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  Tata Chem heads for overhaul of operations

 

Tata Chemicals is heading towards a complete overhaul of its doctrines in the backdrop of the proposed restructuring of its businesses.

The company, which is looking at rationalisation, refocussing and restructuring its business, has sought the help of Tata Strategic Management group — the inhouse consulting firm of the Tatas — to enable it to achieve its goals.

Tata Strategic Management will advise the company on how it can rationalise and refocus its operations, a top company official confirmed. The company will also start looking for growth opportunities in terms of launching new products, cost-cutting and optimisation of the Mithapur production facility.

"The consulting group is monitoring the company closely and the situation is being studied," the official said.

Tata Chemicals, which has a new management team in place, has chalked out plans to make the Mithapur operations in Gujarat leaner and more disciplined in structure. The Mithapur facility manufactures chemical products for the company. Its other unit in Babrala in Uttar Pradesh manufactures urea fertiliser.

According to a company official, "We now have a performance management system for the company as a whole, which will start right from the top levels of management to the last man on the shopfloor. With this, the company hopes to bring in a more collective and participative kind of management.

"The company says it will focus more on customer orientation and operational integration."

Tata Chemicals has already announced plans to hive off its detergents business, and is now taking a relook at its cement and caustic soda businesses as well.

According to the official, "We have strayed into certain areas for historical reasons, but now we need to focus our attention on what we call 'heartland' business."

The official said that the management has identified soda ash, sodium bicarbonate salt and urea as its heartland business. Products which are not on the list of priorities include cement, caustic soda, hydrochloric acid and chlorine. However, the official said that though cement was a good business to get into, it did not get the required focus.

"We are having a second look at caustic soda and cement businesses," the sources said. Tata Chemicals whose cement is currently marketed by ACC might also come under review. "The marketing agreement with ACC continues as of now, but nothing could be said. We can give a second thought to it," he said. However, company officials are tightlipped on what the company's options are for the cement business.

   
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