India_US book fin_96-136.qxd 6/15/07 10:23 PM Page 118 THE TATA GROUP Revenues of Tata Group from International Operations: Group Background (2002-06) 8.00 7.00 6.70 The Tata Group comprises over 100 companies 6.00 operating in seven business sectors - information 5.00 4.40 systems and communications, engineering, 4.00 3.20 materials, services, energy, consumer products, 3.00 2.50 and chemicals.The Group was established by 2.00 1.00 Jamsetji Tata in the mid-19th century. Some 0.00 of the major companies in the Tata Group are 2002-03 2003-04 2004-05 2005-06 Tata Motors,Tata Tea,Tata Steel,Tata Consultancy Year Source: Tata Services (TCS), etc. The Geographic break-up for FY 2005-06 The Tata Group is a diversified group providing services to varied clients. It has a strong team of almost 250,000 employees working in its various 30% 23% companies.The Tata Group generated revenues of approximately US$ 22 billion in 2005-06. As of February 1, 2007, the Tata Group had a market capitalisation of US$ 57 billion. 9% 1% Global Footprint of Tata Group 31% 6% Tata Group's overseas presence started when its Asia and Australasia founder, Jamsetji Tata, began his business career Africa by trading in China and England.The first overseas Latin America Tata office was established in London in 1907. Middle East/Gulf Today, the Tata Group has operations in more than North America 54 countries (in all six continents) from where Europe Source: Tata it serves its customers and clients in over 120 countries.TheTata Group witnessed a 51 per cent TCS,Tata Steel,Tata Tea,and Tata Motors contribute growth in revenues from its international business approximately 78 per cent to the total revenues in 2005 as compared to the previous year.The from the international business of the Tata Group. Group has an aggressive sales and marketing The Group has reported a CAGR of 38 per cent strategy in place to tap the potential in the in revenues from international operations for the international markets. period 2002-03 to 2005-06. 118 India_US book fin_96-136.qxd 6/15/07 10:23 PM Page 119 Tata Group Following is a brief discussion on some of the Tata in the United States of America Group companies operating in the US: Tata Group marked its association with the United Tata Consultancy Services States when Jamsetji Tata came to the US searching for technology for India's first steel mill.Today, the Mode of Operation Tata Group operates in the US through its acquired TCS operates in the USA through its wholly ventures, various subsidiaries, joint ventures, and owned subsidiary,TCS North America. sales and marketing alliances with various partners. The Group established a permanent presence in Overview the USA in 1945 by opening a representative office. TCS established operations in the USA in 1971 Currently, the group has over 80 offices that but opened its first office in New York City in provide high-quality, reliable and cost-effective 1979.The company provides IT services, consulting, products and services to its clients.Tata Sons' business process outsourcing, and engineering corporate office is located in Washington, D.C. services to clients in various industry domains. and the various representatives are spread across Banking, financial services and insurance (BFSI) the US, including at the TCS and Tata Steel is the largest vertical for the company in terms headquarters in New York City. of revenue generation.Apart from BFSI, the manufacturing and telecom verticals are the other The Tata Group has been actively developing major contributors to company revenues. strong relations with its clients and vendors. North America is an important market for the For the financial year 2005-06,TCS generated group and it contributes approximately 31 per revenues of approximately US$ 2 billion.The North cent to its overall revenues from the international American market is the largest contributor to its business. Some of the Tata Group companies revenues i.e. approximately 60 per cent. In North with a significant presence in the US, but not America,TCS has over 50 offices. It has established limited to, are: ten development centers and five key industry- • Eight O'Clock Coffee specific centers in the USA. • Good Earth Teas Industry-Specific Centers in the USA • Taj Hotels and Resorts • Tata Autocomp Systems TACO Center’s Competence Location • Tata Consultancy Services Automotive Detroit • Tata Elxsi High-tech Lab Sunnyvale • Tata Inc. (Tata Steel) RFID Lab Chicago • Tata Interactive Systems Performance Lab Minneapolis • Tata Johnson Controls • Tata Sons Training Center Buffalo • Tata Tea Inc. • Tata Technologies/Incat As of March 31, 2006,TCS had 12,000 skilled • Titan Industries/Tanishq professionals in the US market, out of which • Tetley North America over 600 professionals have been hired locally. • SerWizSol The company plans to ramp up its local headcount • VSNL International to 1,000 over the coming years. 