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Mittal steel

The making of the world s largest steel company

ByAPRA BISHT BINDIA CHANDEL JASMEEN KAUR YASHUPRIYA THAKUR

INTRODUCTION
Mittal Steel Company is one of the world's largest steel producers by volume, and also one of the largests in turnover. The company is now part of ArcelorMittal CEO Lakshmi Mittal s family owned 88% of the company. Mittal Steel was based in Rotterdam but, managed from London by Mittal and his son Aditya .

Mittal pioneered the development of integrated mini-mills and the use of Direct Reduced Iron or DRI as a scrap substitute for steelmaking and led the consolidation process of the global steel industry.

MAJOR ACQUISTIONS
y Group started spreading its activities across the globe in 1989 when it acquired an ailing plant in Trinidad and Tobago. Tobago. Bought up a network of steel producers in former communist countries including Kazakhstan, Romania and Ukraine. In 2004 Ispat International N.V. acquired LNM Holdings N.V. (both were already controlled by Lakshmi Mittal) and merged with International Steel GroupInc. (the remnants of Bethlehem Steel Republic Steel and LTV Steel). y On 25 June 2006, Mittal Steel decided to merge with Arcelor. The merger has been successfully approved by shareholders and directors of Arcelor making L.N. Mittal the largest steel maker in the world.

CURRENT STATUS
y World s largest and most global steel company with shipment of 49.2 million tones and revenue of over $28.1 billion in 2005 49. 28. and net income of $3.4 billion y No. 1 high quality steel producer with crude steel capacity No. with more than 70 million tons per annum y Own steel making facilities in 16 countries spanning 4 continents

CONT
y Employees 224000 people spanning 49 different nationalities y The company was registered in netherlands and has its headquaters in london. y Is also traded on New York stock exchange.

THE EXTRA ORDINARY LIFE OF MITTAL


y Indian born British steel tycoon y He is the chairman and chief executive officer of Arcelor Mittal, the world s largest steelmaking company. y Born on June 15th 1950 in Rajasthan y Mittal is the second richest man in Europe and is presently the sixth richest in the world with a personal wealth of US$ 31.1 billion

CONT ..
y Finished his bachelors degree in business and accounting and in early 70 s began his early career in his fathers steel firm. firm. y In 1976 , when the family founded its own steel business , he set out to establish its international division , beginning with the buying of rundown plant in indonesia. indonesia. y In 1976 , due to differences with his father and brothers , he branched out of his LNM group and has been responsible for the development of his business ever since. since.

AWARDS
y He was awarded Steelmaker of the Year in 1996 by New Steel in the USA y The Willy Korf Steel Vision Award in June 1998 y Mittal was awarded Fortune magazines Businessman of the Year 2004

European

y In March 2005, Forbes named him the third richest man 2005, in the world and the richest non-American, with a wealth nonof $25 billion. billion.

Other activities
Mittal is an active philanthropist and a member of a few trusts. He is an independent director of Goldman Sachs member of the Board of Directors of European Aeronautic Defence and Space Company Mittal is a member of the Foreign Investment Council in Kazakhstan, the International Investment Council in South Africa, the World Economic Forums International Business Council and the International Iron and Steel Institutes Executive Committee. He is a Director of ICICI Bank Limited and is on the Advisory Board of the Kellogg School of Management in the U.S.

GROWING PAINS


In the year 2001, decline in sales was noticed in its majority divisions. Company took the decision to close its Irish operations. Because of the certain restrictions that were put on them EU. With the help of the Britain s PM Mittal did the acquisition of a steel plant in Romania. For this Mittal had donated $176000 to Blair s governing party.

CONTD


In 2004, Ispat International merged with LNM holdings to form Mittal Steel. The new company immediately bought International Steel, and merged with Arcelor the next year to form ArcelorMittal.

Mittal Steel Growth Timeline




 

2005: Acquisition of a stake in Hunan Valin > ISG Acquisition completed > Mittal Steel Europe created > Mittal Steel makes Fortune 500 list of top companies> MDA with Liberian government > Acquisition of Kryvorizhstal > MoU with State of Jharkhand, India > Acquisition of Stelco subsidiaries > Stake lifted in Mittal Steel Zenica 2004: Acquisition of Polski Huty Stali > Acquisition of BH Steel > Acquisition of Macedonian facilities from Balkan Steel > Creation of Mittal Steel and proposed acquisition of International Steel > 2003: Acquisition of Nova Hut 2002: Business assistance agreement signed with Iscor

Mittal Steel Growth Timeline


    

  

2001: Acquisition of ALFASID > Acquisition of Sidex 1999: Acquisition of Unimtal 1998: Acquisition of Inland Steel Company 1997: Ispat International NV goes public 1995: Acquisition of Hamburger Stahlwerke > Ispat International Ltd. and Ispat Shipping formed > Acquisition of Karmet 1994: Acquisition of Sidbec-Dosco 1992: Acquisition of Sibalsa 1989: Acquisition of Iron & Steel Company of Trinidad & Tobago

Mittal s Approach:

According to Mittal.. Emerged ,emerging or submerging markets, they all represent opportunity to me. What he looked for in an acquisition ??


They only buy those companies that fits in their growth strategy and couldn t become low cost producer.

Mittal was able take the advantage of increasing desire of countries to rid themselves of inefficient steel-producing giants . Mittal was known as an incredible dealmaker. But he shunned this by saying I am a steelmaker, not a deal maker , if I ve decided something, I get it done. I ve an aggressive approach, but I believe I m a good negotiator

The key steps in turning around each plant were lowering costs, cutting excess staff and spending on a new technology. In building capable management, Mittal relied on strong pool of resources of highly trained engineers in India.

Recent highlights


January 2011


ArcelorMittal's stainless and specialty steels business is spun-off into Aperam, a newly created and publicly listed company headquartered in Luxembourg. Nunavut Iron Ore Acquisition Inc. and ArcelorMittal have acquired 93% of the shares of Baffinland Iron Mines Corporation. ArcelorMittal signs agreements to invest new capital resulting in a 40% shareholding in leading Thai steel producer G Steel.

February 2011


March 2011


The creation of the world s largest steel company


on october 26,2004 mittal overtook arcelor,with the three way merger of ispat international ,LNM holdings and ISG. The entire merger was estimated to be $17.8 billion. The combined company with LNM holdings had a market capitalization of $21 billion .

With the acquisition of ISG the combined companhy got the sales of $31.5 billion. Management of combined company lakshmi mittal CEO. Aditya mittal-COO. Wilbur Rose-Board member. ISG had been formed in 2002 by financer wilbur rose. They were happy with merger with mittal steel.

The combination with ispat s US operations give mittal control over 20% of the U.S. Steel market. New company was estimated to control about 40% of the market.

The worldwide steel industry


Production 960 million tonnes /year. demand for steel grow by 6.2 % in 2004 and 5% in 2005. On the supply side europe , japan and the U.S. Controlled about 50% of the market. In U.S.,the prices of steel were 20 to 30 % more than the european and japanese markets

According to CEO of Arcelor, the merger supports our long term scenario for an industry which,within 5 to 10 years will be dynamically driven by 5 or 6 global companies .

conclusion
Mittal industries had transformed the steel industry from local company to export oriented, technologically advanced company. According to mittals, consolidation is essential for the future .

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