A PRESENTATION OF

ECONOMICS ANALYSIS

ON

TATA STEEL LTD.

 

1.Introduction about Steel Industry2.Introduction about Tata Steel Industry

1. Mission & Vision2. Tata Steel Profile3. Board Of Director4. Product Line

3.Data analysis and interpretation4.Economies of Scope5.Economies of Scale6.Diversification 7.Conclusion Bibliography

Indian steel Industry

Before Independence The roots of the Indian Steel industry in modern

times can be traced to the year 1874. . One of the most important landmarks in the history

of Indian steel industry was the commencement of the Tata Iron and Steel Company at Jamshedpur in the state of Bihar in 1907.

The other prominent steel manufacturers before independence were Indian Iron and Steel Company (1922),Mysore Iron and Steel Works(1923) and Steel Corporation of Bengal (1937).

After independence India found it difficult to sustain development in

steel sector after independence on its own due to the lack of technological development.

The high cost of developing technology in this sector proved to be a major hindrance. That's when the government decided to go for synergy with other countries for technology transfer.

Post liberalization• The need for license for increasing capacity has

been abolished. • Steel industry has been removed from the list of

Industries under the control of state sector.• Foreign equity investment in steel has gone up to

74%.

• In January 1992 the price and distribution controls were removed.

• Policies like convertibility of rupee on trade account, freedom to mobilize resources from overseas financial markets and restructuring of existing tax structure have immensely benefited the industry.

Milestone The takeover of the British steel giant Corus

steel by Tata Steel and the acquisition of Arcelor by Mittal Steel herald a new beginning for the Indian steel industry.

These events signify the fact that the Indian steel industry has acquired a global identity and are today extremely competitive globally.

Some of the prominent steel producers today are Posco, Tata steel, Essar, Ispat, Sail and Rinl.

Interpretation:- 

◦ The production of total finished steel (alloy and non-alloy) registered a compound annual growth rate of 6.7 % between 2005 and 2009. While consumption increased at a faster rate of 9.3% during the period.

Company History: Tata Iron & Steel Company Ltd. (TISCO) is the

iron and steel production company associated with the Tata group of some 80 different industrial and other business enterprises in India, founded by members of the Tata family.

TISCO operates as India's largest integrated steel works in the private sector with a market share of nearly 13 percent and is the second largest steel company in the entire industry.

Tata Steel has not limited its operations and businesses within India but has built an imposing presence around the globe as well.

During the financial year 2009-10, the Group recorded deliveries of 24 million tonnes against 28 million tonnes in the previous year.

The Group’s South East Asian operations comprise Tata Steel Thailand, in which it has 67.1% equity and Nat Steel Holdings, which is one of the largest steel producers in the Asia Pacific with presence.

VISION

We aspire to be the global steel industry benchmark for Value Creation and Corporate Citizenship.

MISSION

Consistent with the vision and values of the founder Jamsetji Tata, Tata Steel strives to strengthen India’s industrial base through the effective utilization of staff and materials. The means envisaged to achieve this are high technology and productivity, consistent with modern management practices. 

Tata Steel recognizes that while honesty and integrity are the essential ingredients of a strong and stable enterprise, profitability provides the main spark for economic activity.

TYPE : Public (BSE: 500470) INDUSTRY : Steel FOUNDED : 1907 HEADQUARTERS : Mumbai, India AREA SERVED : Worldwide KEY PEOPLE : Ratan Tata (Chairman) B Muthuraman (Vice

Chairman) HM Nerurkar(MD) REVENUE : $21.582 billion (2010) PROFIT : $-423.5 million (2010) TOTAL ASSETS : $24.446 billion (2010) TOTAL EQUITY : $5.082 billion (2010) EMPLOYEES : 81,269 (2010)

REASONS FOR DEC. PROFIT (Rs. In crores )

PARTICULARS FY ‘10 FY ’09 INC./DEC.

Purchase of power 1268 1091 +177

Fright & handling charge

1357 1251 +106

Net finance charge 1508 1153 +356

Store & spare stock 624 612 +12

Payment to and provision for employs

2361 2306 +56

Other expenses 5284 4754 +530

The situation in which the joint cost of producing two or more goods is less than the sum of the separate costs of producing the goods.

  Here TISCO enjoy the economies of scope because

firms produce a number of different products like Bearings , Spongeiron ,  Tubes ,  Pigiron and Rolls etc.

These multiproduct firms use inputs that contribute simultaneously to the production of Bearings, Spongeiron, Tubes, Pigiron and Rolls etc.etc.

An economy of scale occurs when long run average cost falls as output increases.

TISCO enjoys economies of scale because TISCO 'S production is very high.

TISCO is longer scale firms so that take greater advantage of opportunities for specialization and division of labour.

For TISCO second reason for contributing to economies of scale is technological factor.

So using technology in production system in TISCO reduces unit cost by expanding the scale of operation.

DIVERSIFICATION Tata Motors Tata Consultancy Services (TCS) Tata Power Indian Hotels Company (Taj Hotels,

resorts and palaces) Tata Tea

CONCLUSION It has to be said that the global recession has affected

the Indian steel industry especially stainless steel, but the steel industry is trying to offset the negative effect of the recession by focusing on transportation and construction projects which are usually funded by the government.

India is the only country globally to record a positive overall growth in

crude steel production at 1.01 per cent for the period January -March 2009.

It is estimated that India's steel consumption will grow at nearly 16% annually till 2012.

The National Steel Policy has forecasted the demand for steel would reach 110 million tons by 2019-2020.

BIBLIOGRAPHY Managerial Economics- Concepts and

Applications - Christopher R Thomas and S Charles

Maurice- The McGraw-Hill- 8th edition http://www.tatasteel.com http://en.wikipedia.org http://www.business-standard.com/india/

news http://ibef.org Tata Steel Annual report 2009-10