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TATA's Hide This Company From Everyone 馃敟 | Hidden Gem Of TATA | Business Case Study - YouTube
Channel: Aditya Saini
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Think that you are sitting by the seaside one day,
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And the salty water of the sea comes at your feet
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and then you have an idea
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Why don't I take out this salt and sell it all over India?
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You need a small manufacturing unit to do this.
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But, regret
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Due to lack of funds for expansion
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You have to sell your manufacturing unit to a businessman
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but after a few years
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to the same company that you sold
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That businessman turns It Into Asia's Largest Salt Manufacturing company
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And you're still part of that company
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This is the story of TATA Chemicals
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The Tata group company that no one talks about
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and people don't even know that
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This company has paid all its investors in the last 10 years
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Has given returns of more than 400%
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And interestingly,
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Inside this Tata group company
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Some such secrets of Tata group are hidden
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what most people don't even know that
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The question is, what is that secret?
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And what is the Tata group doing inside out?
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What most people don't even know
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And most importantly,
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what powerful business lessons is that
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That we learned from this case study
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We can implement in our life and our investment journey
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This video is brought to you by smallcase,
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Which helps you invest in futuristic ideas
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which we will talk about next
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A story begins in 1920
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When Mr. Kapil Dev Vakil, a chemical engineer
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After finishing his studies from England, he comes back to Gujarat.
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India's biggest coastline is in Gujarat,
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Looking at the thing,
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He explores the possibilities of extracting salt from the sea.
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They also needed a lot of money to do this thing
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And also permission for manufacturing, Some time passes
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After which the Prince Sayaji Rao Gaekwod of Barodo gives him permission to allow this thing
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and finally in 1927,
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Vakil, Opens the okha Salt Works
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10 years pass, now it was time to expand the unit
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But, regret
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Vakil did not have enough money to expand this business unit
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And as a result,
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He goes to meet a business man in 1939
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A deal happens and their company is sold
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And Vakil is appointed as a director within the same company
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But do you know who was that business man?
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Well he was none other than Mr. J.R.D. TATA
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Many difficulties came and passed everything
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And in just a few years, by 1944,
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the company had reached a production cap. of 80 tons per day.
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and who knew,
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That Tata Chemicals used to produce only 80 tons per day in the coming years.
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It would reach a capacity of over 400 tons by 1962
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And today Tata Chemicals manufactures more than 25,000 tons
salts every day.
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Which makes it the largest salt manufacture in Asia
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But that's just one side of the story:
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Today Tata Chemicals
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And infact many Tata companies are doing something like this.
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what most people don't even know
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And this thing is very powerful too:
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But at the same time this thing is also very risky:
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But the question is: what is that thing after all?
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To understand this,
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it is very important for you to understand these 3 things about Tata Chemicals.
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No.1,
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How Tata Chemicals' Manufacturing Structure Works
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No.2,
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What is so unique about Tata Chemicals' revenue model!!
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Which gives them a very powerful strategic advantage
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And No.3, and most importantly,
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How does the Tata Chemicals portfolio model work?
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So first of all,
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what is the manufacturing model of Tata Chemicals
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And how it works?
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In simple words,
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Tata Chemicals is completely based on chemistry
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And Tata Chemicals works on these 2 verticals of chemistry
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No.1, Basic Chemistry
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And, No.2, Specialty Chemistry
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Under Basic Chemistry, Tata Chemicals mainly operates under these 4 things
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No.1, Salt Manufacturing
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Till date we all feel that
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we all buy Tata salt from the market.
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That Tata Consumer Goods Ltd. This one company makes
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but it's not like that,
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Tata Consumer Goods Ltd. is a subsidiary of Tata Chemicals.
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through the subsidiary
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Tata Chemicals All its salt products
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And brings the rest of the edible products into the market
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Another thing is Soda Ash
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Which is a raw material: a lot of things to manufacture
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Like Glass, Detergent, Pharmaceuticals, Bakery items
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Soda ash is used in all these things.
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The third thing is halogens,
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which contains chemicals such as chlorine and bromine
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That's a lot of Industries also use it.
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And apart from this,
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These chemicals are also used in many science labs.
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And Fourth: Salt Products
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Inside which Tata Chemicals deals in these 3 different types of salt products.
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No.1, Livestock Salt
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No.2, Industrial Salt
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And No.3, Gypsum
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This is the basic chemistry vertical of Tata Chemicals
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But which is the specialty chemical vertical of Tata Chemicals
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He is actually responsible in controlling our entire economy in some way.
