100th Annual Report 2006-2007 - Tata Steel

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Management Discussion and Analysis The domestic sale of long products increased by 27% to 1.3 million tonnes during the year. The sale of Tata Tiscon rebars increased by 25% to 0.97 million tonnes. The concept of “Selling by Piece” of Tata Tiscon rebars was implemented all over India – first of its kind initiative by a steel company in India. Sale of branded products increased by 13% to 0.99 million tonnes. The turnover of branded products increased by 19% to Rs. 4,604 crores. A series of initiatives were undertaken towards achieving better customer service and market focus. The Theory of Constraint (TOC) for vendor managed inventory was initiated for 3 models at Tata Motors with zero stock outs. The Company also received the Global Supplier Approval from Honda Engg. Services (Honda Car, Japan) for supplying cold rolled cold annealed products. H) Other Business Units a) Ferro Alloys and Minerals Division (FAMD) FAMD produces two types of chrome ore, namely lumpy ore and friable ore, from its mines located in Orissa. Chrome concentrate, a beneficiated product is produced in the chrome ore beneficiation plant at Sukinda, Chrome ore is used in the ferro alloy plant at Bamnipal and other conversion plants to produce high carbon ferro chrome. The division also produces manganese ore from the manganese mines in Joda, which is used in making ferro manganese at the ferro alloys plant at Joda, and silico manganese at other conversion agents. Industry Overview: The stainless steel output grew by 16.7% to 28.4 million tonnes in 2006. Asia Pacific, predominantly China, was the major growth engine with a production of 5.3 million tonnes in 2006 as compared to 3.2 million tonnes in the previous year. . The increase in global stainless steel production resulted in increase in global ferro-chrome consumption by 12.2% at 6.6 million tonnes in 2006. Asia continues to account for more than half of the total global production and consumption of ferrochrome. Asian ferro-chrome consumption increased by 16% to 3.6 million tonnes as compared to 3.1 million tonnes in the previous year. Global manganese alloys business also registered a significant growth in line with the growth in carbon steel, again led by China. Manganese alloys production reached an all time high of about 12 million tonnes as compared to 10.5 million tonnes in the previous year. The Global production of high carbon silico-manganese reached 6.9 million tonnes in 2006. Operational Performance: The Operations of FAMD registered a strong performance during the year under review in respect of mineral and ferro alloys production. Gross excavation of Sukinda chromite mines increased by 3.8% to 13.65 million tonnes as compared to 13.15 million tonnes in the previous year. Concentrate production increased by 4% to 465,000 tonnes. Ferro alloys plant at Joda achieved its best ever production of 51,020 tonnes during the year. The year also witnessed the highest-ever alloys production through conversion at 159,000 tonnes. Enhancing Operational Efficiency Specific Refractories Consumption Kg/tcs 10 Tcs/man/year 400 Labour Productivity 9 8 350 326 363 7 6 6.33 5.59 300 5 250 4 3 200 2 150 1 0 100 100 FY 2005-06 FY 2006-07 FY 2005-06 FY 2006-07
Sales of manganese ore in the domestic market increased by 17% to 365,000 tonnes. Total manganese alloys sales increased by about 50% to 54,000 tonnes. Exports of chrome concentrate increased by 10% to 500,000 tonnes. b) Tubes Division Overview: Tubes division produces three categories of tubes namely Commercial Tubes used in Plumbing, Irrigation and Process Industry, Precision Tubes which cater to the Boiler and Automotive sectors, and Structural Tubes supplied to the Infrastructure sector. Operational Performance: The Tubes division witnessed increase in production by 17.5% to 309,932 tonnes. Tube sales increased by 17.6% to 302,905 tonnes. Structural Tube and Precision Tube sales increased by 65% and 21% to 58,334 tonnes and 58,839 tonnes respectively. A series of marketing initiatives were undertaken for achieving better customer service and market focus. These include: • Launch of “Structura Directions” – An initiative driven to build on relationships with key opinion leaders like architects / consultants by providing a platform for sharing knowledge on best practices. • Vendor managed inventory and Customer Service Team initiatives made progress with Precision Tube customers. • The Retail Value Management journey was completed for the entire country, which has enabled optimal restructuring of the retail network leading to enhanced reach. With Theory of Constraints (TOC) initiatives in the area of supply chain and distribution, the division achieved superior level of compliance, customer satisfaction and lower inventories. The first phase of modernisation has been completed with the commissioning of a new 3” Commercial Tube Mill, a 4” Precision Tube Mill and a state-of-the-art Cold Drawn facility. With this, the in-house production capacity has increased from 230,000 tonnes to 325,000 tonnes. c) Bearings Division The domestic bearings industry has been growing at around 7% per annum in the last few years. Current Installed capacity of bearings in India is 320 million nos. India imports around 120 million nos. mainly from Eastern Europe and China. Tata Steel’s Bearings Division achieved a capacity utilisation of 120% and increased its production by 7.2% to 30 million nos. Sales increased by 5.8% at 28.97 million nos. as compared to 27.38 million nos. in the previous year. There was pressure on prices of bearing products due to excess supply in the market during the year. Cost of raw materials increased by around 8% over the previous year, but the negative impact was mitigated largely through increased capacity utilisation and improved manpower productivity. 101
