Improving process efficiency & convenience through E - mode

Tata Steel, established in 1907 is Asia's first and India's largest integrated private sector steel producer is the world's 6th largest steel producer. With the recent acquisition of Corus, the combined enterprise has a total crude steel production capacity of around 30 million tonnes and over 82,000 employees across four continents. Tata Steel has operations in 27 countries and is the second most globally diversified steel group.

The objective of launching channel finance - a short term revolving credit facility in Tata Steel was 100 percent cash sales to the distributors. This has successfully materialized with transactions growing from Rs.760 crores in Fy04 to Rs.2,450 crores in Fy08. The scheme has been rolled out to more than 140 Distributors based on their risk profile & has benefited Tata Steel in many ways viz.

Value Proposition to Tata Steel

• 100% secured receivables
• 100% timely payment
• Increased buying power of the distributors
• Faster inventory turnover for the company due to complete automation i.e. fully automated process from SO to MR generation

The above graph is just a pictorial depiction of the continual & sustainable increase in channel Finance as a proportion of Sale towards regular Distribution Channel of Tata Steel. Credit Sales of Tata Steel have steadily decreased over the period from Fiscal 02 to Fiscal 08.

Value Proposition to Distributors

• Competitive cost of Funds
• No Security / Collateral Attached
• Hassle free documentation
• Over & above existing line of Credit
• Single window MIS & Support Systems

Value Proposition to Partner Banks

• Minimum Risk of Default / NPA
• Assurance of Bulk Business