Tata Chemicals celebrates 75 years of glorious presence
Rings the Opening Bell at BSE celebrating its 75th year of Serving Society through Science
Mumbai: Tata Chemicals (TCL), a company with interest in providing solutions that focus on LIFE: Living, Industry and Farm Essentials, today achieved a historical milestone by entering the 75th year of business. Founded in 1939 at Mithapur, Gujarat, TCL today has become a global company with presence across four continents with sustainability and innovation at the core of its businesses. Commemorating this historic moment, the company, along with its former and present management team, senior executives and other employees, rang the Opening Bell at the Bombay Stock Exchange (BSE).
On this occasion, former company managing directors Mr Vadgama, Mr Prasad Menon and Mr Homi Khusrokhan, were present along with R Mukundan, managing director and PK Ghose, executive director and chief financial officer and Ashish Chauhan, managing director, BSE.
Congratulating TCL on this milestone Mr Cyrus Mistry, Chairman, Tata group said, “Tata Chemicals has come a long way over the past 75 years. Besides growing the Mithapur facility into a centre for the making of soda ash and salt, contributing handsomely to India's chemical industry, the company has also played a part in improving the country’s nutritional well-being through iodised and fortified salts, unpolished dals and safe drinking water. The company has also, through its farm essentials, helped realise the objectives of the Green Revolution that has transformed Indian agriculture.
In spreading its wings to secure a global presence, and carving a niche for itself in promising new industry segments, Tata Chemicals has matured into a stellar example of all that is representative of the Tata ethos of business: the pioneering spirit, ethical entrepreneurship, innovation and a selfless allegiance to social causes.”
R Mukundan, managing director, TCL said, “With extreme pride and honour we celebrate our Platinum Jubilee today. Ringing the Opening Bell at the Bombay Stock Exchange reflects the significance of this momentous occasion. We would like to take this opportunity to thank all our employees, partners and stakeholders who have contributed to the company’s achievements over the years and we are confident that they will continue to be part of our future growth.”
“Having achieved the leadership position in inorganic chemicals, i.e., soda ash, the company will now focus on building upon farm and consumer facing businesses. Under farm business, we will increase the non-bulk portfolio like specialty and high yield seeds so as to enhance farm productivity. The focus with regards to the latter will be on growing the consumer products business, as the Indian consumer moves from loose to branded packaged products across all categories in the nutrition and wellness space” added Mr Mukundan.
Commenting on the company’s growth plans PK Ghose, executive director and chief financial officer, TCL stated, “Over the past decade, series of expansions, identifying new areas of growth and strategic acquisitions have helped us multiply our revenues over five times. We have also transformed ourselves from a commodities and inorganic chemicals manufacturer to a provider of holistic solutions to the Indian consumer. Today we have a gamut of products, through which we focus on nursing commodity chemicals, fertilisers, and health offerings. Additionally, we also actively drive strong growth in consumer and agro-focused branded and specialty businesses.”
Mr Ghose further mentioned that “Moving forward, the growth drivers will be in the Indian retail and the farm sector. We are building significant capabilities by leveraging our consumer and farmers reach besides focusing on innovation led products. Tata Chemicals has planned capital expenditure outlay for the next five years that include investments in our chemical business, in capital-light businesses like salt expansion projects and other branded consumer products. Additionally, we may explore the possibility of a brownfield expansion project in USA subject to meeting the desired investment criteria. On the other hand, our focus will be on deleveraging and cutting down debt by half from the current levels.”
Interestingly, the journey of TCL is about harnessing the fruits of science for goals that go beyond business. It all began in Mithapur, Gujarat in western India with the creation of a plant that would raise the wealth of marine chemicals from the ocean, with the potential to touch human lives in many ways.
Short History
In chemistry, when two chemical substances meet and result in a reaction, both are transformed. In the chemical industry, if the spirit of an iconic company meets pioneering vision and strategy, as a reaction many lives are transformed. In other words, that is the 75-year long story of India’s iconic chemical, fertiliser and consumer products giant – Tata Chemicals.
The world’s second largest and most spread soda ash company, with manufacturing facilities across four continents has a story of humble beginnings in the town of Mithapur on the Gujarat coast. History has it that in a move dubbed as ‘being in the wrong place at the wrong time’, an undaunted JRD Tata took over Kapil Ram Vakil’s Okhamandal Salt Works and inaugurated TCL on 23 January 1939. While TCL’s birthplace gave India the first centre of salt and soda ash production, Gujarat too was immediately located on the map of natural resource.
