The proof is in the roof
Riten Choudhury, MD, Tata BlueScope Steel, on how the company has become a household name across its products
If you had to reminisce on the highlights of the last few years, what would they be?
I have been with the Tata Group since 1990 and was assigned to Tata BluesSope Steel in 2010 as VP of building products. We grew that business substantially till 2013. In the same year, I took over as MD. Year 2013 was a challenging phase as our manufacturing operations in Jamshedpur had just started and our mandate was to ramp up production. Since it was a new plant, we had to contend with issues such as manufacturing processes, quality, productivity, etc. My first challenge was to stabilise the plant since we had already invested more than Rs 1000 crore, and was our largest investment. We sourced the plant and equipment from Siemens-VAI and is one of the most modern plants in the BlueScope family.
Increasing production was alright, but we needed to create a market for the premium products we were manufacturing, and that was not a large one. Our issue was that Tata BlueScope products are considered niche. A strategic move we made was to focus on retail as that would give us quick volumes in terms of growth and so we quickly built up a retail network to the current level of 4000-plus retailers. Though we had a retail business since 2008-2009, initially we ran the business with imports from BlueScope plants since we didn’t have a local facility. We developed Tata Steel’s existing network of distributors for galvanized sheets to sell colour coded products. In addition, we added a second layer of influencers (fabricators) and have close to 6000-7000 fabricators who help us with the smaller customers. This business has now grown to 12,000 tonnes per month in retail alone.
Second area of concern was that building solutions business which focused on design and commissioning of large buildings was going through a rough phase. We restructured the organisation and made it result oriented thus giving authority to sales heads, while creating a new business model.
In addition to that we worked on the manufacturing plants of downstream businesses. We have two plants, one at Sriperumbudur (Chennai) and the other at Bhiwadi (Rajasthan) but realising the logistical nightmare, we decided to construct two more plants to be closer to customers. We built one in Pune and the other in the East and created a hybrid business model where the manufacturing plant and the workforce is owned by a third party. We own the equipment, our officers are responsible for quality control, dispatching, and customer service. An advantage we have is the ability to supply roll form products to end customers from our own plants, and are the only company to do so.
A moment of pride for me is that I when I took over the company we had made a loss of Rs 185 crore but over the last four years we have turned around the company and clocked a three digit net profit consistently.
How do you work out the procurement of raw materials across the four plants?
We have a midstream plant at Jamshedpur that manufactures metal coated and colour coated coils. Our requirements for cold rolled steel is fulfilled by Tata Steel. For other key raw materials like paints, zinc and aluminium we have global suppliers where-in we have strategic tie-ups along-with BlueScope Steel and Tata Steel to get consistent supplies of best in class materials to ensure a quality product. These metal and color coated coils are then sent across to our four downstream plants across the country where they are processed into the final products. Considering that we look at customer delivery within a week, it is easier for us to ship out the coils to the various downstream plants.
How do you ensure the quality of products offered to your customers?
We are proud of our sophisticated equipment at the Jamshedpur plant. The imported machinery is highly advanced and that ensures quality across coating and paint thickness. At our other plants too, we have imported the machinery from global leaders such as Bradbury and Hayes. These machines perform accurate roll-forming and punching operations.
In terms of coil parameters, we have a well-equipped laboratory of international standards with a technical team trained at BlueScope Steel Australia, that monitors the quality. We procure high tensile steel with a strength of 650-700mpi from Tata Steel. This is further processed through top-end equipment supplied by internationally renowned manufacturers like Siemens VAI, Fives, Hatch, SAS, Ajax. This ensures complete flatness, uniform metal, colour coating and baking. We also have global tie-ups with world class paint suppliers like AkzoNobel and PPG for products which have been developed by them in collaboration with BlueScope Steel. This enables us to supply customers with painted products having high gloss finish with superior durability.
Our own factories at Hinjewadi and Jamshedpur are constructed using 100% of our steel and are landmarks. The life of steel also depends on the metal coating thickness. Unfortunately in India several manufacturers misguide customers by selling lower quality steel of 50-70gsm and offering it as 120gsm. We have also seen the retail markets being flooded with imported material of very poor quality. We hope that with the consolidation happening in the steel industry, one will see better quality products being offered to customers.
What are the safety processes followed at your plants?
We are one of the most safety conscious companies and are considered a benchmark not only in the industry but across manufacturing plants. BlueScope is considered a global leader in safety and the level of safety practices we follow at the plant level and at construction sites have become a benchmark for even our competitors. This makes us glad, as we would like industry levels of safety to go up considerably. For us, our employees come first and their safety and their family’s safety is extremely important, and while it may push up operational costs substantially, we refuse to compromise on employee safety. As an organisation, we are proud of our safety initiatives and have bagged several awards for it.
What are some of the advantages of your products? How do you look at R&D across raw materials and finished goods?
One of the advantages of our steel is that it brings down the inside temperature of the room by 50 Centigrade as compared to any other steel. It is because of the superior quality of paint we use. The paint is highly expensive & patented by BlueScope Steel.
We are the only company that has sites across the globe in Australia, New Zealand, South East Asia, India, sites close to the sea, and at high altitudes where our samples have been kept for over 20-25 years to see the effect atmosphere has on it. BlueScope has a reputation for its colour coating and metal coating technology with laboratories in Australia and Singapore and they bring in the product developments from these two locations.
We have our own design team in India who come up with different profiles which are then tested by reputed institutes like IIT Chennai, before they are offered to customers. Our ZINCALUME steel is the world’s leading Al-Zn alloy coated steel product and continues to set standards for corrosion resistance and long life. We have 250,000 tonnes per annum of metal coating and 150,000 tonnes of colour coating capacity. With Tata’s acquisition of Bhushan steel it has further added another 450,000tpa capacity within the group. Our BUTLER Building Systems is a premium, globally renowned building solution, which provides design, manufacture and construction of pre-engineered steel buildings. We are scaling up that business considerably. This year we crossed a turnover of Rs 2000 crore and Rs 1000 crore in retail and our plan over the next three years is to take the turnover to Rs 5000 crore.