Minerals: Onwards and upwards
December 26, 2019
Tata International resumed its Minerals trading business in 2011. The idea was to create a sustainable business model based on trading products anchored around India’s energy demand in the medium term. Since then, the business has established itself as one of the top imported thermal coal trading houses by volume in India. The team has also grown from five members to 50+ members globally, with volumes of approximately 10 million MT in FY19. The business currently has operating presence across India, Singapore, China, Vietnam and Indonesia.
Mr Alfred Egli, Head – Minerals states, “We entered the Indian market as an asset light trading company and created value. After building up our bulk trade customer base, we expanded into the retail space in India. We were able to achieve a key milestone of becoming one of India’s top thermal coal trading houses. Based on this, we were also able to establish meaningful trading presence in adjacent markets. During the growth process we remained true to the Tata Code of Conduct and the core values that underline the Tata brand.”
Mr Ashish A. Navaney, Head – Minerals, explains further, “Building on this foundation, we are looking to expand our market share in existing and new geographies, entering trade of select new products as well as expanding our presence in the value chain. During this phase, we are also strengthening our risk management and talent management practices.”
Another imperative in this business is the ability to make quick decisions and adjusting to new market conditions as they appear. To enable this, the business is structured in a lean manner to support agile responses and open communication across functions and locations.
People are the most valuable asset in this business. Various specialized skills in this trade range from understanding of end-use requirements across sectors, understanding global market trends and inter-linkage of price with various economic factors, relationship management and commercial skills, risk management and functional expertise such as trade finance, documentation and banking.
Some of these capabilities and market impact were recognized when the Minerals business won the Coal House of the Year 2019 award from Energy Risk Asia in November 2018.
Another key ingredient in this business model is sustaining the right environment for the operating team, enabling a healthy exchange of ideas, providing opportunities for growth and fostering collaboration. “It is, in fact, the passion of the team to ‘own’ its growth story and its commitment to fair business practices consistent with the Tata brand that have been key to its success so far. Good market reach, meaningful stakeholder relationships and an inclusive team culture have helped build a solid foundation,” continues Ashish.
“We want to add value by further vertical integration – both up and downstream. We are trying to be the direct link between our sources and end-users, keeping the value chain as direct and short as possible. We aim to become one of the leading physical trading houses in Asia by 2025 through expansion of our presence in key markets and products,” concludes Fred on a positive note.