Fuelling India’s chemical growth, this company went on to script an evolution, as a potent amalgamation of ingenuity and entrepreneurship. Beginning charity at home, TCL transformed the drought-prone Mithapur and its other plants of Babrala and Haldia which were bereft of even the elementary amenities of civic life to a vibrant ecosystem with the TCL’s strategic business interventions. In the process, these plants built the pillars of strength for this chemical industry mammoth. Mithapur also helped TCL’s foray to bring the country its first packaged, iodised salt went on to create ‘desh ka namak’. The idea stemmed out of the seawater processing in the company’s Mithapur plant, which was undertaken to tackle perennially water shortage in the region. Salt, of high quality and purity, was a by-product while the UNICEF and the Indian government, were promoting the intake of iodine for health reasons. This resulted into the breakthrough of providing nutrition through salt in 1983, which makes the most economical and convenient dietary vehicle for iodine consumption. The country’s first branded iodised salt by TCL soon became the equivalent to pure salt in India. As Tata Salt went on to be the country’s top food and consumer brand, the Mithapur plant became the first industrial township to be awarded the ISO 14001 certificate. It subsequently launched its low-sodium version enriched with potassium, Tata Salt Lite, and an iron-fortified version branded Tata Salt Plus to address the problem of endemic anaemia in the country.
While company’s business focus remains on living, industry and farm essentials, the growth story of the chemicals segment of the company began with the merger of Hindustan Lever Chemicals (HLCL) in June 2004, with a swap ratio of 2.5:1. It enabled the company to expand its basket of fertiliser products beyond urea, by including complex fertilisers. It also brought into Paras, a very powerful brand. Importantly, it helped the company to grow its revenues by 60 percent. TCL’s first international venture came in 2005 by taking 33 percent stake in a joint venture in Morocco, which met its entire requirement of phosphate. The same year, it made another crucial acquired Brunner Mond for Rs798 crore. This move helped it catapult itself from the 14th to the third largest producer of soda ash in the world. In 2007-08, the company continued spreading its wings, acquiring US-based General Chemical Industrial Product, Inc. (GCIP). GCIP had significant natural soda ash reserves in Wyoming, which gave TCL the access to cheap resources and was a natural hedge against commodity cycles. In 2007, it also launched a 50:50 joint venture with Total Produce, the world’s third largest fruits and vegetable distribution company called Khet-Se Agriproduce. It was formed with the objective of bridging the gap between the producer and the end consumer in the fresh produce business by increasing efficiencies and reducing product loss in the supply chain, and improving shelf-life. However, it was only in 2011 that TCL acquired UK's leading vacuum manufacturer British Salt, which aided in significantly expanding the company’s global footprint.
With a dominant position in the soda ash space, TCL gradually spread its growth run both vertically and horizontally. A company that the first sixteen years could not declare any dividends, today with consistent focus on building customer centricity, growing brand equity, developing innovative solutions and successful execution has witnessed a fivefold increase in revenue over the last 10 years. One of the key reasons for this has been the third pillar of its business – consumer products. Market leaders in the salt segment, TCL added other healthy salt variants targeting health conscious consumers and hygienic pulses to its portfolio. Rallis, a subsidiary, was engaged in a project called ‘grow more pulses’ with the Tamil Nadu government to alleviate India’s shortage of pulses, which led to the I-shakti brand of consumer products. Keeping innovation and growth on parallel, TCL also drives ground-breaking inventions such as the Tata Swach – a low-cost water purifier that took form at Tata Innovation Centre, Pune. The centre today works as a unique lab for the company’s future growth, focused on nanotechnology and biotechnology.
In an industry rendered turbulent by market forces, TCL is changing the face of chemistry by turning into a complex molecule-type organisation. There a more pervasive, almost holistic change in the vision and orientation of the company, in a human metaphor, TCL has developed into an identity that is more well-rounded and mature. The company’s investments over the past years have been centred on innovation, new technologies and new products. This has also seen a transformation on the turnovers, as the company swelled its numbers from Rs3,100 crore from Mithapur and Babrala in India in 2005 to Rs13,800 crore consolidated from all its plants.
From being the first chemical company of the country to serving society through science, and from riding the industrial revolution to today being a solution provider focused on R&D and cutting-edge technology, TCL clearly has played its role in serving society through science. At 75, TCL is India’s gränd däm with a winning chemistry for life and sustainability at its core. But, what they say about such legends is that they are always in the making!