. Varin said the automotive division of Corus would produce global grade automotive steel.

Around $300 million was being invested at Corus' Ijmuiden in the Netherlands, which would help increase the steelmaker's market share in the automotive business.

At Corus' Scunthorpe plant, which manufactures long products, $260 million was being invested. Varin said, the plant used to make 28-metre rails, and after the said investment would be able to produce 105-metre rails.

The Ijumuiden and Scunthorpe investments were planned prior to the Corus acquisition by Tata Steel and were nearing completion.