Mumbai, Dec 28 (IANS) The difficult economic environment that has strained the performance of corporate India this year is likely to persist in much of 2013 and companies have to reinvent themselves in terms of business processes, outgoing chairman of the $100-billion Tata Group Ratan Tata said Friday.
In his farewell letter to all Group employees, Tata, who stepped down from the top job Friday, said: "The difficult economic environment that we face in the current year will most likely continue through most of the next year. We will probably see continued constraints in consumer demand, over-capacity and increased competition from imports."
"There will therefore be great pressure on our companies to reinvent themselves in terms of business processes and to dramatically reduce costs, to be more aggressive in the market place and to widen our product range to better address consumer demands."
Tata Group companies, he said, would be required to contain borrowings to improve their balance sheets.
"We will also need to contain our borrowings and work hard to retain our margins. This environment would once again call on you for your support, your commitment and your dedication to achieve success in these somewhat difficult times," Tata said in the letter.
Referring to the slowdown in the Indian economy, Tata said the seemingly gloomy picture would end soon.
In 2012, Indian economy suffered the worst slowdown in almost a decade, with the country's GDP growth hovering around 5.5 percent.
India's gross domestic product (GDP) growth slumped to nine-year low of 5.3 percent in January-March 2012 quarter. It improved marginally to 5.5 percent in April-June period and again fell to 5.3 percent in the third quarter of the current calender year.
"I feel confident that the robust growth that India has shown over the last several years will be re-established and the strong fundamentals in the country will result in India once again taking its place as one of the economic success stories of the region," he said.
"The Tata Group will undoubtedly play an important role in the continued development of the country, providing leadership in various industrial segments in which they operate and living by the value systems and ethical standards on which our Group was founded."
In his letter, Tata, who turned 75 Friday, also listed the achievements over the last two decades.
He pointed out that the Group's revenue has increased 20 times in the last 20 years. "We today are $100 billion Group in revenues. Over the past 20 years, our revenues have grown about 20 times and today 58 percent come from overseas operations."
"Our brand has emerged as the 45th global and the number one Indian brand. Our products and services are present in 85 countries. We therefore have every reason to feel proud and feel confident in facing the challenges ahead," he said.
Tata urged employees to extend their full support to Cyrus Mistry, who takes over the top job in the Group Saturday.
"The future growth of the Group will be led in the coming years by Cyrus Mistry. I am sure that he will receive from you the same support, the same commitment and the same understanding that I have enjoyed over the years. Tatas are a Group where I feel proud to have belonged and proud to have been associated through the years. I wish the Group, Cyrus Mistry and each of you great success in the years ahead. I hope the Group grows and shines in the coming years."
Mistry, 44, who was unanimously named Tata's successor a year ago by the board of Tata Sons, the holding company, will take over the reins as the sixth chairman of the group, which was established in 1868 by Jamsetji Nusserwanji Tata.
Tata will remain as the Group's chairman emeritus.