This action might not be possible to undo. Are you sure you want to continue?
ArcelorMittal is a successor to Mittal Steel, a business founded in 1989 by Mr. Lakshmi N. Mittal, the Chairman of the Board of Directors and Chief Executive Officer of ArcelorMittal. It has experienced rapid and steady growth sinc e then largely through the consis tent and disciplined execution of a successful consolidation-based strategy. Mittal Steel made its first acquisition in 1989, leas ing the Iron & Steel Company of Trinidad and Tobago. Some of its principal acquisitions since then include Thyssen Duisburg (Germany) in 1997, Inland Steel (USA) in 1998, Unimetal (France) in 1999, Sidex (Romania) and Annaba (Algeria) in 2001, Nova Hut (Czec h Republic) in 2003, BH Steel (Bosnia), Balkan Steel (Macedonia), PHS (Poland) and Iscor (South Africa) in 2004, ISG (USA), Hunan Valin (China) and Kryvorizhstal (Ukraine) in 2005, three Stelco Inc. subsidiaries (Canada) and Arcelor in 2006. Arcelor was created in February 2002 by the c ombination of three steel-making companies: Ac eralia Corporación Siderúrgica ("Aceralia"), Arbed and Usinor, to create a global presence in the steel indus try. At the time of its acquis ition by Mittal Steel in 2006, Arcelor was the second largest steel producer in the world in terms of production, with 2005 production of 46.7 million tonnes of steel and 2005 revenues of ¼32.6 billion. It operated in all key end markets : the automotive industry, construction, household applianc es, pack aging and general industry. Arcelor enjoyed leading positions in Western Europe and South America, in particular due to its Brazilian operations. In 2007, ArcelorMittal continued to pursue a disciplined growth s trategy, with a total of 35 transactions announced in Argentina, Austria, Canada, China, Estonia, Franc e, Germany, Italy, Mexico, Poland, Russ ia, Slovakia, South Africa, Turkey, the United Kingdom, Uruguay, the United States and Venezuela, a number of which were completed in 2007. During 2007, ArcelorMittal also announc ed or completed buy-out offers for minority interests in certain of its subsidiaries in Argentina, Brazil and Poland. ArcelorMittal also initiated development plans for its greenfield projec ts in India, Liberia and Senegal and announced new prospective development projects in Mauritania, Mozambique, Nigeria, Russia, Saudi Arabia and Turkey. During the first eight months of 2008, ArcelorMittal continued making inves tments , with significant transactions announced in Australia, Brazil, Canada, Cos ta Rica, France, Rus sia, South Afric a, Sweden, Turkey, United Arab Emirates, the United States, and Venez uela, the majority of which have been completed. During the last four months of 2008, Arc elorMittal largely suspended mergers and acquisitions and other investment activities in light of the deteriorating economic and market environment. ArcelorMittal has proven expertis e in acquiring companies and turning around under-performing ass ets and believes that it has succ essfully integrated its previous key acquisitions by implementing a "best practices" approach in operations and management to enhance profitability. Sinc e the acquis ition by Mittal Steel of Arcelor, a company of approximately equivalent s ize, the c ombined c ompany has reached significant milestones in its operational integration process ahead of schedule, having consolidated support functions, optimised its supply chain and proc urement structure and leveraged res earch and development s ervices across a larger base, thereby achieving cost savings and revenue synergies, as well as other synergistic benefits. As of 31 December 2008, Arc elorMittal had fully realis ed its targeted $1.6 billion in s ynergies from the merger. ArcelorMittal has grown through the acquisition of numerous steel-making and other assets, which currently constitute its major operating subsidiaries . More rec ently, ArcelorMittal's acquisitions have been concentrated on v ertic al integration (i.e., acquisitions of raw material producers or production sites). ArcelorMittal's principal inves tments and acquis itions (including Greenfield projects), during the year ended 31 December 2008, are summarised below. The bulk of these acquisitions and investments were made prior to the sharp downturn in the steel market starting in September 2008. Since then the Company has sharply curtailed its M&A and investment activities and placed under review as a general matter its inves tment projects involving s ignificant capital expenditure, including those summarised below and those announc ed in prior years. Many of these projects, particularly "Greenfield" projects, (i.e., new-build construction projects) and large "Brownfield" projects (i.e., expansion or improvement of exis ting sites) are in any c ase subjec t to the rec eipt of various regulatory approvals without which implementation cannot begin. As dis cussed more fully in "Item 5-Operating and Financial Review and ProspectsOverview-Initiatives in Respons e to Changing Market Conditions", the Company has sharply reduced its anticipated capital expenditures for 2009 to $3 billion, of which $2.5 billion is for maintenanc e.
