The world’s largest steel enterprise, Mittal Steel was established in 1976 by Lakshmi Narayan Mittal (1950–) in Kolkata, India. The richest person in Europe and fourth-richest in the world with net worth of $32 billion, the London-based Indian steel magnate Mittal had brought Mittal Steel to the forefront by his sound judgment and takeovers. A commerce graduate, Mittal joined the family steel business and was put in charge of the international division.
In 1976 he established Ispat Indo in Indonesia. Mittal went on an acquisition spree of steel plants around the world—Iron and Steel Company of Trinidad and Tobago (1989); Sicartsa, Mexico (1992); Sibalsa, Mexico (1992); Sidbec-Dosco, Canada (1994); and Hamburger Stahlwerke, Germany (1995). His business skill was evident in turning losing steel factories into profitable ones. Mittal Steel never hesitated to take risks. The government-owned Iscott steel plant of Trinidad and Tobago, which was incurring a loss of $1 million, doubled its output after Mittal Steel’s takeover. Within a year, the state-owned steel plant of Kazakhstan began to produce double in 1996.
Mittal Steel moved its headquarters from Indonesia to London in 1995, and Kensington Palace Gardens became Mittal’s residence. The capacity of Mittal Steel group had reached 11.2 million tons by this time. Mittal’s Ispat International Ltd. was listed on the Amsterdam and New York stock exchanges in 1997. Before the end of the 20th century, the juggernaut of Mittal Steel marched ahead to acquire Inland Steel Company and Unimetal.
In the 21st century, its international expansion included takeover of Sidex steel plant (2001), Nowa Huta (2003), Polski Huty Stali (2004), and BH Steel (2004). Mittal’s relationship with British prime minister Tony Blair (1953–) and the Labour Party came under media scrutiny. It was reported that Blair had interceded on behalf of Mittal Steel for the Sidex steel plant in Romania. Mittal had donated heavily to the Labour Party. Mittal Steel came into being through a merger of Ispat International and LNM (Lakshmi N. Mittal) holdings in 2004. Next year, the International Steel Group, Inc. (ISG), Ohio, merged with Mittal Steel, which made the latter the world’s number one steel producer with a net worth of about $22 billion. In 2005 there was the acquisition of Kryvorizhstal steel plant in Ukraine for $4.8 billion. In his home country India, Mittal Steel had invested $9 billion in 2005 for constructing a steel plant in Jharkhand Province and the next year announced a plan to build a 12-million-ton-capacity steel plant in Orissa. The most controversial merger was with the European steel giant Arcelor SA, which dominated newspaper headlines for some time.
In 2006 Mittal Steel purchased Arcelor for $33 billion, which made it the world’s largest 100-millionton steel company with 10 percent of the total world steel output. Mittal became the president and chief executive officer (CEO) with a 43.6 percent stake. Arcelor Mittal’s assets were spread among countries in Asia, Africa, Europe, and the Americas. Apart from the mainstream steel industry, Mittal Steel had diversified into shipping, coal, and power. It had also spent $980 million for a 50 percent stake in Caspian Investment Resources, the oil firm of Kazakhstan.
Mittal Steel has become the world’s largest steel company with 320,000 employees in more than 60 countries and revenue of about $30 billion. It possesses steelmaking facilities in 27 nations spread over four continents. Mittal and his son, the Wharton-trained Aditya, have remained the guiding spirits behind Mittal Steel’s success, and they have put the company on the world map.
Buying up unprofitable public-sector steel plants and making them profitable has contributed considerably to the growth of Mittal Steel. The successive acquisition of steel enterprises from many parts of the world has made it a highly profitable enterprise. The steel production technique of Mittal Steel has put it far ahead of other steel companies. It has introduced direct reduced iron (DRI) as a source of raw material. The company has not used costly scrap materials for obtaining iron. With emphasis on research and development, Mittal Steel has not remained complacent in spite of its growing success. The future of Mittal Steel seems bright.
- Tim Bouquet and Byron Ousey, Cold Steel: The Multi-Billion-Dollar Battle for a Global Empire (Key Porter Books, 2009);
- Economist, “Face Value: Lakshmi Mittal, Global Man of Steel,” Economist (v.386/8567, 2008);
- Economist, “Mittalic Magic,” Economist (v.386/8567, 2008);
- “Mittal Steel Set to Become World’s Largest Steel Company,” Welding Journal (v.83/2, 2004);
- Mittal Steel, www.mittalsteel.com (cited March 2009);
- Bommakanti Rajaiah, Returns to Investment and Efficiency in Public Enterprises in India (Mittal Publications, 1989);
- Nelson D. Schwartz and Doris Burke, “Emperor of Steel—After a Brutal Takeover, Billionaire Lakshmi Mittal Stands Atop the Steel Industry. So Why Is He Still an Outsider?” Fortune (v.154/2, 2006);
- Richard Tomlinson, “Man of Steel: Lakshmi Mittal, the London-Based Steel Tycoon, Is Turning Former Communist Rustbuckets Into Pots of Gold,” Fortune (v.148/4,2003).
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