Risks and Opportunities

Recession Risk

Global economic slowdown impacting demand and pricing

Mitigation Plans

• Maintaining cost focus: variable and fixed costs, across all entities
• Protect wallet share with strategic customers. Tie-up with customers for volume and price contracts
• Keep track of imports (volume and price) and adjust sales strategy appropriately
• Scale-up export markets particularly for US and Kenya and further strengthen distribution network
• Supply chain: Flexibility in supplying from different locations
• Maintain service levels with customers

Associated Opportunities

• Focussed input cost reduction
• Maximise customer engagement
• Optimise domestic sales

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Digitalisation Risk

Embracing digitalisation as a key lever of business growth

Mitigation Plans

• We have a clear digital strategy and roadmap, with regular reviews
• Digital initiatives fall under the following categories:
• Core systems: BPR-led SAP S4 HANA migration is underway along with harmonisation of core systems globally (SAP, CRM, SCM, HRMS)
• Data & Analytics: Data architecture, Data Lake, Digital dashboards for all functions, DATOM a framework adopted to improve data maturity
• Digital Reimagination: Use cases taken under Industry 4.0 platform, Function-wise Digital projects under implementation
• Technology Backbone: Strengthening of technology infrastructure to support the digitalisation initiatives
• The Enterprise Reference Architecture guides IT decision-making and digital solution design, promoting synergy and harmonisation
• The annual Digital Maturity Measurement (DMM) assessment is carried out and actions taken accordingly
• Digital champions – Employees from non-IT background are being trained on Digital technology

Associated Opportunities

• AI, IoT and cloud computing have the potential to alter businesses by optimising processes, automating jobs, and enabling real-time data analysis
• Established a cloud-first strategy to improve infrastructure readiness, scalability, and agility
• Training of non-IT professionals in digital technology to support digital transformation

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Talent Risk

Challenges of attracting and retaining talent in remote manufacturing locations

Mitigation Plans

• Enabling better infrastructure at remote locations
• Enrichment of skills and competencies through training, education assistance programs and sabbatical
• Enriching job through job rotation/ exposure and participation in cross functional teams
• Avenues for cross-functional deputations / growth through internal job postings

Associated Opportunities

• Opportunity to collaborate with universities and build brand value
• Develop future-ready skills/ competencies
• Provide avenues / opportunities for career growth

Cyber Risk

Loss of data & compromised operations resulting from cyber attacks

Mitigation Plans

• Strong governance on data security and access control
• Round-the-clock monitoring and planned improvement of security posture, while preventing, detecting, analysing and responding to cybersecurity issues
• Conducting periodic Vulnerability Assessment and Penetration Testing (VAPT) for critical infrastructure assets and applications, to proactively identify and remediate potential vulnerabilities to enhance security posture
• Solutions implemented to continuously detect and mitigate cyber threats in real-time on end-point devices and preventing unauthorised access to critical resources
• Conducting regular security awareness campaigns and training programmes for employees and building a culture sensitive to cyber security issues
• Complying with government and industry security standards, regulations and audit requirements

Associated Opportunities

• Enhanced Trust and Reputation - Demonstrating a strong commitment to cybersecurity will enhance trust and reputation among customers, partners and stakeholders. Tata Chemicals is prioritising security and protecting sensitive data are more likely to attract and retain customers who value privacy and security
• Regulatory Compliance – By complying with industry best practices, Tata Chemicals will maintain ethical and governmental standards ensuring trust with customers and partners

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Supply Chain Risk

Securing raw materials, energy sources and upgradation of logistics infrastructure to support growth plans

Mitigation Plans

Securing fuels and raw materials

• Captive access to critical raw materials
• Long-term tie-up for consistent and cost-effective supply
• Explore/maximise the use of alternate and sustainable energy source

Readiness of inbound and outbound logistics for expansion plans

• Inbound Logistics improvement
• Private Rail Siding Augmentation
• Automation and mechanisation of Loading / Unloading Operations
• Warehouse storage capacity expansion
• Modernisation of infrastructure
• Addition of gates for safe and smooth traffic movement
• Digitisation with integrated logistics management system to provide visibility, productivity, cost efficiencies for better customer experience