119 India_US book fin_96-136.qxd 6/15/07 10:23 PM Page 120 TCS provides services to various clients, including it has acquired FMALI Herb Inc. (USA) and Good AT&T, Boeing, Canadian Depository for Securities, Earth Corporation to gain a stronger foothold in Citibank, Compaq, Dell Computer Corporation, the market. Fidelity Investment, Ford, General Motors, General Electric, ING America, Microsoft, Nike, Prudential Overview Insurance USA,Texas Instruments,SIS In 1987,Tata tea established its subsidiary Tata Tea SegaInterSettle, etc. Inc. Headquartered in Florida, USA, the company produces a wide variety of instant tea targeted Tata Steel at health-conscious consumers. It manufactures approximately 40 different flavors of instant tea Mode of Operation sourced from India. It manufactures formulations Tata Steel operates in the USA through its wholly- with different flavors and sweeteners by modifying owned subsidiary,Tata Inc. It acts as a trading the physical parameters - such as the density and company for its parent company. particle size - of the tea, or by blending it with other additives. Overview The company has an active international sales and The company has established a strong sales and marketing network spanning the USA, Dubai, South marketing channel to market its products in the Africa, Sri Lanka, Nepal, Bangladesh, Shanghai, Hong USA.The company has been very active in Kong, the UK, and Singapore.The company owns acquisitions in the US market to gain a stronger captive raw material resources that translate into presence. In addition to the Tetley brand of tea, a competitive edge. some of the other major acquisitions made by the company include the acquisition of Good Earth tea The company's processes are ISO 14000-certified. and Eight O' clock coffee.Tata Tea Inc. has acquired Tata Steel is an esteemed member of various a 30 per cent equity stake in Energy Brands Inc organizations and associations such as the (USA) for US$ 677 million including a stake in the American Institute for International Steel, the Glaceau vitamin waters brand of the company. American Wire Producers' Association, the Metal These acquisitions have assisted the company Service Centre, the US-India Business Council, in strengthening its presence in the American and the Post-Tensioning Society. beverage market as well as in diversifying its product offering (tea, coffee, flavored tea, energy Tata Steel generated revenues of approximately drinks, and vitamin water). Currently, black tea US$ 3,743.65 million in FY 2005-06, including sales produced by the company has a 10.4 per cent of approximately US$ 90 million from the US share in the American market. It generated region.Tata Inc. acts as a parent body for Tata Steel revenues of approximately US$ 138 million from in the USA and imports steel and allied products sales in North America and Canada. from group companies in India. VSNL Tata Tea Modus Operandi Modus Operandi The company operates in the USA through its The company operates in the USA through its subsidiaries,VSNL America Inc,Teleglobe America holding company,Tetley US Holding Ltd. In addition, Inc, and VSNL International (US) Inc. 120 India_US book fin_96-136.qxd 6/15/07 10:23 PM Page 121 Joint Venture Name Partner Company Product Segment Automotive Composite Owens Corning (USA), Sheet moulded composites Systems International Menzolit-Fibron (Germany) (SMC) TACO Hendrickson Hendrickson International Suspension systems Suspension Systems (THSL) (USA) Tata Johnson Controls Johnson Controls (USA) Seating systems Automotive Ltd. (TJCAL) Overview of its clients i.e. manufacturing, engineering, and VSNL started its operations in the US in 2003, supply chain management. with an objective to establish and provide solutions in Internet Protocol -Virtual Private Network The company has over 50 employees in its US (IP-VPN).The company's service in IP-VPN assists office, mainly working within the several joint it in managing the Internet bandwidth between ventures that the company has formed, to develop India and the USA. automobile products for US automobile companies. Some of the major joint venture operations of the In 2005,VSNL acquired Tyco Global Network, company are: which has facilitated it in gaining a strong submarine cable network.This has also assisted Tata Interactive Systems the company in emerging as one of the leading companies in the world that provide services Modus Operandi in submarine cable bandwidth encompassing Asia, Tata Interactive Systems (TIS) operates in the USA Europe and North America. Its acquisition through its sales and marketing offices. of Teleglobe has extended its reach to over 240 countries. Overview TIS is a pioneer in the custom training solutions Currently, the company employs 281 personnel, segment. Its core offerings include performance out of which 94 per cent are US citizens.