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How Lakshmi Mittal Created Arcelor Mittal Steel and became a


Billionaire
AjaeroTonyMartins
ThestoryofLakshmiMittalissuchaninspiring
story.Thoughhedidntmakeourlistofschool
dropoutbillionaires;hesbeennicknamed
CarnegieofCalcuttaafterthe19thcentury
Americandropoutrailroadtycoon;Andrew
Carnegie.Hisstoryisthatofaman,whorose
fromnothingnesstojointhecovetedForbeslist
ofworldsrichesttoptenbillionaires.He
achievedthisfeatbycreatingArcelorMittal;the
biggeststeelcompanyintheworld,worth
over100bn.

LetmealsobringtoyournoticethatthisIndian
bornsteeltycoonisthewealthiestmaninBritain,withanestimatedfortuneof30bn.Heis
alsowellconnectedtorichandpowerfulmensuchasNicolasSarkozy,BernieEcclestone,Tony
BlairandBillClinton.

LakshmiMittalwasbornin1950inasmalltowninIndiacalledSadulpur,inRajasthan.Being
theeldestoffivechildren,hisparentsdecidedtonamehimLakshmiaftertheHindugoddessof
wealth.Attheageofsix,hisfamilymovedtoCalcutta,wherehisfathergainedemploymentinasmall
Britishsteelcompany.Thisgavethefamilythebrevitytosetuptheirownbusiness,butitturnedout
tobequitechallengingandtough.

Whilehisfatherworkednightanddaytobuildtheirnewbusiness,LakshmiMittal,whohappensto
beashyandintrovertedteenagergraduatedfromaJesuitcollege,StXaviers.Mittalsurprised
everyone,includinghisparentsbyreceivingexcellentgradesinaccountingandmathematics.But
insteadofbecominganemployeeaccountant,MittaljoinedthefamilyscompanyIspatandthat
markedtheturningpointofhislife.

How Lakshmi Mittal Created Arcelor Mittal Steel and became a


Billionaire
Lakshmiwasinspiredbythemassiverollersdrivenbyrubberbeltsandpulleysthatflattened
theredhotsteelintobars.Lateron,Mittalwentsoloandfoundedthecompany,LNMGroupin

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1976attheageof26andhasbeenresponsibleforthedevelopmentofitsbusinesseseversince.
Hesetuphisfirststeelmill,inIndonesia,producing26,000tonnesandgeneratingannual
profitof$1m.

LakshmiMittalsoonrealizedthattobecomeamajorplayerinthesteelmarket,hissteelwouldhave
togoglobal,justlikecarmanufacturers,shipbuilders,ironandcoalproducers.Determinedto
makehiscompanyaglobalplayer,hestartedacquiringcompaniesinCanadaandGermany.Still
notgettingthebigbreakheneeds,heturnedtoKazakhstan.

Backthen,theformerSovietrepublicwasinafinancialmessandonthebrinkofbankruptcy.
MittalacquiredthecountrysKarmetSteelworksinTemirtauforaknockdownpriceof$400m.
KazakhstanhappenstoshareaborderwithChina,wheredemandforsteelwasabouttotakeoff.
ThatsingleacquisitionturnedouttobeaverywisestrategicinvestmentasitpropelledMittal
intothebigleagueofinternationalsteelmakers.LakshmiMittalbecameaglobalsteelproducer
withoperationsin14countries.

Recognizingtheneedforastrongmanagementteamtoexecutehisstrategicexpansionplans,
hebroughtinIndianmanagers,doubledproductionandbegansellingtoboomingmarketsinthe
East.Withluck,aswellastimelyjudgment,herescuedKazakhstanfromfinancialruinandpavedthe
wayforfurtherlargescaleacquisitions.

LakshmiMittalwasalsothevisionarywhosawthatthefragmentedinternationalsteelindustry,
servinglocalmarkets,wascryingoutforconsolidation.Manycompaniesthenwereownedbythe
governmentsandinnovativedevelopmentswerenotforthcominginthesteelindustry.Thoughsome
companieshadbeenprivatized,thesteelsectorwasstillcharacterizedbyacuteovercapacity,
highindebtednessandsteelpricesthathadhitrockbottom.

LakshmiMittalcreatedMittalSteelin2004viaatakeoverofhisprivatecompany,LNMby
hispublicone;Ispat.MittalSteelbecamethelargeststeelmakerintheworld,withshipments
of42.1milliontonsofsteelandprofitsofover$22billionin2004.

In2006,attheageof58,LakshmiMittaltooktheworldbystormbybeatingallEuropean
establishmentstoacquireArcelorSteel,acompanycreatedthroughamergeroffirmsfromSpain,
France,LuxembourgandBelgium.Arcelorchairman,GuyDolle,wasforcedtoswallowhis
wordsaftercontroversiallydismissingMittalSteelasacompanyofIndianspayingwith
monkeymoney.Afteralongdrawnbattle,Arcelorsshareholdersdecidedtoselloutdespite
oppositiontothedealfrompoliticiansincludingformerFrenchPresidentJacquesChirac.

