Tata Chem to revamp salt distribution
structure
Business Standard — December
27, 2001
Tata Chemicals, the fertiliser and chemicals major, has revamped
the distribution set-up for its salt business, in which it
is India's largest player.
The restructuring was done on the basis of recommendations
by management consultants Business Consulting Group, and is
expected to result in costs savings of up to Rs 5 crore annually.
Kapil Mehan, vice-president - sales and marketing, Tata Chemicals,
told Business Standard: "We will be dis-intermediating
our distribution levels by one layer. The basic idea is to
make the distribution network more efficient and to function
on the lines of a fast-moving consumer goods business."
Tata Chemicals manufactures the brand 'Tata Salt', which
is a market leader with 37 per cent share.
Sales of the brand have been growing at about 10 per cent
per annum over the last few years, but emerging competition
made the company to have a relook at its distribution setup.
"The new set up will address all areas of control issues
as well as providing a platform for future expansion,"
Mehan added.
The Business Consulting Group will be involved in the implementation
of most of the measures suggested and which would be in place
over the next six months.
Tata Chemicals earlier sold its product through a single
agency, which in turn sold it to a set of 33 distributors
acting as clearing and forwarding (C&F) agents and as
'super distributors'. The distributors in turn sold the product
to over 2,500 stockists, who then sold it to 7 lakh retailers
across the country.
The chemicals major will now have one layer less in the chain,
with the company now directly dealing with distributors. All
C&F functions and distribution functions have been separated
and will be dealt by distinct entities.
The company is also in the process of identifying suitable
distributors in locations where it is not represented, or
where distributors failed to perform their desired role.
Tata Chemicals has also put in place a new sales setup with
a responsibility to ensure high visibility as well as to expand
and develop markets with the aim of increasing sales to a
higher level.
It will also be IT-enabling its distribution network with
the pilot scheduled to go onstream soon and would involve
all C&F and distributors by the year-end.
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