Tata Chemicals turns 75; to focus on farm, consumer products

Tata Chemicals, part of the over $100-billion Tata Group, plans to focus on farm and consumer product businesses as it evolves from a pure chemicals company into a company that provides solutions to life's necessities.

Tata Chemicals, which started off 75 years ago, now pays an important part in improving the country's nutritional well-being through iodised and fortified salts, unpolished dals and safe drinking water, besides being a centre for the making of soda ash and salt, managing director R Mukundan said at a function at the BSE to celebrate 75 years of the company.

The company has also, through its farm essentials, helped realise the objectives of the 'green revolution' that has transformed Indian agriculture, he said.

Today, Tata Chemicals is a market leader in the salt segment; Tata Chemicals added 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.

Tata Chemicals also drives ground-breaking inventions such as the Tata Swach – a low-cost water purifier that took form at Tata Chemicals Innovation Centre, Pune. The Centre today works as a unique lab for the company's future growth, focused on nanotechnology and biotechnology.

In the farm business, the company will increase the non-bulk portfolio such as specialty and high-yield seeds to enhance farm productivity, he said.

"Having achieved leadership position in inorganic chemicals, that is soda ash, the company will now focus on building upon farm and consumer facing businesses," Mukundan said.

"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," he added.

Tata Chemicals executive director and chief financial officer P K Ghose said the growth drivers of the company will be in the Indian retail and farm sectors.

"We are building significant capabilities by leveraging our consumer and farmer reach, besides focusing on innovation-led products. We have 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," he added.

He said the company may explore a brown field expansion project in the US, subject to meeting the desired investment criteria.

Tata Chemicals today has become a global company with presence across four continents.

The growth story of the chemicals segment of the company began with the merger of Hindustan Lever Chemicals (HLCL) in June 2004, which enabled the company to expand its basket of fertiliser products beyond urea, by including complex fertilisers. It also brought Paras, a powerful crop- and region-specific customised fertiliser brand, which helped the company to grow its revenues by 60 per cent.

Tata Chemicals' first international venture came in 2005 by taking 33- per cent stake in a joint venture in Morocco, which met its entire requirement of phosphate.

The same year, it made another crucial acquisition – Brunner Mond ­– for Rs798 crore. This move catapulted the company from the 14th to the 3rd largest producer of soda ash in the world and in 2007-08, the company acquired US-based General Chemical Industrial Product Inc (GCIP), with significant natural soda ash reserves in Wyoming. This gave Tata Chemicals access to cheap resources, acting as 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.

In 2011 Tata Chemicals acquired UK's leading vacuum manufacturer British Salt and took its footprint to a larger global presence with capacities across four continents.

With a dominant position in the soda ash space, Tata Chemicals gradually spread its growth run both vertically and horizontally. A company that in the first 16 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 five-fold increase in revenue over the last 10 years.