ThecreationofArcelorMittal,thebiggeststeelcompanyonearthandnowworthover100bn,
couldnthavecomeatabettertime.Thenewgroup,ledbyLakshmiMittallaunchedintoa
worldwidecommoditiesboomthathasseensteelpricesskyrocketfrom$240atonnein2002

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to$1,000today.ArcelorMittalwasthefirsttoproducemorethan100milliontonnesofsteela
year;thatcoulddoubleinafewyearsasMittalSteelgoesonanotheracquisitionspree,extending
hisempiretoAfrica,AustraliaandChina.

Today,ArcelorMittalemploys300,000peoplein60countries,butaccountsforonly10percentof
globaloutput,soitcouldgrowmuchbiggerbeforeattractingtheattentionoftheantitrustauthorities.
Certainly,thereistheopportunitytogrow,LakshmiMittalsaidrecently.Towhatsize?Youcould
goupto150or200milliontonnesayear,hesaid.

Justaseverysuccessfulentrepreneurisexpectedtofacecriticism,LakshmiMittalhas
attractedcriticism.191peoplehavediedinaccidentsinthepast12yearsathisKazakhstan
operations,wherecampaignersarguethatmoremoneyshouldhavebeenspentonsafetymeasures.
Thecompanyhasstronglyrejectedallegationsofnegligence,butlaterearmarkedanextra
$1.2bnforimprovements.

InBritain,LakshmiMittalhasdonatedtotheLabourpartybutranintocontroversyin2001
whenhegavetheparty125,000justbeforethegeneralelection,allegedlyinexchangeforaletter
fromTonyBlairtotheRomaniangovernmentsupportinghisbidforaRomaniansteelplant.Both
deniedtheallegation.

LakshmiMittalisproudtobeIndian,butheconsidershimselfaglobalcitizen.Despitehis
immensewealth,hisfamilys44percentstakeinArcelorMittalworth24bn,hedoesntseekthe
limelight.YouwontseehimatAscot,WimbledonortheProms,althoughhedoesattendfootball
matches,afterbuying20percentofLondonclubQPR,whereFormula1supremoBernie
Ecclestoneisalsoontheboard.

HeismarriedtoUshaMittal,andbothhaveasonanddaughter,AdityaandVanisha.Being
flushedwithcash,LakshmiMittalhitthenewswhenhereportedlyboughthisthirdpropertyin
LondonsKensingtonParkGardens,dubbedbillionairesrow,forhisdaughter,Vanisha.
LakshmiNiwasMittalisnodoubtabillionaireindustrialistbyallstandardsandheistreatedasa
nationaliconinhiscountry,India.

Withoutshowingsignsofrestingonhisoars,LakshmiMittalisplottinghisnextmove.Hewantsto
securedepositsofcokingcoalandironore,whichhavedoubledinpriceinthepastfouryears
andwhicharevitalfortheproductionofsteel.HeisintalkstoacquirecoalminesinAustraliaand
Russia,whileexpansionelsewheremeansthatArcelorMittalnowmeets45percentofitsiron
orerequirementsfromitsownsupplies.

LakshmiMittalhasalsoinvestedinshippingandrailtocuttransportcosts.Theonlypartof
thesupplychainthatremainsoutsidehiscontrolisoilandgas:anarea,perhaps,thatcould
attracthisattentionbeforetoolong.

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Asidehisachievementsinbusiness,LakshmiMittalwasawardedFortunemagazinesEuropean
BusinessmanoftheYear2004andalsoSteelmakeroftheYearin1996byNewSteel,and
theWillyKorfSteelVisionAwardin1998,foroutstandingvision,entrepreneurship,
leadershipandsuccessinglobalsteeldevelopmentfromAmericanMetalMarketand
PaineWebersWorldSteelDynamics.

In2002,LakshmiMittalwasinvolvedinapoliticalscandalwithBritishPrimeMinisterTony
Blair,whenadonationhemadetotheLabourpartyledtoBlairsinterventioninabusinessdeal
flavoringMittal,itwasannouncedlaterhedonated2milliontotheLabourParty.

LakshmiMittalisanactivephilanthropistandamemberofafewtrusts.Mittalisamemberof
theForeignInvestmentCouncilinKazakhstan,theInternationalInvestmentCouncilinSouthAfrica,
theWorldEconomicForumsInternationalBusinessCouncilandtheInternationalIronandSteel
InstitutesExecutiveCommittee.

HeisaDirectorofICICIBankLimitedandisontheAdvisoryBoardoftheKelloggSchoolof
ManagementintheU.S.InMarch2005,ForbesMagazinenamedhimthe3rdrichestmaninthe
worldandtherichestnonAmerican,withanestimatedwealthofUS$25billion.Hehasbeenon
theForbeslistofworldstop10richestbillionairesformorethanfiveyearsrunning.

HeisthewealthiestpersoninBritain.HishouseinKensington,boughtin2003for$128
millionisthemostexpensivehouseeverpurchased.Healsopaidupwardsof$55millionto
hosthisdaughtersweddingcelebrationinVersaillesin2004.

ThestoryofLakshmiNiwasMittalhasreallyprovedthatwhatthemindcanconceiveand
believe,itcanachieve.IfonlyyouthscanaspiretobelikeLakshmiMittal,theworldwillbea
betterplace.

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