Tata Chemicals' operating profits for the third quarter ended December 31, 2001, are up by 8 per cent at Rs 123 crore

Announcing the results for the third quarter, Prasad Menon, managing director, Tata Chemicals, said, "This year we continue to focus on sharpening our operational performance and developing plans that sustain long-term growth. These actions have enabled us to post a steady financial performance in an environment that has far-from-easy operating conditions. Our ability to successfully mitigate the problems displays the resilience of our core businesses, and places us in a strong position to capitalise on emerging opportunities in the future."

	Income from operations increased by 3 per cent to Rs 387.94 crore from Rs 376.89 crore
	Operating profits increased by 8 per cent to Rs 123 crore from Rs 113.89 crore
	Normalised* profit before tax at Rs 61.44 crore compared with Rs 56.78 crore
	Reports EPS of Rs 2.55 for the third quarter of the financial year 2002

	Income from operations is at Rs 1,066.27 crore compared with Rs 1,161.51 crore
	Operating profits recorded at Rs 308.84 crore compared with Rs 306.39 crore
	Normalised* profit before tax increases 23 per cent to Rs 132.64 crore from Rs 107.37 crore
	Reports EPS of Rs 5.68 for the nine-month period ended December 31, 2001

(*Normalised: Exclusive of the capital gains of Rs 205.04 crore from sale of investments in the third quarter of previous the year, ie, October-December 2000 by Sabras Investment and Trading Co Ltd, which later merged with Tata Chemicals)

	The financial performance recognises the downward revision of urea pricing norms released by the government, which has impacted profits by Rs 20.24 crore in the third quarter of the financial year 2002.
	The third quarter of the financial year 2002 includes insurance claim of Rs 12.27 crore received on account of loss of profit due to the fire of March 2001.
	The performance for the nine months of the financial year 2002 considers major disruption for a substantial part of the year in the Mithapur plant operations after the fire in March 2001. The plant is now fully functional following successful completion of the restoration work.

Strategic initiatives
During the quarter, the company implemented a series of initiatives aimed at enhancing productivity, rationalising costs and expanding its sales and marketing reach. Covering the marketing, finance and operations functions of the company, these initiatives are directed at enabling the company to adapt to market changes, discover new business opportunities, and create current and future value.

Tata Chemicals expedited the implementation of the Tata Business Excellence Model, which is the cornerstone of its long-term business direction and strategy.

Supplementing these efforts, the human resources division executed performance-management systems that are directed toward enhancing productivity and efficiency.

Cost initiatives
As part of a comprehensive cost-reduction plan, the company has launched 'Manthan', a cost-cutting and process-improvement drive, in consultation with McKinsey and Co. This project aims to lower the company's operating costs and better align resources with the current needs of its soda ash business. Coke and energy consumption was reduced in the Mithapur plant, thus cutting costs and enhancing productivity levels.

The company has also recently implemented SAP and ERP. The derived benefits of closely monitoring the credit lines with SAP have been a reduction in debtor levels and improvement in customer relationship management.

Marketing initiatives
The company realises that the key driver to enhance growth is investment in a solid marketing infrastructure, especially with respect to its edible salt business. To that end, Tata Chemicals has revamped its existing infrastructure to set up 30 distributors nationwide. This has not only led to more effective linkages between markets, but has also widened its distribution and accessibility across the country.

The company has also set up an exclusive marketing team for its salt business, thus capitalising on the emerging opportunities within the sector. Tata Salt continues to be the leading salt brand in the country, and is initiating steps to consolidate and further develop this position.

Buyback initiatives
The board of directors at their meeting today arrived at a decision to pursue the buyback of shares in line with the recently released revised guidelines that make buyback proceedings simple, as it does not require formal shareholder approval.

Under the revised arrangement, the company will buy back its shares at a price not exceeding Rs 60 through open market operations. The maximum outlay towards this buyback is 10 per cent of the company's paid-up share capital and free reserves.