Tata Exports To Handle Groups Intl Marketing

The Tata Group has undertaken a major restructuring exercise under which Tata Exports would become the international export and marketing arm for all the group companies.

Tata Exports has begun talks with various group companies including Tata Tea, Tata-IBM and its textile companies Coromandel Garments, Gokuk Exports and Campbell Apparels to channelise exports through their company. At present, these companies have their own export divisions which handle their independent overseas marketing activities.

While Tata Teas export earnings had crossed Rs 200 crore during the previous fiscal, its textile companies had generated a total export earning of around Rs 100 crore. Tata-IBM, the software development company, exports its product through Tata Consultancy Services.

 

The strategy is to obtain maximum synergy within the groups various lines of business. The restructuring plan envisages that companies should concentrate on their manufacturing activities and achieve cost efficiency within their operations. The exports from these companies should be handled through Tata Exports which has acquired expertise in international marketing over the last 35 years of its existence, said M L Jain, general manager, operations, Tata Exports.

A similar move had been mooted earlier also. However, the company could not implement its plans then because of resistance from various group companies, who did not want to loose the benefits accruing from export earnings and did not expect shareholders to approve of such a move.

Tata Exports, whose turnover is expected to cross Rs 2,000 crore for the year ending March 31, 1998, has chalked out plans to expand its overseas business offices. The company is setting up new offices in Ghana and Angola in the west coast of Africa. This would be in addition to the 18 offices which it has already set up across various countries.

We are concentrating on those countries where we can sell our entire range of products, rather than a product specific country. We would not enter into those markets where we can sell only vehicles or only garments. It should have a wide demand portfolio, pointed out A K Sethi, general manager, who heads the Delhi office of Tata Exports.

At present, Tata Exports is channelising exports for group companies like Tata Steel, Telco and Tata Chemicals.

The plan to channelise all group exports through Tata Exports is to synergise the groups operations. For example, Tata Exports is already planning to tie up with tea plantations in Kenya for exporting its tea across the globe. We could do a similar thing for Tata Tea since we know the international markets and have expertise in it, said Sethi.

The company is also planning to concentrate on the exports of certain products like trucks, commercial vehicles and chemicals among others. These products have an increasing demand in the developing economies, especially those of Africa and Middle East countries.

The company has set up apparel manufacturing unit in Bangalore and planning to set up in other areas for getting into apparels in a big way. Its collaboration with Daks Simpson of UK, besides allowing it to import apparels and accessories from the foreign country for retailing in India, would also help Tata Exports to gather technology for apparel manufacture. It intends to enter into a licencing agreement with Daks for export of its garments into overseas markets.