Thachat Viswanath Narendran, Managing Director designate at Tata Steel, has been a staunch believer in forced ranking, where employees gauge their own performance and keep pushing themselves to improve the organisation’s performance.
Hand-picked by Chairman Cyrus Mistry from four Tata Steel contenders — Group Chief Financial Officer Koushik Chatterjee; Anand Sen, in charge of Kalinganagar project in Odisha; and Partha Sengupta, head of the raw materials division — Narendran is keen to raise the bar, pursuing opportunities that have been identified by Tata Steel to unlock value.
Narendran has been heading the money-spinning flat products division at Tata Steel, and has been credited with successfully managing the company’s first acquisition in NatSteel.
Singapore-based NatSteel was acquired by Tata Steel in 2005, in an all-cash transaction for Rs 1,313 crore.
With plants in Singapore, Malaysia, Thailand, Vietnam, the Philippines, Australia and China, the acquisition provided Tata Steel an immediate manufacturing footprint in seven countries.
At the time of the acquisition, NatSteel had an installed capacity of 2 million tonnes a year. Narendran played a vital role in the operational integration of Tata Steel and the NatSteel Asia group companies.
His first task at NatSteel was to ramp up production capacity across its units.
Since NatSteel bought all the raw materials any wrong buying decision or a bad pricing decision for a sales contract could wipe out a significant part of its profits. It was here that Narendran, who was deputed as Executive Vice-President in NatSteel in May 2005, engaged with suppliers and customers building healthy relations.
Before he headed back to India, NatSteel’s Singapore operations recorded its best performance since coming into the Tata Steel Group. However, other than China and Singapore, NatSteel’s units in Australia and Vietnam witnessed slow growth.
In 2009-10, with Narendran at the helm, NatSteel’s management reduced its inventory level by about 100,000 tonnes, which helped free up S$89 million of working capital for further investment. It also lowered its borrowings, thus, reducing its burden of interest cost.
Though structural changes have been put in place such as supply chain improvements and the introduction of differentiated products, Narendran would soon be occupying the hot seat of a speeding car. He had termed his tenure at NatSteel as akin to driving a car at high speed on a highway, with one car a few feet ahead and another car a few feet behind, all the while steering and keeping a close watch ahead as well as on the rear view mirror.
In his new position, Narendran has been entrusted with the task of steering a gradual turnaround in the company’s fortunes, both in Europe and in the high potential Indian market.
Steely Purpose
A mechanical engineer from the National Institute of Technology, Tiruchi, Narendran joined Tata Steel after his MBA from IIM- Calcutta in 1988. At 48 years, he will be the youngest Managing Director Tata Steel has ever had.
Narendran's prowess in flat steel products fits in well with the company’s expansion plans.
While the annual capacity in Jamshedpur is to expand to 10 million tonnes, of which seven mt is to be flat steel, the Kalinganagar plant is to have six mt of flat steel a year.
With the company also deciding to add a million tonnes of flat steel capacity every year, Narendran has already identified a new area for growth - small and medium enterprises (SMEs).
Though Narendran has emerged as the surprise choice for the post of Managing Director of Tata Steel, with incumbent H.M. Nerurkar retiring on October 31, the new chief is set to deploy his learnings from his earlier assignment at NatSteel.