Associated Opportunities

• Increase automation to enable higher capacity volumes and risk mitigation
• Continue to explore new sources of raw materials to meet our sustainability and efficiency goals
• Implementing strategic procurement strategies for renewable energy and feedstock sourcing, ensuring independence from geopolitical constraints
• Localisation of sustainable energy sources

International Debt Risk

Managing international debt and tightening interest rates

Mitigation Plans

• Regular review of the Company’s debt profile
• Re-alignment of the quantum, repayment, pre-payment and need for refinance / working capital bank facilities, in line with annual business plan/overall long-term business plans/strategy of the Company
• Maximise free cash flows to repay debt

Associated Opportunities

• Efficient cash flow management

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Unfunded Pension Risk

Unfunded pension liabilities of overseas subsidiaries (UK Natrium Holdings)

Mitigation Plans

• The pension schemes are closed to further accruals (in the UK)
• Utilising hedging and investment strategies, as appropriate, to manage economic risks including inflation

Associated Opportunities

• Not Applicable

Regulatory and Policy risks

Policy changes which could impact the Company’s operations at large

Mitigation Plans

• Monitoring of compliances through an e-enabled compliance management framework which is used in periodic reporting and reviews at leadership forums; senior leaders’ active participation in various committees and sub committees formed by various bodies to ensure adequate early knowledge and policy advocacy
• Ongoing dialogue, liaison meetings and conversations with regulatory authorities and attendance at seminars, memberships of government and industry bodies, specifically those that take industry voice (thereby Company's voice) to the ministries who finally issue regulations/notifications
• Proactive meetings and dialogues with industry and ministry to put forward views of the Company for consideration in formulating the rules and regulations
• Providing inputs in policy formulation and devising the policies beneficial for the industry and the country at large; understanding upcoming policy changes with an endeavour to mitigate emerging risks
• Keeping track of the draft notifications and proposals, both from the government and/or industry recommendations, as well as risks that may arise by way of a structured process

Associated Opportunities

• To continue best efforts in knowing changes beforehand so that timelines and compliances could be adhered to in advance
• Proactively transitioning to more sustainable regimes, to become future-ready for carbon credit markets

Safety Risk

Ensuring containment of safety hazards (behaviour, workplace, process & product)

Mitigation Plans

• Safety Programme to address cultural shift, employee behaviour, physical workplace standards like mine safety protocols and process safety management through PSRM
• Enterprise Risk Register for key safety risks and assigned ownership for implementing the mitigation plans to progressively reduce the risk. Senior leadership and the Risk Management Committee conduct periodic reviews of these risks
• The Emergency Preparedness Plan addresses safety risks that could lead to emergencies. On-site and off-site plans are in place for various scenarios where hazard containment is not fully localised. Regular tabletop and field drills ensure preparedness for emergency situations
• Business continuity plans in place to ensure smooth operations during any crisis
• Mitigation plans for key risks are integrated into the annual business plan with dedicated resource allocation. Long-term strategic asset management plan for addressing risks arising from ageing infrastructure and assets
• Established techniques like Job Safety Analysis (JSA), Hazard and Operability Study (HAZOP), Hazard Identification and Risk Analysis (HIRA), What-if analysis and Failure Mode Effect Analysis (FMEA) to identify hazards. Risk control hierarchy is followed to address them
• Regular cross unit audits, external Audits from Customers, competent agencies and statutory authorities to check the effectiveness of controls deployed to minimise the Safety Risk to human being
• The Company transitioned to ISO tankers equipped with GPS for transporting bromine, chlorine and other hazardous chemicals, enhancing both product safety and transportation practices
• In India, Member of Nicer Globe initiative for mitigating transportation-related hazards/incidents

Associated Opportunities

• Driving digital monitoring for identified used cases to enhance compliance to safe procedure
• Further improving Safety culture through emphasising on Felt Leadership programmes at shop floor level
• Further strengthening Contractor Safety Management by implementation of refreshed and updated CSMS
• Developing 'My Safety Centre' for Safety learning and sensitisation