History of Mittal Steel
Mittal Steel's growth was founded on a consis tent philosophy: that to be able to deliver the range and quality of products customers demand the modern steel maker must have the scale and worldwide pres enc e to do so competitively. The group was formed when two sister c ompanies in the Mittal family , LNM Holdings and ISPAT International, were merged to form Mittal Steel in 2004. Mittal Steel Growth Timeline
2005 :Acquis ition of a stake in Hunan Valin > ISG Acquisition c ompleted > Mittal Steel Europe created > Mittal Steel makes Fortune 500 list of top companies> MDA with Liberian government > Acquisition of Kryvorizhstal > MoU with State of Jharkhand, India > Acquisition of Stelc o subsidiaries > Stake lifted in Mittal Steel Zenica 2004 :Acquis ition of Polski Huty Stali > Ac quisition of BH Steel > Acquisition of Mac edonian facilities from Balkan Steel > Creation of Mittal Steel and proposed acquisition of International Steel > 2003 :Acquis ition of Nova Hut 2002 :Business as sistanc e agreement signed with Iscor 2001 :Acquis ition of ALFASID > Acquisition of Sidex 1999 :Acquis ition of Unimétal 1998 :Acquis ition of Inland Steel Company 1997 :Ispat International NV goes public 1995 :Acquis ition of Hamburger Stahlwerke > Ispat International Ltd. and Ispat Shipping formed > Acquisition of Karmet 1994 : Acquisition of Sidbec-Dosco 1992 :Acquis ition of Sibalsa 1989 :Acquis ition of Iron & Steel Company of Trinidad & Tobago
History of Arcelor
Arcelor was created through the merger of Arbed (Luxembourg), Aceralia (Spain) and Usinor (France). The three European groups were determined to mobilis e their tec hnical, industrial, and commercial resources in order to create a global leader in the s teel industry. The merger was officially launched on 19 February 2001 and the choice of the Arcelor name was announced on 12 December 2001. The merger became effective on 18 February 2002 when Arcelor shares were listed on several stock exc hanges. Arcelor Highlights 2002- 2006
y y y y y
2006 2005 2004 2003 2002
Founding c ompanies of Arcelor
y y y
Chronology Arbed Chronology Ac eralia Chronology Usinor
The Merger Process
2006 was a very exciting and challenging year for Arc elorMittal. The new company was at the forefront of the consolidation process, leading the industry through mergers and acquisitions.
January 2006 Historic moment for the Global Steel Industry
The year started with the historic launch of the Mittal Steel offer to the shareholders of Arc elor to create the world's first 100 million tonne plus steel produc er. The aim of increasing globalisation and consolidation, necess ary in the steel industry, defines the deal and s ets the pac e for the industry.
February 2006 - Expansion and strong results
Mittal Canada c ompletes the acquisition of three Stelc o subsidiaries , the Norambar and Stelfil plants, loc ated in Quebec, and the Stelwire plant in Ontario. Stelfil and Stelwire will add 250,000 tonnes of steel wire to the company's annual produc tion c apacity, providing a wider product mix to better meet customers' needs. Arcelor acquires a 38.41% stake in Laiwu Steel Corporation, in China. Laiwu Steel Corporation is China's largest produc er of sections and beams, and will further boost its operational excellence thanks to this partnership. It is still awaiting approval with the Beijing authorities.
