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Tata, India's biggest brand: Tatasons

Tatasons feels that there is a "lot of future" for the group in areas like steel and soda ash, where it has made global acquisitions.

india Updated: Jan 25, 2006 13:27 IST

In the midst of an investment drive, Tatasons on Tuesday claimed that the brand value of group companies and products has shot up to Rs 24,396 crore and said over Rs 1,80,000 crore investment was being envisaged in the next 8-10 years.

"Not many have undertaken the brand valuation exercise but I think we are the biggest (brand) in India. We are head and shoulders above anybody," R Gopalakrishnan, Director Tatasons, told reporters on Tuesday morning.

Listing telecommunication, insurance and retail as three new areas for substantial investment, he admitted that the combined investment of the group companies could be about Rs 1,80,000 crore. He, however, did not give details on it.

Tatasons, which takes a brand equity and promotion fees from the listed group companies for building up brand Tata, feels that there is a "lot of future" for the group in areas like steel and soda ash, where it has made global acquisitions.

Making a presentation for media persons during an informal discussion, Gopalakrishnan said the brand valuation exercise was being taken since 2001 twice a year and Tatas were way ahead of their peers in various aspects and the same was reflected by group Chairman Ratan Tata's new year message to employee in which he said that "be bold... Take courage... Go out and do things."

Conceding that till recently Tatas had an image of "old people", he said the holding company as well as group companies had undertaken an exercise to connect with the younger generation.

Gopalakrishnan said that during the years 2001-03, the perception about Tatas was not as good, may be on account of "performance, Tata Finance (Pandse episode), Tata Motors (which posted losses) and Indica (which was not received very well by the market).

"At that time we thought the report was not correct," he said in a lighter vein, but added that the group came in for severe criticism on account of Tata Finance.

However, after a lot of soul searching the path forward was determined and each of the group companies was being encouraged to make its own plans. Besides, the group exited from lot of non-core areas including cement, cosmetics and pharma in the recent years.

The restructuring exercise and the measures taken to cut costs also helped to give better performance perception and all this collectively pushed up the brand value of the group companies.

"As much as Rs 4,000-5,000 crore cost was cut down in last five years. Tata Steels and Tata Motors alone cut down expenses by up to Rs 3,000 crore," he said, adding that this was good on an average turnover of about Rs 30,000 crore and a profit of Rs 6,000-7,000 crore.

Out of the total valuation, as much as Rs 11,629 was accounted for by the name Tata itself where the seven companies and products were bearing the group's brand name. The remaining valuation or Rs 12,767 crore was for "Tatas with sub brands."

Gopalakrishnan said that four independent brands of the group -- Titan, Voltas, Taitlen and Trent -- were valued at Rs 1,500 crore despite not having a Tata name either for the company or the product.

The Brand exercise by Tatas assumes importance in the wake of the group's increasing business-cum-acquisition spree in the international market with the Tatasons executive saying that "we are building Brand India with Brand Tata."

Substantiating, he said that South Africa was an example of this process where the South African government was sponsoring an advertisement on their national TV about Tata Steel as an Indian Company that was partnering the country in its progress.

First Published: Jan 24, 2006 16:09 IST