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Turning around Tata Chemicals
Business Standard —
January 2, 2006
Not many would have envied Prasad Menon when he took over
as the managing director of Tata Chemicals in 2000. Once a
star in the Tata Group, Tata Chemicals was more than feeling
the heat of the competition and of the "climate change"
in the industry. And Menon's mandate was to turn the company
around. Five years later though, Menon is a rising star in
the Tata galaxy. From Rs 164 crore in 2000-01, Tata Chemicals'
net profit has more than doubled to Rs 340 crore in 2004-05.
And statistics for the company are only getting better with
an almost 50 per cent increase in net profits in the second
quarter of the present financial year. And to show it is a
global player, Tata Chemicals has also moved aggressively
in the global arena. First to come in its kitty was Indo Maroc
Phosphore of Morocco for Rs 166 crore in March. This was followed
by the acquisition of the UK-based Brunner Mond for Rs 508
crore in December — the group's third largest buy-out
of the year.
Even Santa Claus couldn't have got the Tatas a better gift,
especially after the bitter experience in the takeover bid
for a Egyptian company that proved fruitless. And it was a
relieved Menon who later said at the announcement, "It
is a company that has gone through very, very difficult times...
We believe it is a very good buy." Industry insiders
say the 57-year-old low-profile chemical engineer from IIT,
Kharagpur showed the same discipline and perseverance throughout
his more than three-decade long career in the Indian chemicals
industry.
Menon is not an old Tata hand and joined the group only five
years back from the Nagarjuna group where he was technical
director and agri-business sector chief. One of his crowning
glories was to construct, commission and stabilise the urea
fertiliser project of Nagarjuna Fertilizers and Chemicals
at Kakinada. He has also worked in ICI for 20 years as a plant
manager and as the works operations manager. Under Menon,
Tata Chemicals has smoothly progressed from a company that
was sheltered by government policies to one that is market-driven,
customer-centric and focussed on cost control.
Its Mithapur
plant is considered to be one of the most cost-effective globally.
Moreover, the company sold off its cement and detergent businesses
and its flagship brand Tata
Salt has successfully warded off the challenge from competitors.
Tata Chemicals also launched novel marketing campaigns, including
the Tata
Kisan Sansar.
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