January 2006

2005: A round-up

The past year saw the group move, with increasing speed and agility, into the arena of international business

The year 2005 saw the Tata group make rapid strides in its internationalisation thrust. A number of global deals, acquisitions, mergers and joint ventures took the Tata brand to distant shores and gained for the group new markets, customers and products.

Given below is a summary of achievements of Tata group companies for the year 2005.

New partnerships
205 was the year for new partnerships, group companies extended the Tata footprint to a number of new geographies, acquiring companies all over the world. A summary of alliances forged:

  • Tata Steel made rapid strides in its expansion strategy this year.
    • It signed agreements to buy a 5 per cent interest in the Carborough Downs Coal Project located in Queensland, Australia.
    • The company signed an MoU with Nippon Steel Corporation for technical assistance on the proposed six million tonne per annum steel plant in Kalinganagar, Orissa.
    • BlueScope Steel and Tata Steel announced their plans to form a joint venture company in India, which will manufacture zinc / aluminium metallic coated steel, painted steel and rollformed steel products, and deliver pre-engineered buildings (PEBs) and other building solutions. Plans also include the construction of a new, metallic coating and painting facility at Jamshedpur for the JV.
    • The company signed agreements with Cementhai Holding Company, a 100 per cent subsidiary of the Siam Cement Company, Thailand, to acquire shares and invest additional equity in Millennium Steel Company.
    • Tata Steel will partner Iran Mines and Mineral Industries Development and Renovation Organisation in establishing a 1.5 million tonne per annum (mtpa) steel slab making facility, a 1.5mtpa of steel billet making capacity, a separate 3mtpa export-oriented steel plant and in the exploration and mining of unexplored iron ore mines through a JV in Iran.
  • Tata Motors kept pace with a variety of new associations.
    • The boards of Tata Motors and Tata Finance (TFL) approved the merger of TFL with Tata Motors.
    • The company acquired a 21 per cent stake in Spanish bus manufacturing company Hispano Carrocera S.A with the option of buying over the company completely in the future.
    • Fiat and Tata Motors signed a memorandum of understanding to study possible cooperation in the car sector.
  • Tata Consultancy Services (TCS) made sure it was not left behind.
    • TCS and Scuderia Ferrari closed the deal whereby TCS will provide IT and engineering services for the development of the latter's F1 car.
    • TCS entered into a three-way joint venture with the Chinese government. The company gained a 50 per cent share with Microsoft holding a minor stake.
    • State Bank of India entered into a joint venture with TCS to form a joint venture which will provide advanced technology solutions and world-class domain consulting for the banking and financial services sector. Once incorporated, the venture will be known as C-Edge Technologies and have an authorised capital of Rs40 crore.
    • TCS acquired Australian Financial Network Services, a core banking solutions vendor. The deal will further strengthen TCS's portfolio of banking and financial services products.
    • TCS also acquired Comicron, the market leader in the banking and pensions business process outsourcing business in Chile.
  • Taj Hotels Resorts and Palaces entered into a strategic tie-up with ETA Star Property Developers LLC to develop and manage the Taj Exotica Resort & Spa, at the Palm Island Jumeirah in Dubai. Indian Hotels also bought a Sydney hotel for $36 million. It is the hotel group's first acquisition in Australia.
  • Tata Chemicals became an equal partner in Indo Maroc Phosphore S.A. (IMACID), Morocco, a manufacturer of phosphoric acid. The company, through its subsidiary, also acquired a 63.5 per cent stake in the UK-based Brunner Mond Group UK, a soda ash and sodium bicarbonate manufacturer. The deal will make Tata Chemicals one of the leading producers of soda ash in the world.
  • Tata Technologies acquired a UK-based automotive and aviation design and engineering firm Incat International Plc. The acquisition will give the Tata company access to Incat's client that include Ford, DaimlerChrysler, Honda, Boeing, Airbus and Lockheed.
  • Tata Power signed an MoU with the Damodar Valley Corporation (DVC) for the proposed 1000 MW Right Bank Thermal Power Project being developed by Maithon Power.
  • Tetley US Holdings, a Tata Tea subsidiary, signed a definitive agreement to acquire FMALI Herb Inc and Good Earth Corporation.
  • Trent acquired a 76 per cent strategic interest in Landmark, India's leading books and music retailer, and its subsidiary firms.
  • VSNL also closed the year out well.
    • The company acquired Tyco Global Network, which will make it one of the world's largest providers of submarine cable bandwidth.
    • VSNL  agreed to acquire Teleglobe International Holdings, a leading provider of wholesale voice, data, IP and mobile signaling services.
    • VSNL was awarded a 26 per cent stake in South African telecom operator SNO.
  • Tata AutoComp Systems set into motion the process of acquiring the business and assets Wündsch Weidinger, a German automotive components supplier.

Products and services
The year saw a number of Tata companies launch a slew of offerings focused on guaranteeing customer delight. A listing of the major launches:

  • The year for Tata Motors was full of new launches. Premium variants — Spacio Gold, Safari Dicor and the Indica V2 Turbo and Indigo SX Series were introduced. The company also launched the new Ace, a mini-truck, the Globus and Starbus buses, and the Tata TL 4x4, a sports utility truck. Novus, was launched by Tata Motors in India, the first Daewoo vehicle to be launched here. There was an international launch as well with the Indica being introduced in Turkey.
  • Tata Chemicals introduced Topp Salt to West Asia, becoming the first Indian company to launch the product in the region.
  • Tata Steel launched the country's first retail steel store — steeljunction — in Kolkata.
  • Tata Indicom became the first operator in India to launch the 'Non Stop Mobile Service', offering two years of free incoming calls without the need to recharge. It also launched its prepaid wireless desktop phone — Indicom 10.
  • Tata AIG General Insuranceintroduced the Business Travel Guard, a group insurance cover that gives comprehensive overseas travel coverage for the business traveller.
  • Tata AIG Life launched its flexible accident and health insurance policy, 'Health Protector'. A five-year renewable term policy, with the premium amount remaining constant during the tenure. The company also launched its money-back insurance plan 'Nirbhay Life'.

