Saturday, September 20, 2008

The steely wonder

The CFO of ArcelorMittal talks about his grand plans for India, China, and the group, and the future of the global steel industry

It was a chance meeting at Taj Mansingh’s Ricks bar in New Delhi. The young, boyish-looking man asked for a small favour and got talking. It was then that he revealed that he was Aditya Mittal, the son of L. N. Mittal, and the CFO of the world’s largest steel company, ArcelorMittal. But his humility and his willingness to interact with the Indian media came to the fore when he readily agreed for an interview at a later date. Unlike other businessmen, he stuck to his words.

While the father, L. N. Mittal performed the almost-impossible task of consolidating the deeply-fragmented global steel industry, and went on to become the largest player with a manufacturing capacity of over 100 MTPA, his 31-year-old son, Aditya, has played a central role in the creation of the steely behemoth, which is known as ArcelorMittal. Today, Aditya is the CFO of the ArcelorMittal. He is the group’s financial wiz kid, who has a iron-like grip on financials and numbers.

He caught the attention after he managed the Ispat International’s IPO ($775 million), the largest ever in the steel industry. In 1999, his father crowned Aditya as the head of M&A activities. Aditya’s opportunities came in the early 2000s, when the steel industry went through a crisis and almost every firm was available for sale. But unlike others, Aditya acquired assets for dirt-cheap prices, except possibly Arcelor. He chose firms that offered access to raw materials, which is critical in the steel sector.

Under Aditya’s vision, the group successfully made strategic acquisitions like that of the US-based ISG, Sidex in Romania, Annaba in Algeria, Iscor in South Africa and others. Not to forget his recent triumph – Arcelor. For example, when there was a deadlock between Arcelor and Mittal Steel, Aditya’s father wrote a letter to Arcelor to carry on things further. And this was matched by Aditya, who negotiated with Arcelor officials to remove the roadblocks that stood in front of the deal.

What makes Aditya a complete M&A architect is the fact that he has made acquisitions at a maddening pace, and ensured that there’s a perfect seamless integration between the different assets. During a press conference in New Delhi after the Arcelor deal was through, LN passed on the integration queries to his son. In a suave manner, Aditya replied that “we will be sitting with the (Arcelor) management and come up with a resolution which is logical for both the companies.” That’s the kind of diplomatic acumen that he has shown several times.

Aditya has grand plans for India, most of which are under wraps right now. All that ArcelorMittal managers reveal is that major announcements are likely to be made in 2008 & 2009. The same is true for China, and India and China are the only two nations where the Mittal Group is yet to establish and consolidate its presence. But Aditya’s skills will be tested in both these countries.

Here are excerpts from an exclusive interview with Aditya Mittal.After the successful Arcelor deal, how has been the journey so far? How has been the integration experience, especially with respect to operational synergies and cultural issues? What are the kinds of acquisitions that you are looking at right now, both in geographical and strategic senses?

The journey has been even better than we expected. There has been tremendous willingness and commitment among our employees to ensure the success of this integration. We are ahead in terms of our synergy target, and have just launched our new brand. Looking ahead, we have a three-pronged growth strategy focused on product, geography, and value chain. We announced last year that we had identified opportunities to raise capacity by 20% through organic growth alone. This growth is largely in developing markets such as Brazil, Eastern Europe & Kazakhstan. M&A is part of this strategy. In fact, we announced over 30 acquisitions in 2007 with a total investment value of approximately US$10 billion. The steel industry is a cyclical one. Where exactly do you think is the industry headed towards at the moment? Will the cycle really end with Beijing Olympics, or are we in a long-term bullish commodity phase?

For Complete IIPM Article, Click on IIPM Article

Source :
IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
IIPM awards four Bengali novelists
IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
Moneycontrol >> News >> Press- News >> IIPM ranked No1 B-School in ...
IIPM ranked No. 1 B-school in India- Zee Business Survey ...
IIPM ranked No1 B-School in India :: Education, Careers ...
The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs

No comments: