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Overwhelmingly the two largest companies in the Tata Group--and the two largest private sector companies in India--are the Tata Iron and Steel Company (TISCO) and the Tata Engineering & Locomotive Company Limited (TELCO).
TISCO is a diversified industrial conglomerate, whose wide range of products are spearheaded by metals and engineering. Despite difficult economic times, in its last financial year TISCO reported a record turnover of over US$1 billion--and it is this combination of industrial diversity and financial solidity which make TISCO India's most likely candidate for a capital issue on the international capital markets.
The strength of TISCO's financial results stems from three core strategic thrusts: earnings diversification, technological superiority and export-oriented production. The strategy of diversification has led the company from straightforward coke, iron and steel production into specialised engineering, where TISCO turns out everything from bearings, tubes, wire rods and refractories into commodity and ore exports.
Identifying the key to success in the steel industry as the provision of value-added products, TISCO has invested heavily in the latest technology. This ranges from on-line computerisation of information processing through to the most modern process control technology. The fruits of this investment are clear to see, as TISCO has become India's largest single producer of special steels.
Investment in state-of-the-art technology continues apace: last year the company commissioned the world's largest energy optimising furnace at Jamshedpur, where it is installing a new one million tonne per annum blast furnace. This important energy efficiency drive has produced the lowest ever levels of energy consumption in essential areas. A modern cement plant based on the utilisation of slag generated during the manufacture of steel is under installation.
Substantial investment in technology, enabling TISCO's products to compete effectively in the global market, has meant that exports have become a cornerstone of the company's financial strength. Over the past seven years, exports have risen from zero to over US$102 million, 90% of which...