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Tata Steel not to invest in telecom

BS Bureau

Tata Steel has decided not to invest in the group's telecom venture and is exploring other non-steel avenues for business.

B Muthuraman, managing director, said, "Tata Steel has decided not to invest in telecom and we are exploring other business. In fact, it makes little sense to look for new businesses in which Tata companies are already operating".

The main objective behind entering into a new business is to create shareholder value. The company has set a target of positive economic value added by 2005-06. Muthuraman said that it was possible that the business would be a new venture for Tata Sons altogether.

Though, Tata Steel holds 5 per cent of the issued share capital of Panatone Finvest which acquired 25 per cent in VSNL, the company spokesperson clarified that this is not for business purpose but, a mere parking of funds.

The main shareholders of Panatone are Tata Sons and Tata Power having 50 per cent and 40 per cent stake, respectively.

Despite a challenging domestic and global environment for the steel industry, Tata Steel would endeavour to create value for shareholders by focusing on improvement through cost reduction, productivity improvement, reducing raw material consumption, modernisation, value added product mix, focus on key segments, effective distribution system and sale of branded products.

Muthuraman pointed out that branded products has been a major driver for growth. According to figures, branded products-Tiscon in long products and Tata Shaktee GC in the segment flat products, account for 10 per cent of total sale.

The company spokesperson said, the only segment which remains to be branded is construction steel.

Commenting on the ferro chrome project Muthuraman said, the company is awaiting some clearances from the South African government and will take a decision as soon as they are through. Tata Steel plans to invest around Rs 2.50 billion in the venture.

On the titanium project, Muthuraman said, "We have applied for lease in Tamil Nadu and Andhra Pradesh and are waiting for the same to come through."

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