Tata companies need to reinvent themselves, says Ratan Tata in his farewell letter

MUMBAI: As he exits India's leading business conglomerate, Tata group Chairman Ratan Tata today said India's difficult economic environment will most likely continue in the next year but its growth will be re-established after the present 'passing phase'.

Tata, who turned 75 today and retired after half-a-century run in the organisation, 21 years of it as Chairman, also asked his colleagues in a farewell letter to show their "support", "commitment" and "dedication" to achieve success in these somewhat difficult times.

In the letter, Tata, who has been appointed Chairman Emeritus and passes on the baton to 44-year-old Cyrus Mistry, told the employees to live by the "value systems and ethical standards on which our group was founded".

"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," he said.

Tata said there will therefore be great pressure on Tata 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 their product range to better address consumer needs.

"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," he said.

Tata said the seemingly gloomy picture, however, will be a passing phase.

"I feel confident that the robust growth that India has shown over the past 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.