NEW DELHI--The Tata group will invest more than 450 billion
rupees ($8.3 billion) in the next two years in India and expand
globally, especially in the emerging markets of Asia, Africa and
Latin America, the steel-to-software conglomerate's new chairman
said.
The investment will add to the 500 billion rupees spent by Tata
companies in India in the past three years, Cyrus Mistry said.
The plan comes as a stamp of approval for local and foreign
investors about the continued attractiveness of India despite a
current economic slowdown and weak consumer sentiment.
It also heralds a sign of optimism after the previous chairman,
Ratan Tata, cautioned last week in his farewell message to the
group's employees that the difficult economic environment will
likely continue for most of 2013 and will need a dramatic cut in
costs.
India's economic captivity, which remained weak for most of
2012, is showing signs of a pick up. Investor sentiment toward the
country has improved after a raft of pro-business measures from the
government since mid-September, including increasing the limit on
foreign investment in sectors such as retail, civil aviation and
broadcasting.
Manufacturing activity has also rebound in recent months. While,
government data showed an 8.2% increase in October industrial
output--its strongest pace in 16 months, an HSBC survey showed a
sharp expansion in manufacturing activity in November and
December.
The government has promised more policy steps and the central
bank has indicated that it could reduce interest rates starting
this quarter to speed up economic activity.
"The recent emphasis on policy clarity and a renewed thrust to
economic reforms by the Government of India is encouraging," Mr.
Mistry said. "With a sustained focus on policy stability and
implementation, I believe that India would continue to be an
attractive investment destination."
Mr. Mistry, 44 years old, took over from Mr. Tata last week as
the chairman of the Tata group, which owns more than 100 companies
worldwide, including luxury-car maker Jaguar Land Rover PLC.
The group is credited with developing the world's cheapest
car--the Nano--and expanding its presence worldwide through
acquisitions of companies such as Jaguar Land Rover, steel maker
Corus Group PLC and Tetley Tea in the U.K., and Singapore-based
NatSteel during Mr. Tata's tenure.
The group's interests are spread across sectors such as salt,
chemicals, real estate and hospitality and it got 58% of its
revenue from foreign operations in the financial year ended March
31, 2012. It has operations in more than 80 countries and employs
over 450,000 people worldwide.
Mr. Mistry is the son of a construction baron who is the largest
shareholder in Tata Sons, the holding company of the Tata
group.
"Apart from India, we will be required to work to both deepen
and widen our global engagement with an emphasis on emerging
markets in Asia, Africa and parts of Latin America, adding to our
existing presence in Europe and America," Mr. Mistry said in his
first letter as chairman to the group's employees. The Wall Street
Journal has seen a copy of the letter.
"Of course, each company's path to globalization will be
different, with differing approaches to the spreading of risk,
acquisition of technology, access to talent, and investment in
long-term growth markets," he said.
Write to Santanu Choudhury at santanu.choudhury@dowjones.com
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