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LN Mittal: The undisputed Sultan of Steel!
Moneycontrol.com | June 26, 2006
L N Mittal left India in the mid-1970s to start his career. Through the next thirty years he went on to become the world's largest steel manufacturer.
The Sultan of steel is signing a deal for yet another steel plant in Jharkhand, thirty years after he left India for Indonesia. He was sent there by his father to shut down the family's ailing steel plant. Instead, young Mittal saw an opportunity and turned the plant around, something that would become a Mittal hallmark in later years.
To prove that this was no fluke, Mittal acquired a 1.3 million tonne, Iscot Steel plant in Trinidad & Tobago, which was losing $1,00,000 a day. One year of Mittal-style management and it was making profits, the LN Mittal legend was born. That move helped him get into America.
The Mexican government seeing the success that Mittal made of Iscot, asked him to take over their ailing steel plants in 1992.
But it was not all that smooth. In 1994 Mittal had differences with his brothers and father, and went on to form his own company.
The following year Mittal made his big-ticket entry into the lucrative European market. He acquired the massive 5 million tonne Kazakh steel plant, Karmet from the government of Kazakhastan.
At that time it was a rundown plant. Mittal brought in new technology and turned it around. Mittal's trademark was to buy old rundown steel mills from governments at throwaway prices and then turn them around. Plants in Romania, the Czech Republic and Poland between 2001 and 2004 followed.
Mittal had in the mean time, listed Ispat International on the New York and Amsterdam Stock Exchanges in 1997. Eight years later Mittal became the world's largest steel maker when he took over the US' largest steel producer - the International Steel Group. He then consolidated all his steel holdings into Mittal Steel.
Mittal Steel is the world's largest steel producer at 70 million tonnes a year, almost double the world's second largest producer - Arcelor. October 2005 saw the first battle between the big two- Mittal and Arcelor, both bid for Ukraine's largest steel mill - Kryvorizhstal in an open televised bid. Mittal beat Arcelor to the 4.8 billion dollar deal, at more than twice what analysts had valued Kryvorizhstal.
Reports suggest that it was this bidding war with Arcelor that gave L N Mittal's son Aditya, the CFO of Mittal Steel, the idea of taking over Arcelor. His reason was that it would eliminate any future messy battles.
Less than three months later, Mittal launched his takeover bid of Arcelor. Along the way there have been many criticisms. Mittal has been accused as a man who worships the bottomline, ruthlessly downsizing the workforces of his newly acquired assets. For example, workers at his plant in Ireland were given just a day's notice when he decided to shut it down.
He has also been accused of buying political influence. In 2001, when Mittal was bidding for a Romanian steel mill, he donated 1,25,000 pounds to Tony Blairs's Labour Party. Just days later, Blair wrote to the Romanian Prime Minister saying his country's chances of joining the European Union would be much better if Mittal Steel was given the plant.
Mittal has grown from strength to strength.
Now, with 10 per cent of the world's notoriously fragmented steel making capacity, he is undoubtedly the Sultan of steel.
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