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Working 'Very Closely' With Lakshmi Mittal on Arcelor's Future Strategy, Says Son Aditya Mittal

The world's largest steelmaker ArcelorMittal barely two months back elevated Aditya to the key position of Group President in addition to his role as Group CFO and CEO, Europe.

PTI

Updated:May 13, 2018, 11:51 PM IST
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Working 'Very Closely' With Lakshmi Mittal on Arcelor's Future Strategy, Says Son Aditya Mittal
File photo of Lakshmi Mittal.
Dunkirk (France): Steel tycoon Lakshmi N Mittal's son Aditya Mittal has said he is working "very closely" with his father to shape up the future direction of ArcelorMittal and looking for strategic global opportunities rather than just expanding for the sake of expansion.

The world's largest steelmaker ArcelorMittal barely two months back elevated Aditya to the key position of Group President in addition to his role as Group CFO and CEO, Europe.

"I work very closely with the chairman and CEO (L N Mittal) on developing the future strategic direction of the group...Our global footprint is important to us but we don't expand for the sake of expansion, we look for strategic opportunities which add value to our current business model and provide exposure to future growth dynamics," Mittal junior told PTI.

Right on his radar at present for expanding global footprint are India, Mexico and Italy, to name a few geographies.

"In the case of India I think the opportunity is clear: steel demand growth is expected to intensify considerably," he said in an interview.

Keen to gain a firm foothold in India after failing to take off any of the announced projects, ArcelorMittal is in the race to acquire debt-laden Essar Steel which is undergoing insolvency proceedings.

On March 2, 2018, ArcelorMittal had signed a joint venture formation agreement with Nippon Steel & Sumitomo Metal Corporation (NSSMC) in relation to its offer to acquire Essar Steel.

The company's subsidiary ArcelorMittal India Private Limited (AMIPL) had submitted a resolution plan for Essar on February 12, 2018 and believes it can leverage its experience in turning around underperforming steel assets as the plant offers strong significant growth and optionality.

"We are also making a big downstream investment in Mexico to satisfy the growing automotive industry," he said.

ArcelorMittal has already announced a major USD 1 billion investment programme at its Mexican operation, which is focussed on building ArcelorMittal Mexico's downstream capabilities, sustaining the competitiveness of its mining operations and modernising its existing asset base.

The programme is designed to enable ArcelorMittal Mexico to meet the anticipated increased demand requirements from domestic customers, realise in full ArcelorMittal Mexico's productive capacity of 5.3 million tonnes and significantly enhance the proportion of higher-value added products in its product mix, in-line with the Company's Action 2020 strategic plan.

Besides Mexico, Mittal said, "We are acquiring Italy's leading steel company because it is complementary to our European business."

Last week, the company said it has received a go-ahead from the European Commission (EC) to acquire Italian steelmaker Ilva.

The approval is a significant milestone in the transaction to acquire loss-making Ilva and represents a major step towards closing the deal, which is now expected to occur as soon as possible, the company has said.

Following completion of the acquisition, ArcelorMittal will fully consolidate Ilva.

It announced on May 11 after declaring financial results that upon completion, ArcelorMittal will immediately commence the industrial turnaround plan, which includes a 2.4 billion euros investment programme.

Detailing acquisition plans, Mittal said, "But our focus is not just on geography it is also on product and process. Over the past five to ten years we have seen higher value steels representing a growing part of our revenues. We have a real competitive advantage here with our steels for the automotive sector and other discerning customers and we are looking to grow further here and expand our market share."

Incidentally, ArcelorMittal supplies autograde steel for every second European car, a company official said.

Mittal said research is top on the ageda of the company for innovative special steel and "that's why we continue to invest heavily in research and development on an annual basis."

Gregory Ludkovsky, vice president head of research and development, Global R&D, said the company has 1,400 full time researchers and spent USD 278 million on research and development in 2017.

The Wharton-educated son of Lakshmi Mittal had joined Mittal Steel in 1997, and was president and CFO of Mittal Steel Company from 2004 to 2006. As CFO, he is said to have played a crucial role in its USD 32 billion merger deal with Arcelor in 2006.

The company has been trying for long to enter India but has not succeeded so far. Over a decade back, it had announced to set up two plants - 12 MTPA each- in Jharkhand and Odisha.

ArcelorMittal has presence in 60 countries and an industrial footprint in 18 countries. It is a leading supplier of steel in major global markets.

In 2017, ArcelorMittal had revenues of USD 68.7 billion and crude steel production of 93.1 MT, while its own iron ore production reached 57.4 MT.

It is listed on stock exchanges of New York, Amsterdam, Paris, Luxembourg and Spain.

The company on May 11 reported a 19 per cent jump in its net income to USD 1.19 billion for the quarter ended March 31, 2018 and also saw its net debt decrease to USD 11.1 billion.

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