April 2006 - Renewal after Hurricane Katrina and new galvanised line
Out of the devas tation of Hurricane Katrina, aros e a revitalised Miss is sippi youth bas eball field, rebuilt with the help of Mittal Steel USA and Arcelor. The company provides money towards the purchas e of lighting fixtures and steel cross bar support. It als o arranges for and donates the labour costs for their installation. Mittal Steel USA places a new line into operation in Cleveland to prov ide top-quality galvanised sheet steel to automakers and other demanding customers. The new line is designed to produce in excess of 630,000 tonnes of corrosion-resis tant sheet annually, us ing the hot-dip galvanising process.
May 2006 - US clears the way for bid
Mittal Steel announces US antitrust clearance for Arc elor bid and the approval of the offer documents by European regulators. The acceptance period s tarts in Luxembourg, Belgium and France on 18 May 2006 (some days later for Spain and the United States ) and las ts until 29 June 2006. Arcelor c ontributes to the first anti-seismic s chool building in Iz mit (Turkey), where a school building had been des troyed by an earthquak e in 1999.
June 2006 - Historic agreement to create the No.1 Global Steel Company
Creating the world's largest steel company, Mittal Steel and Arcelor reach an agreement to c ombine the two companies in a merger of equals. The terms of the transaction were reviewed by the Boards of Arcelor and Mittal Steel which each recommended the trans action to their shareholders. The c ombined group, domiciled and headquartered in Luxembourg, is named Arc elor Mittal. Demons trating the c ommitment to extend markets in developing nations, a strategic partnership between Arc elor Mittal and SNI (Société Nationale d'Investis sement) is concluded c oncerning the development of Sonasid. This consolidates and develops the position of Sonasid on the Moroccan market, allowing the company to benefit from the transfer of Arc elor Mittal's tec hnologies and skills in the long carbon steel product s ector.
September 2006 - New dividend policy
Arcelor Mittal announc es new dividend polic y, under whic h it will pay out 30% of net income annually. 93.7% of Arcelor shareholders tender their shares to Mittal Steel. Arcelor Mittal confirms Value Plan up to 2008.
December 2006 - Deals, deals, deals!
Arcelor Mittal sells Thüringen long c arbon steel plant to Grupo Alfonso Gallardo for ¼591 million euros, as part of Mittal Steel's commitments to the European Commission. Arcelor Mittal and the Government of Liberia conclude the review of the Mining Development Agreement. W ith this agreement giving access to iron ore mining, with capacity of 15 million tonnes a year, the Liberian Government and Arcelor Mittal will be partners in jumpstarting economic recovery and dev elopment for Liberia. The USUS$1 billion investment will bring around 3,500 direc t jobs and 15,000 to 20,000 indirect jobs. Arcelor Mittal sells the Italian long c arbon steel produc tion Travi e Profilati di Pallanzeno and San Zeno Acciai to Duferco for ¼117 million, as part of Mittal Steel's commitment to the European Commission. Arcelor Mittal acquires Sic artsa, the leading Mexican long steel producer. Sic artsa is a fully integrated producer of long s teel with an annual production capacity of about 2.7 million tonnes , and with produc tion facilities in Mexic o and Texas . This combination of Sicartsa with Mittal Steel Lázaro Cárdenas leads to the creation of Mexic o's largest steel producer with an annual capacity of 6.7 million tonnes. Arcelor Mittal signs a Memorandum of Understanding for the Greenfield project in Oris sa, India. The aim is to set up steelmaking operations in the Keonijhar Distric t. The integrated steel plant s hould have a total annual capac ity of 12 million tonnes. This would include c aptive mining facilities, captive power supply, water supply infrastructure and other fac ilities including s etting up townships for employees. The first slab in the new c ontinuous c aster in Dabrova has been produced and represents a k ey step of the s uccessful restruc turing of Arcelor Mittal Poland. Other projects had been ac hieved earlier, such as the relining of a blast furnace in September 2006, the commissioning of the new colour coating line in Huta Florina. The start-up of a new hot strip mill in Krakow is foreseen in the first half of 2007. Arcelor Mittal says EBITDA will be higher in 2007 than in 2006.
Global strategy and monthly highlights( 2007)
In 2007, the Group announc ed 35 trans actions, of which 14 were c ompleted for a capital outlay of $12.3 billion including the assumption of debt. Key miles tones during the year 2007 were as follow.
ArcelorMittal s ells Huta Bankowa, loc ated in the South of Poland, to Alchemia SA Capital Group, as part of Mittal Steel's commitment to the European Commission during the merger process .
ArcelorMittal c ontracts a joint venture agreement with the Bin Jarallah Group for a seamless tube mill in Saudi Arabia. The mill will have a capac ity of 500,000 tonnes per year; the major part of tubes produc ed will be us ed in the oil industry and the remainder for pipelines.
ArcelorMittal builds a new Steel Service Centre in Krakow (Poland). This facility will have a processing capacity of about 450,000 tonnes per year and will strengthen the existing de-coiling and slitting facilities in Huta Sendzimira and in Bytom. ArcelorMittal holds its Investor Day in New York and Lázaro Cárdenas on March 27-28, 2007. President and CEO, Lakshmi Mittal, introduc es the three dimensional growth strategy for reduced risk (s ustainability) and continued growth consisting of product, value chain and distribution.
ArcelorMittal finalises the acquisition of Sicarts a, from Grupo Villacero, leading to the creation of Mexic o's larges t steel produc er. Sicarsta is a fully integrated produc er of long steel, with an annual production capacity of about 2.7 million tonnes and with facilities in Mexico and T exas (United States). ArcelorMittal has also entered into a 50/50 commercial joint venture with Grupo Villacero.
ArcelorMittal launc hes its new global brand. Reflecting the c ompany's aspirations, the brand's vision 'transforming tomorrow' is supported by three main values: Sustainability, Quality and Leadership. The brand launch is an ess ential part of the integration proc ess, creating a common bond for all employees. Arc elorMittal als o launches its &#xu2;018boldness changes everything' global advertising campaign. ArcelorMittal starts a share buy-bac k programme to repurchas e class A common shares up to a maximum aggregate amount of $590 million, or up to a maximum of 27 million class A common shares, to be used either for s upporting potential corporate opportunities or for cancellation.
ArcelorMittal is granted concessions to develop mining, transportation and logis tics activities by the Republic of Senegal in the Faleme region (South East Senegal). This integrated mining project will encompass the development of the mine in four locations, comprising both hematite and magnetite deposits, the building of a new port in Bargny near Dakar and the development of approximately 750 k m rail infrastructure to link the mine to the port. The European Works Council (EWC) of ArcelorMittal is installed. The ArcelorMittal EWC represents all employees from within the EU27,130,000 employees in total, and has 54 members. ArcelorMittal acquires two steel tube bus inesses from Vallourec (France). Both companies enjoy strong pos itions in the European steel tubes market. This ac quisition underlines ArcelorMittal's strategy to expand its business in the automotive s ector, and further strengthens the Company's pipes and tubes business.
A landmark delivery of 580 tonnes of steel, milled in ArcelorMittal Differdange (Luxembourg), is used in the c ons truction of the World Trade Centre Memorial in New York City. The jumbo beams represent approximately 20% of the s teel us ed for the project. ArcelorMittal and RAG Beteiligungs-AG sign an agreement concerning the acquisition of the 76.88% stake directly held by RAG in Saar Ferngas AG Saarbrücken. Saar Ferngas is the largest gas distribution c ompany in Saarland and Rhineland-Palatinate in Germany. This agreement is an opportunity to increas e synergies with ArcelorMittal's regional energy network. ArcelorMittal and Noble International Ltd., North America's largest producer of las er-welded s teel products, complete the transaction to combine their laser-welded tailored blanks businesses, for the benefit of their global automotive c ustomers.