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I'll tell you how,
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Tata Chemical's specialty vertical mainly controls these 2 things
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No.1, Nutrition Science
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And No.2, Crop Protection
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And both of those who are clients of these verticals,
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Those are Businesses To Business Clients
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That means a lot of businesses
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From crop protection to nutrition science,
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Tata Chemicals is highly dependent on both.
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And very few people know this
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Not only in our country but also in world wide many of these industries
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Like Performance Tyres, Cosmetics, Pharmaceuticals,
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Oralcare, Paint, Rubber
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Only the raw material of Tata Chemicals goes inside these industries
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But what is most important for our country,
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That is crop protection.
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Rallis India Limited is a company engaged in crop protection.
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The company which is controlled by Tata Chemicals over 50% of its stack
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Rallis India Limited Inside the entire country
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Responsible for crop protection within more than 80% of districts
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So by any chance,
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If anything bad happens to this company
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So whole India will be in danger
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and along with that,
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At present, Tata Chemicals has 2 such powerful weapons,
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Which is not with any other chemical company
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The first weapon is Soda Ash.
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I know what you're thinking
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Why Soda Ash Is So Important,
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what happens to that?
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Well, Look at this very very carefully
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Glass, Detergent, Soap, Food,
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Cosmetics and Pharmaceuticals
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None of these things can be made without soda ash
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Because inside the manufacturing of all these things
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Soda ash is a primary raw material
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And moreover,
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All the companies in this world that manufactures this these things,
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It is highly dependent on Tata Chemicals in some way or the other
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And the second and most powerful weapon of Tata Chemicals is
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Manufacturing of Lithium ion cell
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Which will be inside making it the batterries of the electric vehicle
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Give a small idea
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Tata group is a multi dimensional conglomerate
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So you don't know which Tata group company will perform well
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No one knows whether Tata Motors will grow or Tata Steel
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Will Tata Chemicals Grow or Tata Consumer Goods?
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by taking advantage of the overall growth of Tata Group
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if you want to grow your investment
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So you can invest in the smallcase of House of Tata
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What an idea!
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In this way,
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you get the opportunity to invest in many such futuristic ideas on the small case.
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where you make your investment,
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You can grow your investment
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even if it is within the banking sector,
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or else rapidly growing electric mobility sector
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By investing your money in Futuristic Ideas,
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if you also want to grow your investment
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Then you can also try on smallcase
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Link of smallcase,
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I will put in the description and comment box for all of you guys
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Soda Ash or Lithium Ion Cell manufacturing
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These 2 very powerful weapons from Tata Chemicals
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Gives such a strategic advantage to Tata Chemicals
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At this time no other business group has that strategic advantage
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The name of the advantage is EV Horizontal Integration
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To understand this revolutionary EV horizontal integration of the Tata Group
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It is very important for us to understand these 2 things
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No.1, what is the revenue model of Tata Chemicals?
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& No.2, How Tata Chemicals Portfolio Model works?
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So if we look at the revenue models of Tata Chemicals
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So the majority revenue of Tata Chemicals comes from these 2 things
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No.1, Soda Ash
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& No.2, Crop Protection
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More than 50% of Tata Chemicals' revenue
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comes from soda ash only
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And 18.5% of Tata Chemicals' revenue
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comes from crop protection
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which she controls through the Rallis India business
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So in simple words,
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As the business of Rallis Crop Protection India will flourish
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By the way, the worth of Tata Chemicals will also go up.
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But the soda ash business of Tata Chemicals
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That gives Tata Chemicals such a strategic advantage
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Which is not currently with any other chemical business
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So now look at this very very carefully
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Tata Chemicals controls the supply of more than 70% of the soda ash produced in the world
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Moreover,
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All the soda ash manufacturing plants of Tata Chemicals
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source their raw material only through natural sources.
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I know what you're thinking
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How is this thing possible after all?
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The answer to this thing is hidden,
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inside the Tata Chemicals plant location.
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If we look carefully at the location of the International Plant of Tata Chemicals
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The US Plant of Tata Chemicals is inside the Wyoming
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Where are the world's largest deposits of Trona.
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Same goes with kenya,
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The Kenya plant of Tata Chemicals is near Magadi Lake.
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And Magadi Lake is a regenerating lake
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But if we talk about Tata Chemicals UK's plant,
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Which is the plant of Tata Chemicals in UK,
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There the availability of natural salt is already very high.
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And if we come back to India,
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The Mithapur plant of Tata Chemicals inside India,
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That plant does all the production of only on solar heat.
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Because that plant is above such a location
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Where there is so much light that the whole plant can run on solar energy only.
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If we understand this thing very deeply
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So the plants of Tata Chemicals,
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Have such a location strategic advantage.
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Due to which the cost of their raw material is very less.
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And moreover,
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Because their plants are set in such places
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where natural resources and reserves are very much present.