Hitting the headlines

Tata companies made the news in 2005 for a variety of achievements and initiatives. A round-up of the years headliners:
  • metaljunction services helped save the Tata group Rs52.2 crore or 24 per cent of the cost for procuring personal computers (PCs) via online aggregate buying through its web platform.
  • Nelito Systems won the 'Partner of the Year' award for the Asia Pacific Region from Microsoft under the Independent Software Vendor Category at the Microsoft Worldwide Partner Conference in July 2005.
  • Tata BP Solar got an order of about Rs10 million from the Indian Institute of Astrophysics, Bangalore (part of the Department of Science and Technology, Government of India). The company has also won a contract from Alcatel Contracting GmbH, Germany, to supply solar power systems for the Cordect Telecom network in Bhutan.
  • The Tata group celebrated 60 years of its operations in the US this past year.
  • It was a year packed with activity at Indian Hotels.
    • Taj Hotels Resorts and Palaces announced plans to develop a new Taj business hotel in Coimbatore, and entered into a long-term license agreement with the owners of Hotel Surya International, Coimbatore.
    • The Taj Hotels Resorts and Palaces entered into a 30-year management contract agreement to operate and manage the Pierre, a hotel on New York's Fifth Avenue.
  • Tata Chemicals was recognised in a variety of forums last year.
    • It received the 'Council for Fair Business Practices' Jamnalal Bajaj Award under the best manufacturing enterprise (large) category.
    • The company's chemicals division, Mithapur, received the IMC Ramkrishna Bajaj National Quality Award at the eighth IMC RBNQ Awards and IMC Juran Quality medal function.
    • Tata Salt was a recipient in the first FMCG Consumer Reaction Awards.
    • The company won the Green Governance Award 2005 for its project — Conservation of the Whale Shark.
    • Tata Chemicals also bagged 12 awards at the recently held 45th Association of Business Communicators of India annual awards ceremony in Mumbai.
  • The year for Tata Consultancy Services  (TCS) was busy as well:
    • The company won a Rs341 crore order from the ministry of company affairs to improve its registration services.
    • TCS made a foray into the drug discovery area with its bio-suite product, a software package for life sciences and biotechnology.
    • TCS announced that it would implement its centralised core banking solution for the 1,000+ branches of Central Bank of India.
    • ABN Amro signed on TCS, with Infosys and Patni Computers and US groups IBM and Accenture, for a 5-year deal to manage and develop its systems.
    • TCS also bagged a multi-million dollar contract from the Moscow-based National Depository Centre for its securities product, eClearSettle.
    • TCS signed an $847 million insurance administration processing deal with UK-based insurer Pearl Group. It is the single largest BPO contract awarded to an Indian vendor overseas.
    • TCS bagged a clinical trial data management contract from Danish pharmaceutical major Novo Nordisk.
  • Tata Motors crossed the 1 million sales mark (including exports) for its passenger cars. Tata Sierra the first Tata passenger car was rolled out in 1991.
  • Tata Mutual Fund made new this year with:
    • The Tata Infrastructure Fund garnering more than Rs700 crore in its initial public offering, and receiving more than 100,000 applications.
    • The company became one of the fastest growing mutual funds in the last three years with its assets under management growing from Rs1,027 crore (March 31, 2003) to Rs10,000 crore (August 31, 2005), a growth of 873 per cent.
  •  Tata Power's Jojobera division was presented the Golden Peacock Award for Environment Excellence for the year 2005 at the World Congress on Environment Management.
  • Tata Steel signed an MoU to set up a five million tonnes per annum greenfield integrated steel plant in the Bastar region of Chhattisgarh. The project will include the development of captive iron ore mines to meet the plant's requirements.
  • Tata Teleservices notched up 6 million subscribers.
  • Tata Indicom Walky received the 'Best Service in Emerging Markets Award' at the World Communication Awards.
  • Titan Industries' "What's your Style" campaign won the gold at the Effie Awards 2005 in the Consumer Durables category.
  • The Sir Dorabji Tata Trust and the Sir Ratan Tata Trust received the 'Corporate Citizen of the Year Award' at the Economic Times Awards for Corporate Excellence, 2005.
  • The Delhi high court restrained a Chinese online gambling entity from using the name 'Tata'; the domain name 'tatainfotecheducation.com' was transferred to Tata Sons from the defendant Fashion Id Limited. The Tatas also won a legal battle in Pakistan against a Peshawar-based company that sought to register 'Tatara Tea' as the brand name for its tea products.

Newsmakers in 2005

  • Ratan Tata, Chairman, Tata group, was named Asia's businessman of the year by Forbes magazine. He was also conferred an honorary doctorate by the University of Warwick in July.
  • The Indore Management Association awarded Simone Tata the Lifetime Achievement Award in recognition of her significant contribution in the field of management.
  • Tata Consultancy Services CEO and MD S Ramadorai was awarded the 'UK Trade and Investment Special Recognition Award'. The award is recognition of TCS's outstanding contribution to the UK's knowledge economy.
  • After almost a decade, Tata Motors got itself a managing director in July. Ravi Kant, previously in charge of the commercial vehicle business unit, will take control of the day-to-day affairs of the company.
  • Madhukar Dev was appointed the managing director of Tata Elxsi for a period of three years from January 16, 2005.
  • Tata Teleservices appointed Darryl Green as its chief executive officer.
  • Trevor Bull took over as MD of Tata AIG Life Insurance.