< p> ArcelorMittal invests $18 million in a new cut length line for hot rolled coils in Ostrava (Czech Republic). The new Steel Servic e Centre will benefit from significant logistics and cost competitiveness, while being in line with Arc elorMittal's development strategy in Central and Eastern Europe. This fac ility has a proc essing capacity of 250,000 tonnes per year and will start operating in mid-2008. ArcelorMittal owns 100% of Arcelor Brasil after having completed the acquis ition of all its outstanding shares. ArcelorMittal holds its Investor Day in Paris and South Africa on September 11-13 2007.
ArcelorMittal and Borusan, one of Turkey's leading steel producers, announce a 50/50 joint venture partnership, cons isting in a $500 million investment in the c onstruction of a new hot mill in Gemlik. This facility will offer high grade products for the Turkish market and is planned to start operating by 2010 with a capac ity of 4.8 million tonnes. ArcelorMittal acquires a 70% in Carminati Distribuzione S.r.l, one of the leading steel distributors in Nothern Italy, which sold over 75,000 tonnes in 2006 with a turnover of euro50 million.
The Extraordinary General Meetings of shareholders of Arc elorMittal and Arc elor approve the merger of ArcelorMittal into Arcelor, to be renamed ArcelorMittal. This merger is the sec ond step in the two-step merger process between Mittal Steel and Arc elor, and is effective on November 13, 2007. ArcelorMittal purchases a 100% stake in Galvex OÜ, the Estonian privately owned steel galvanizing line. In 2006, Galvex produced 190,000 tonnes of hot dip galvanised steel, mainly for the c onstruction sector, with s ales totalling euro125 million. ArcelorMittal is awarded two gold medals for new products it unveiled at the Batimat construction fair. The Golden Innovation Medal is granted to the s olar panel Arsolar®, and the Golden Design Medal to the Angelina® beam. ArcelorMittal s igns a Memorandum of Cooperation with the Republic of Mozambique, whic h aims to develop synergies and plan further investment in the steel industry, and in the mining of raw materials. Arc elorMittal plans to build a new bar rolling mill with a yearly c apacity of 400,000 tonnes. Arc elorMittal also announces a joint venture partnership with the Mozambique-regis tered company Black Gold Mining (Moc) Lda. The Group ac quires a 35% s take in the joint venture c ompany, Rio Minjova Mining and Exploration Company, at an initial c ost of $2.5 million. ArcelorMittal and Kalagadi Manganese, a South Afric an manganese development company, start a 50/50 joint venture which will see the development of a manganese mine, beneficiation plant, sinter c omplex and a s melter complex in Coega. The project, due to start in 2010, overlies the Kalagadi Manganese Bas in, a world-renowned source of manganes e ore containing 80% of the world's known manganes e resources. ArcelorMittal invests in Greenfield Longitudinal Submerged Arc Welded pipe mill in Nigeria with a capac ity of 300,000 tonnes per year. This investment, welcomed by Nigerian National Petroleum Corporation (NNPC), gives ArcelorMittal access to a major oil and gas market. The construction of the mill is due to begin in early 2008, with production due to start in 2010. ArcelorMittal acquires a 12.6% equity stake in General Moly, Inc . for a total c onsideration of $70 million. General Moly, Inc . is a US based molybdenum mineral development, exploration and mining c ompany.
