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Tata Chem ends marketing deals with
ACC, Vardhaman
The Economic Times — December
6, 2001
Tata Chemicals has revamped the distribution and marketing
structure of its salt and cement businesses. The company has
terminated its long-standing cement marketing argument with
cement major ACC from November 30. It has also replaced Vardhaman
Chemicals, its sole distributor of branded salt, by setting
up its own nationwide network.
The move could signify that ACC is no longer in the running
to acquire Tata Chemicals' cement unit by roping in a strategic
partner. Tata Chemicals' cement product has been marketed
under the Tata Chemicals-ACC brand name despite the Tatas
selling their entire stake in ACC to Gujarat Ambuja two years
ago.
While the company has put in place 33 distributors for the
salt business to gain direct control over operations, it has
created a team to market cement, mainly in the Saurashtra
region in Gujarat. Sources said that the move to reorganise
the salt distribution network was aimed at repositioning the
business. After scrapping the long-standing arrangement with
Vardhaman recently, the company is now gearing up to link
up distributors and stockists using SAP, an enterprise resource
planning (ERP) system. For starters, it is implementing the
SAP network in New Delhi which will be extended to locations
across the country by March ’02. Tata group company Tata
Consultancy Services (TCS) is implementing the ERP network.
The strategy is to deliver the products in a day’s time,
which was not possible under the earlier arrangement.
The company is planning to add another 10 distributors shortly.
It has around 2,200 stockists all over the country. Tata Chemicals
had conducted an internal study in early ’00, which recommended
a few measures to restructure the salt business. As a result
of this, the company had set up an independent marketing team
for the salt business. And the current exercise is also a
fall-out of the recommendations.
The repositioning of the salt business comes after the company
lost considerable market share to Hindustan Lever (HLL). Tata
Chemicals, which introduced the branded salt (iodised vapour
salt) in the Indian market under the Tata Salt brand name
in ’83, enjoyed a virtual monopoly position till the
early ’90s. Since its introduction, Vardhaman Chemicals
had been marketing the Tata Salt brand. While Tata Salt has
a market share of 37 per cent, Annapurna and Captain Cook
have a combined market share of 44 per cent, according to
industry estimates.
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