Tata Chem to focus on farm, consumer businesses

Change is afoot at Tata Chemicals. The company is looking at positioning itself less as a chemicals company, and more as a holistic provider of products and services based on science, according to Ramakrishnan Mukundan, Managing Director. Stating that the chemicals’ business is in the maturity stage, Mukundan said the farm and consumer businesses have been identified as the two pillars of growth for the next five-seven years.

In an interview to Tata Review , the Tata group’s internal publication, a copy of which is with Business Line , Mukundan has said there is an increased realisation that “we are an enterprise with three distinct businesses and business models and each one will need its own space to grow... hopefully the impact of the restructuring of the UK business should be behind us and the reconfiguration exercise for the Magadi business (the company is Africa's largest soda ash manufacturer and one of Kenya's leading exporters) will be under way. We will be able to renew and recharge the company and bring it back to healthy performance.''

The company, which is heading into its 75th year of operations, intends to intensify focus on agri-business by investing ₹500 crore over the next two years. Tata Chemicals is also looking at increasing investments in high-tech products such as specialty fertilisers, herbicides, weedicides and high grade seeds.

Mukundan said the agri-business could grow from ₹8,000 crore to about ₹15,000 crore in the next few years.However, a conscious decision has been taken at the company to “stay away from products where government subsidies are involved... We have decided to not invest in the commodity segment of the agri-business,” said Mukundan.

In line with this thinking, the company also pulled out from the Gabon fertiliser project in Africa.

Even as the flagship soda ash business is emerging out of a rough period in Europe and Kenya, with teams addressing the reconfiguration of the business, Mukundan said new business growth is expected to come from farm inputs and food and nourishment products.

The company has identified the export potential for the farm input business, especially in Africa, South-East Asia and Latin America, and is working closely with Tata International to aid the effort.