With the aim to inc rease its commercial presence in the UK, ArcelorMittal acquires NSD Ltd., a leading UK steel distribution company s pecializing in the sale of heavy sec tions and tubes. ArcelorMittal purchases Slovak ferro-alloys manufacturer OFZ, whic h manufactures a wide range of ferro-alloys and cored wires. This facility has an operating c apacity of 150,000 tonnes per year. ArcelorMittal acquires 28% equity interest in China Oriental Group Company Ltd. for $644 million. Arc elorMittal becomes the sec ond largest shareholder of this company, which manufactures and sells steel products such as billets, strips, H-beams, c old rolled and galvanis ed strip. ArcelorMittal also signs a landmark agreement with China Oriental, with the aim to transform the company into a leading produc er of heavy sec tions in China thanks to tec hnology sharing, technical expertise and know-how. ArcelorMittal acquires M.T Majdalani y Cia. S.A, the leading stainless Steel Service Centre and distributor in Argentina, and consolidates its position in the South American stainless distribution market. T his company is s pec ialis ed in flat stainless steel products with cut to length and slitting facility. ArcelorMittal s igns a Greenfield project with the administration of the Tver region in Russia. The Group will build a steel complex, with a capacity of one million tonnes of steel and two bar mills.
ArcelorMittal acquires 100% of the shares of the Austrian steel distribution company Eisen Wagner GmbH. W ith its 60,000 tonnes of steel products sold in 2007, Eisen W agner is one of the leading steel distribution companies in Austria. In order to strengthen its stainless steel business in South Americ a, Arc elorMittal purchas es Cinter S.A., an important stainless steel tube producer in Uruguay. With 200 employees and 3 s ites, Cinter develops specialties that c omplement its stainless business. ArcelorMittal plans to build a $380 million beam mill in Contrec oeur (Canada) with a capac ity of 800,000 tonnes. Flat carbon s teel production will be consolidated in Hamilton and long carbon production in Contrecoeur.
Mont hly highlights 2008 January 2008
ArcelorMittal s igns a Memorandum of Understanding with Société Nationale Industrielle et Minière in Mauritania. The agreement provides for the development of a large iron ore mining project in Mauritania. ArcelorMittal acquires Unicon, the leading manufacturer of welded s teel pipes in Venezuela. Unicon supplies the oil and gas and industrial and construction sec tors both domestically and overseas. The trans action was c ompleted in April 2008. ArcelorMittal inaugurates Arc eo, its industrial prototype line for vac uum plasma steel c oating in Liège, Belgium. With this process, steel can be a sensor, a reflec tor, a source of light, more aes thetically pleasing or endowed with better anti-corrosive properties. ArcelorMittal Steel Servic e Centre Sverige and BE Group create a 50/50 processed flat carbon s teel joint venture in Sweden. This combination creates a new number three in the Swedish market, with a 20% market share.
ArcelorMittal acquires the remaining 50% interest in Laminadora Cos tarricense and Trefileria Colima, the only major long carbon steel company in Costa Rica. ArcelorMittal and the federal and regional governments of Belgium agree on c arbon dioxide ('CO 2 ') emission allowances. As a consequence, the re-launch of ArcelorMittal Liège, Belgium, Blast Furnac e Number 6 is initiated.
ArcelorMittal enters the Brazilian Steel Service Centre market with the ac quisition of 50% of Gonvarri Bras il. The aim is to establish a s trong pres enc e in the Brazilian flat steel downstream s egment, building on the product leadership of ArcelorMittal's Tubarão, Vitória, and Vega do Sul plants. ArcelorMittal acquires three c oal mines and associated ass ets in Russia for a total consideration of $720 million. ArcelorMittal agrees to build a third line in its joint venture partnership with Nippon Steel by building a new continuous galvanizing line at the I/N Kote facility in New Carlisle, Indiana, at a c ost of $240 million. On Dec ember 4, 2008, Nippon Steel announc ed that the project would be delayed until demand in the US automobile industry market strengthens. ArcelorMittal c oncludes a c oal off-take agreement with Coal of Africa Limited, the South African coal development company, relating to the Baobab and Thuli coal mines.
The Court appointed trustee completes the sale of Arc elorMittal's Sparrows Point steel mill to OAO Severstal for $810 million, net of debt.
