October 2005

Life starts at 60

Tata Incorporated, established in the US in 1945, has spearheaded the Tata group's businesses in the American heartland

Commemorating its 60th year of operation in the United States, Tata Incorporated held a gala dinner in New York on May 24, 2005. Eminent speakers and guests attended, and the sentiment voiced often through the evening was that India was, through the Tata group, putting its best foot forward. Another overriding sentiment was that the group had set high standards in business while upholding its commitment to corporate social responsibility.

The foresight of the legendary Tata pioneers enabled the group to gain access to the US as early as 1945. It set up Tata Incorporated in New York to serve as a representative office for North America and Latin America. The event in May was a celebration of six successful decades of service. Over 300 guests attended the event, including business leaders, customers and stakeholders, in addition to the top management of the group, including Chairman Ratan Tata.

A closer look at the group's international activities reveals that its relationship with the country dates back to 1939, when Tata Steel — or what was then the Tata Iron and Steel Company — set up its New York branch. Gradually, other Tata companies began using this facility for their US-based requirements. After World War II ended, all these activities were brought under the banner of Tata Inc, then a subsidiary of Tata Sons.

Since then it has been critical for the Tatas to be present in the US, today India's largest trading partner. Tata Inc has served as an able arm that offers group companies its specialization in all aspects of global trading, from managing the logistics, information and financial flows to providing risk-mitigation services such as credit insurance, product liability cover and marine insurance. It has also helped them source capital goods.

Says Bharat Wakhlu, president of Tata Inc: "We help companies buy and sell steel, minerals and engineered products. Our major contribution has been in the area of procurement of capital goods, machinery, spares and operating consumables (MRO items) for many Tata companies." With its many years of experience, Tata Inc is able to offer complete import and export solutions between India, Turkey, Eastern Europe, China and the Middle East.

In the case of Tata Steel and its affiliates, Tata Inc exclusively handles all US-related trading activities. In fact, in 1991, Tata Steel took charge of Tata Inc, making the company its fully owned subsidiary. Tata Inc now imports steel products like galvanized coils, cold-rolled coils, galvanized wires and bead wire from the steel giant for the US market. "We serve large steel customers like Pacesetter, Maytag, Ryerson Tull, Central Steel, Steel Warehouse and Lexington Steel, among others. We also serve the galvanized wire and pc strand market for Tata Steel," says Mr Wakhlu.

In the true Tata spirit, the company has not simply been guided by the workflow from its parent company but worked proactively to retain its customers. In order to keep Tata Steel's long-term customers satisfied Tata Inc even sources some of their requirements from other places. This strategy has helped Tata Inc, which has otherwise found it challenging to remain profitable even as Tata Steel evolves its international plan, make a robust profit in the last year. The company currently has revenues worth about $103 million. Also, as these products carry the Tata brand name, they keep the group visible in the American market.

After the initial years of being the lone Tata torchbearer in the US, Tata Inc now has reinforcement from the many Tata companies that have set up shop in the country. "As the world becomes increasingly globalized, every company would like to manage its international operations itself. TCS, VSNL, Tetley and Tata Tea, Taj and Tanishq are some of the Tata companies that either already have their own arms here or are in the process of setting them up. Plus, Tata Sons has set up an ambassadorial office in Washington DC as well," says Mr Wakhlu.

All of this will further the cause that Mr Wakhlu is inspired by — that of strengthening the overarching image for brand Tata.