Tata Steel, one of India's leading steel manufacturers, has announced a comprehensive review of its new materials division, marking a significant shift in its diversification strategy. The company, which previously set an ambitious target of generating 10% revenue from new materials by 2025, is now carefully assessing the scalability and long-term viability of these ventures.
The strategic reassessment, revealed by Managing Director TV Narendran, comes as the company evaluates the growth potential of its various new material initiatives. With a current turnover of ₹2.50 lakh crore, Tata Steel emphasizes the importance of focusing on businesses that can achieve meaningful scale within the organization's vast operations. The review process, expected to conclude within three to six months, will determine which ventures warrant continued investment and which might face potential exit.
Tata Steel's new materials portfolio currently encompasses two major segments: Fibre Reinforced Polymer Composites and Graphene technologies. The FRP division has established itself in various sectors, including automotive, industrial infrastructure, and railways, offering innovative solutions such as street light poles, pressure vessels, and modular toilets. The company has adopted an asset-light approach, leveraging partnerships and collaborations to develop these products.
In the research and development sphere, Tata Steel has made significant investments, employing over 200 researchers and establishing collaborative relationships with 40 institutes. The company has created dedicated research centers in Chennai and Bengaluru, partnering with prestigious institutions like IIT Madras and the Centre for Nano and Soft Matter Sciences. These facilities focus on advancing material research and exploring new applications.
The Graphene initiative, positioned as a future-focused material that is 300 times stronger than steel, has shown promise in various applications across wearables, medical devices, and industrial uses. However, like other new material ventures, it will undergo scrutiny during the review process to determine its scalability and strategic fit within Tata Steel's broader portfolio.
The company's research infrastructure has been substantially strengthened to support these initiatives. The establishment of Tata Steel Advanced Materials Research Centres represents a significant commitment to innovation and technological advancement. These centers serve as hubs for collaboration between industry experts and academic researchers, working to expand the company's advanced materials capabilities.
This strategic review reflects Tata Steel's pragmatic approach to business development, balancing innovation with practical scalability. While the company maintains its commitment to research and development, it recognizes the need to concentrate resources on ventures that can achieve significant scale and contribute meaningfully to its overall business objectives.