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Due to this, today Tata Chemicals
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Controls the manufacturing of More than 70% of the world's soda ash
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And most importantly, Soda ash is one such element,
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Which is use in most of the industries as a raw material.
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Because of that,
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Most of the companies depend on Tata Chemicals for their raw material
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But there is one more thing that makes Tata Chemicals very powerful.
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And that is the portfolio model of Tata Chemicals
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Tata Sons, the holding company of Tata Group
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If we analyze its holding patterns very closely,
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So 2.5% of that comes from Tata Chemicals
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That is, the net worth of Tata Sons is 20,000 crores,
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Comes only and only from Tata Chemicals Company
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But that's a very interesting thing,
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A flagship company of Tata Sons
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Tata Chemicals Zone 1.56% stack of Titan Industries
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So, intern
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If Titan Industry Performs Very Well
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The worth of Tata Chemicals will increase automatically
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That is, due to the strong holding of Tata Chemicals,
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Not only does Titan Industries benefit,
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But the overall Tata Group also has a huge advantage.
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Because Titan Industries will perform well once
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But the ripple effect it has will be visible on Tata Chemicals
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As well as on the overall group
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But still,
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The Tata Group is currently using Tata Chemicals
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To strengthen something
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That will take the Tata Group to the next level.
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And that is EV Horizontal Integration
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In very simple words,
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Tata Groups is building a complete ecosystem of Electric Vehicles
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So, now look at this very very carefully
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These Are the 3 Major Important Players in the EV Ecosystem of Tata Groups
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No.1, Tata Chemicals
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Whose job is to manufacture lithium ion cells
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No.2, Tata Motors
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Tata Motors is currently working on EV vehicles
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But EV vehicles runs on EV batteries
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And the most important element for making EV batteries is
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Lithium Ion cells.
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Which will be made by Tata Chemicals only
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And 3rd and most importantly,
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Tata power
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Which is currently setting up Tata's ev charging infrastructure.
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And even in today's date,
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These people have setup their infrastructure in more than 40 cities.
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Due to which there is a very high chance that in the coming time,
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Tata Group may do this thing.
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Since Tata Group already owns have their Tata Chemicals
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So it is easier for them to manufacture the EV batteries
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Because Lithium Ion cells are already making their Tata Chemicals
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Due to which the prices of their EV's is
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Their electric vehicles can be launched inside the market very cheaply.
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Due to which
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Most of the people in the country will be able to afford them.
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And then Tata Group,
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Will earn a premium through its charging infrastructure
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To all the people to whom they sold the vehicles.
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Through this complete horizontal integration,
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Tata Group is creating such an ecosystem.
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Inside which there is an entry barrier in the electronics vehicle,
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it will be reduced for the people.
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The thing that will enable a lot of people to afford EV vehicles
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And by charging a very high premium through its charging stations
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Tata Group will also be able to maintain profitability
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Even if,
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He is selling all his electronic vehicles at very cheap price.
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Because of that,
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They will not only have reoccuring revenue
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But the overall growth of Tata Group will also reach a next level.
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Who brings us to the most important thing
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What are the powerful business lessons
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that we can learn from this case study and apply in our business and investment journey?
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First lesson,
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Don't just look at what company is doing,
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But also look at how they are doing it.
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Just focusing on what the company is doing doesn't matter
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Rather it is very important to know how she is doing that thing.
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If we look at the business of Tata Chemicals from above
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We will only see that this company only manufactures.
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Soda, Ash and Salt.
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But how is he doing this thing,
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That thing provides such a strategic advantage to these companies
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Due to which today most of the companies in this world
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are dependent on Tata Chemicals for soda ash.
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So as investors
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Pay attention not only to the work of the company
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But also to the way they work
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Due to which you can take such a smart investment decision
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which can earn you very good returns in the coming time.
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2nd lesson,
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Understand the group Dynamics
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TATA, Birla, Ambani, Adani
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In all these business houses of our country
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There is one thing common
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and that thing is Business Integration.
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If only talk about the business integration of Adani Group
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So he is so powerful
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That he can change the future of the country in the coming time
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If you are investing in which business group or any company,
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Then not only that company but the rest of the companies in that business group.
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And it is very important to analyze the linkage between that company as well.
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Because maybe that company as an Individual is not performing very well
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But the rest of the companies inside the group.
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that company can have such a strong linkage
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Which, in the coming time, will bring not only that company
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but also the entire group to a next level.
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Remember that i told you
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The integration of Adani Group's business is so powerful
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that it can change the entire country in the coming time.
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But do you know that what is special inside the business of Adani Group
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which is not visible to most of the people today?
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If you want to know this, then definitely watch this right video.
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