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A Century of Trust 100th Annual Rep
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Tata Steel is Asia’s first and In
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Redefining steel with world-class p
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in a manner that ring-fences the Co
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Board of Directors Mr. R. N. Tata C
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The state-of-the-art Hot Strip Mill
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Distribution of Revenue 2006 - 2007
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1907-2007 JRD Tata with Pandit Jawa
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1907-2007 Tata Steel’s state-of-t
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This photograph taken by a Tata Ste
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Profit Sharing Bonus was granted fo
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A modern swimming pool at the G Tow
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steeljunction in Kolkata - India’
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Tata Steel has introduced high-end
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Tata Structura is a new-age constru
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Shareholder interaction at an Annua
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Within three weeks of the announcem
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It was 1956. The company was faced
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Community and environment : Improvi
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A Critical Care Unit, in the 850-be
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The Tata Steel Family Initiatives F
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The Tata Steel works, mines, collie
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An aerial view of the planned indus
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The Cold Rolling Complex at Jamshed
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1933 Two new roughing and finishing
Page 51 and 52: From the early days, the Tata Steel
Page 53 and 54: Production Highlights • The best
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Page 67 and 68: Review of Corporate Sustainability
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Page 89 and 90: Particulars of technology imported
Page 91 and 92: Management Discussion and Analysis
Page 93 and 94: of 8%. In 2006, China produced 422.
Page 95 and 96: The Company plans to achieve these
Page 97 and 98: I. Strategic Rationale for acquisit
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Page 115 and 116: Highlights 2006-07 2005-06 Rupees R
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SCHEDULE M : NOTES ON BALANCE SHEET
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Balance Sheet Abstract and Company'
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CAPITAL ACCOUNTS Financial Statisti
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Financial Ratios 2006-07 2005-06 20
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Name Category No. of Whether No. of
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the Tata Code of Conduct, which req
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Shareholding of the Directors in th
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Committees In addition to the above
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employees to report concerns about
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Market Information Market Price Dat
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Distribution of Shareholding Number
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Address for Correspondence : Tata S
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Certificate To the Members of TATA
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Statement pursuant to Section 212(8
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4. Subject to the matters referred
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Consolidated Profit and Loss Accoun
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Consolidated Cash Flow Statement fo
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Schedule forming part of the Consol
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Schedules forming part of the Conso
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SCHEDULE N : NOTES TO THE CONSOLIDA
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The Dimna reservoir near Jamshedpur
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100th Annual Report 2006-2007 - Tata Steel

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