Photographs: Danish Siddiqui/Reuters
Tata group will invest more than Rs 45,000 crore (Rs 450 billion) on various businesses over next two years and would look to expand its presence in global markets besides in India, the group's new chief Cyrus P Mistry said.
In his first message as chairman of Tata Sons Ltd, the holding company of over $100-billion salt-to-software conglomerate, Mistry also said the 'core of the Tata group' will remain unchanged despite change in its leadership and asked the group companies to play leadership roles in their respective businesses.
44-year old Mistry has taken over as head of Tata group from Ratan Tata, who retired on December 28 after spending nearly 50 years with the group including 21 years as chairman.
In a message to employees, Mistry said the group has evolved into a global conglomerate with an "incredible" size of over $100 billion under Ratan Tata's leadership.
"Handing over of the responsibility of chairmanship brings with it the winds of change, but the core of the Tata Group must and will remain unchanged," the new chief said.
"... without this core DNA that is uniquely Tata, there is nothing to differentiate us from our peers," Mistry said.
Noting that the group has invested over Rs 50,000 crore (Rs 500 billion) in the past three years across various businesses while creating over 85,000 jobs, Mistry said plans have been put in place "for additional investments in excess of Rs 45,000 crore over the following two years."
The group's headcount was nearly 456,000 at the end of fiscal year 2011-12.
"Apart from India, we will be required to work to both deepen and widen our global engagement with an emphasis on emerging markets in Asia, Africa and parts of Latin America, adding to our existing presence in Europe and America," he said.
Cyrus Mistry's first message as chairman
Photographs: Christian Charisius/Reuters
Mistry also expressed confidence in the Indian growth story and said the government's recent emphasis on policy clarity and renewed thrust to economic reforms is encouraging.
"With a sustained focus on policy stability and implementation, I believe that India would continue to be an attractive investment destination. I look forward to our group playing its role in continuing to invest in the Indian growth story," he said.
About global expansion of the group, Mistry said each of its companies would follow a different path "with differing approaches to spreading of risk, acquisition of technology, access to talent, and investment in long-term growth markets."
He also warned against any complacency, saying that history has shown that groups "that are happy with resting on their laurels are weeded out by nimble competition".
"We live in increasingly competitive times. To succeed in such an environment, we will need to differentiate our approach and innovate," Mistry said.
"... across our businesses, we need to be able to respond swiftly and adapt to changes in market conditions anywhere in the globe. We must differentiate ourselves from our competitors through a greater understanding of customer needs and a culture built around customer centricity, innovation, and a focus on profitable growth.
"We will need to be relentless in our pursuit of improving our competitiveness and in addressing the small issues that are often overlooked but end up making a significant difference in the value proposition of our products and services," he said.
Tata group comprises of over 100 companies in businesses including technology, communications, engineering, energy, consumer products, and chemicals. It has operations in more than 80 countries across six continents.
Its total revenue stood at $100.09 billion (around Rs 475,721 crore) in 2011-12 with 58 per cent of this coming from businesses abroad.
Cyrus Mistry's first message as chairman
Photographs: Krishnendu Halder/Reuters
Talking about the current economic scenario, Mistry said that each of the Tata group companies needs to play leadership roles in their respective businesses.
"There is currently much debate about the future of free markets across the world, particularly in the wake of the global financial crisis. At such a time, I believe our businesses must play a leadership role in strengthening the positive feedback loop between markets and the institutions that govern their operation," he said.
Mistry also called for a need to carry along all the key stakeholders, including employees, shareholders, suppliers, lenders, partners, communities and the governments, in taking forward the group's onward journey.
"After all, ultimately our very purpose is long-term stakeholder value creation. In this pursuit of global excellence, we must stay true to our tenets, our traditions and our heritage," he said.
Mistry also promised going beyond "regulatory" requirements for steps to be taken for the benefit of environment and corporate social responsibilities.
"As with any of our businesses, we will leverage our managerial capabilities to ensure we bring innovation to our Corporate Social Responsibility initiatives, optimise their effectiveness, and seek to create measurable impact for our Group as a whole," he said.
Calling the group's employees as "partners in growth", Mistry said he is keen to ensure that the groups continues "to nurture and recognise outstanding talent in a true meritocracy."
"A considerable premium needs to be placed on working together in teams that leverage and collectively enhance each of our individual strengths. We must leverage the power of the Group by encouraging our people from different Tata companies to share best practices and work together in co-creating shared value," he said.
"The Tata Group's revenue today stands at over $100 billion. That seems an incredible figure when you consider where we were a decade back. With our collective zeal and effort, I am convinced that we can together write a future that continues to build on the past and takes the Tata name to newer frontiers of growth.
"Your hard work and dedication has contributed to the success that the Tata Group enjoys. At this moment of transition, I am counting on the support, which you have so wholeheartedly given through the years, in good times and when adversity was upon us. For my part, I pledge to work alongside you, to reinforce the unique platform that has been handed over to us by (Ratan) Tata," Mistry said.