‘Mittal’ic Magic
From his grand top-floor office in Berkeley Square, Lakshmi Mittal commands a westward view over London’s West End to Kensington Gardens, where he lives in one of the city’s swankiest houses. The giant swimming pool in its basement is one reason why the leader of the world’s steel industry, and Britain’s richest man, looks so fit and relaxed. Born in India, Mr Mittal has long made London his home and first came to notice there in 2002 when Tony Blair, the prime minister at the time, controversially put in a good word for him in a Romanian deal. When he made his sudden and spectacular appearance on the European business scene in early 2006, Mr Mittal was still a relative unknown. French government ministers, frightened by his takeover bid for the largely French Arcelor steel firm, did not know whether they were under attack from America or India.
The answer was neither: Mittal Steel was a company from everywhere and nowhere, which helps to explain why its integration with Arcelor to form ArcelorMittal, the world’s largest steelmaker, went so surprisingly smoothly. Most mergers fail: from AOL Time Warner to DaimlerChrysler, the corporate landscape of the past decade is littered with wrecks. Just as surprising was the way in which Mr Mittal managed to overcome opposition to the deal from the business establishment and the French government—and has now gone on to increase profits in the new firm’s first full year. On February 13th ArcelorMittal announced that it had made $19.4 billion, before tax and interest, on sales of $105 billion in 2007—up 27% on the two firms’ aggregated profits in the previous year. Mr Mittal’s 43% stake makes him the world’s fifth-richest man, with a fortune of some £19 billion.
The younger Mittal’s emergence onto the world steel scene was not part of some global vision, but was the result of opportunism, a bold eye for a deal and an ability to turn round failing firms. His supplier of DRI was a struggling state-owned steel firm in Trinidad. When the Trinidadians spotted Mr Mittal’s success in Indonesia, they invited him to turn their firm around under contract, and he eventually bought it in 1994. At around the same time he acquired another DRI steel plant in Mexico, and two more in Canada and Germany. All of these were distressed assets that governments wanted to offload. By the end of the 1990s the brash newcomer from Kolkata by way of Jakarta was even picking up assets in America, where the rust-belt steel firms were going into decline, and in Eastern Europe, where governments were keen to privatise loss-making state-owned firms. Today Mr Mittal’s firm owns one Chinese steel company and holds a stake in another. The steel giant thus straddles the developing world (with opportunities for growth) and the developed world (with scope for consolidation).
It’s always amazing to read success stories where people go from ground zero to becoming a huge success. Although Mr. Mittal wasn’t at rock bottom, he did have an eye for business that has helped him become the man he is today. He is one of many successful people that seem to naturally know what they’re doing. If only the rest of us could pick his brain and learn every little thing we need to know to become just as successful.
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