Tata Steel Financial History by npa13662

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									Corus Group
  In France


                         Beniamin SMOLIJ
                         Sandor ERDEI
                         Kitty LIANG
                         Ga-Eun OH

      Best In France
   Mon, 10 Dec 2007
 Prof. Michael SEGALLA
             Executive Overview

■   Introduction
■   History of Corus & recent acquisition
■   Steel Market
■   Corus in France
                       Introduction
■   Corus Group
       Aerospace, engineering, automotive, packaging,
        construction, energy & power generation, consumer
        products, rail
■   Corus French subsidiary
       provides a range of rail products and railway
        infrastructure services to the international rail
        industry
    Corus Group
Financial Performance
                     Sogerail
■   A subsidiary of the Usinor group(French
    company)‫‏‬
■   Employees : about 430
■   Products: rail products
■   Location : at Hayange in the Lorraine region of
    France.
■   Turnover : 170 million euros
                                     (March 1999 Recorded)‫‏‬
               Birth of Corus Group
■   British Steel acquired Sogerail on 2nd October 1999
■   British Steel merged with the Dutch steel producer
    Koninklijke Hoogovens to form Corus Group on 6
    October 1999
■   After this merger, conflicts led bad performance
       In 2001, operating loss touched £1.152 billion
       In 2002, losses stood at £458 million
■   In 2003, new CEO, Philippe Varin implemented
    „Restoring‫‏‬Success‟‫‏‬program
       cost savings touched £680 million in 42 months,
       employee productivity rose by 5% in 2005
         Acquisition by Tata Steel
■   In Oct 2006, the board of Corus decided to
    accept‫‏‬Tata‟s‫‏‬proposal‫‏‬to‫‏‬acquire
■   Brazilian steel company CSN announced to
    participate in acquiring Corus Group
■   The price was getting increased due to
    competition
■   Tata Steel acquired Corus Group at 608p per
    share in April 2007
■   Tata Steel Group consists of Tata Steel &
    Corus Group Ltd
History of Corus Group

    British
    Steel Sogerail



                        Koninklijke
    British Steel       Hoogevens
                        N.V..(Dutch)‫‏‬



                    Corus



           Tata
           Steel     Corus
2006 Global Steel Industry
After the acquisition
           World Steel Consumption
                600



                500



                400
 Million Tons




                300



                200



                100



                 0
                      1,997 1,998 1,999 2,000 2,001 2,002 2,003 2,004 2,005 2,006 2,007 2,008 2,009 2,010

EU-25                 143   152   152   159   156    155   158   160   160   167   169   173   177   183
USA                   108   116   111   115   102    103   101   116   104   110   111   113   115   117
JAPAN                  82    70    69    76    73    72    73    77    78    81    81    81    82    83
CHINA                 103   110   123   125   154    186   233   270   315   356   403   443   470   489
MIDDLE EAST            16    17    17    20    23    25    30    31    35    37    40    44    46    48
Sogerail   British
            Steel
         Entering the French Market
■   Rail is a steel niche market
■   Access to European market through France.
       Know-how
       Transport, logistics
        Personnel Merge in France
■   Commercial unit moves to new French base
■   10 French employees laid off
■   30 British employees moved to France



■   British Nationals: 30
■   French Nationals: 20
         Differences in style emerge

■   Centralization
■   Limited autonomy
■   Bureaucracy
                Cultural differences

           English                       French
■   Meetings:                  ■   Meetings:
       Highly organized              Less organized
       Nice presentations            More discussions
       Less decisions                Faster decisions
■   Contacts                   ■   Contacts
       The boss speaks only          The boss speaks to
        to immediate                   every employee
        subordinates
                               ■   Language:
■   Language                          High expectations of
       Bonjour, Merci..               English proficiency
               Corus rail today
■   Only 5 British employees remained from the
    original 30
■   These 5 settled down in France
■   The‫‏‬British‫‏‬and‫‏‬the‫‏‬French‫‏‬couldn‟t‫‏‬work‫‏‬
    together in long-term
        Negative effects of the merger
■   British tried to launch new products with their
    model, ignoring the French objections




■   Mr. Dabas and 3 other French managers left
    the company
         Positive effects of the merger

■   More control than before the merger



■   less accidents, the factory is safer for the
    workers
Merger with Tata
              Merger with Tata
■   We do not know the results of the Tata takeover



■   Mr.‫‏‬Dabas‫‏‬thinks:‫‏‬Tata‫‏‬doesn‟t‫‏‬even‫‏‬know‫‏‬that‫‏‬
    Corusrail exists
■   Tata is too far from France
         “Test‫‏‬of‫‏‬interests‫‏‬of‫‏‬Tata”
■   Corusrail will ask at the end of 2007 for
    investment
■   Increase Rail length 80          108
■   Competitors have 120, but 108 can easier
    transported
■   Mr. Dabas advice: sell off Corus Rail
                  Conclusion
■   Give confidence to the former employee
■   Don‟t‫‏‬control‫‏‬everything
■   Send people who know French culture or at
    least are interested in it
■   If the objectives are not met than discuss
                   We Thank

■   Mr. Gerard Glas CEO
■   Mr. Hubert Dabas Commercial Manager
■   Ms. Laure Lafare Andministrative Assistant
Thank you for your attention!

								
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