ArcelorMittal and its unions sign a groundbreak ing global agreement on occupational Health and Safety. It s ets out minimum standards in every s ite in order to achiev e world clas s performanc e. ArcelorMittal holds an inaugural global interac tive individual shareholder event with Sec ond Life. Through this virtual reality website, individual shareholders can meet and interac t with Mr Mittal. ArcelorMittal s igns an agreement to acquire Bayou Steel, a producer of structural steel with fac ilities in LaPlac e, Louisiana, and Harriman, Tennessee, for $509 million. The transaction clos ed in July 2008. ArcelorMittal s igns an agreement to acquire the Mid Vol Coal Group. This partnership will increas e the Company's upstream selfsufficiency in raw materials . ArcelorMittal, Hunan Valin Group and Hunan Valin Steel Co. launch Valin Arc elorMittal Automotive Steel, an industrial and commercial automotive joint venture that will have an annual production c apacity of 1.2 million tonnes of flat carbon steel, mainly for automotive applications . ArcelorMittal enhances its distribution activities in the United Arab Emirates. The Company intends to ac quire 60% of Dubai Steel Trading Company LLC ('DSTC LLC'), a newly inc orporated company located in the Dubai free zone. The acquis ition is finalised in January 2009. ArcelorMittal increases its stake in Macarthur Coal of Aus tralia, from 14.9% to 19.9%.
ArcelorMittal and AREVA s ign an industrial partnership agreement for a euro70 million ($110 million) investment aimed at increasing production of steel products for the nuclear industry at the Group's Industeel plant. ArcelorMittal launc hes a new clean technology venture c apital fund, with an initial clean technology investment of $20 million in MiaSolé, and a new c arbon fund, as part of its commitment to finding solutions for environmental challenges, including climate change. ArcelorMittal's Stainless International segment acquires the 35% stake in Uginox Sanayi ve Ticaret Limited Sirketi ('Uginox') owned by Primex. Uginox operates a coil processing and servic e c entre in Turkey dedicated to servicing the automotive and white goods markets. ArcelorMittal s igns an agreement to acquire Concept Group ('Concept'), located in southern Wes t Virginia, USA. Conc ept's proximity to Mid Vol's operations will allow the Group to draw on the complementary strengths of both companies to increas e their combined production c apacity. The transaction is c ompleted in August 2008. ArcelorMittal announc es a ¼76 million ($118 million) investment to expand electrical steel production capacity at its Saint Chély d'Apcher plant, France. ArcelorMittal reinforces its Steel Service Centre network in Brazil by acquiring a 70% share of Manchester Tubos e Perfilados , the Brazilian steel proc essor and distributor located in Contagem, Minas Gerais.
ArcelorMittal projects new investments of $1.6 billion in its c arbon steel operations in Brazil. The timing and scope of this investment are c urrently under review. ArcelorMittal acquires the Koppers' Monessen coke plant for $170 million. The ac quisition is an important step towards increasing upstream s elf-sufficiency in metallurgic al coke production. The transaction was c ompleted in October 2008. Hunan Valin Iron & Steel Group Co. Ltd and ArcelorMittal sign a 50/50 joint venture agreement for the production and s ale of electrical (silicon) steel, one more milestone following the automotive sheet JV agreement signed in June. The new JV, named Valin ArcelorMittal Electrical Steel, will build c old rolling and processing facilities for the production of electrical steels.
ArcelorMittal acquires Braz ilian iron ore miner London Mining South America Limited and reaches an agreement with Adriana Resourc es Inc. for the development of an iron ore port facility in the State of Rio de J aneiro, Brazil. Together with an investment in Mineraç ão Pirâmide Participações Ltda, the acquisition further divers ifies ArcelorMittal's iron ore bas e in the face of tighter raw material s upply.
ArcelorMittal and Kalagadi Manganese agree a 50/50 joint venture to develop Kalagadi's South African manganese deposits. Projec t implementation has not yet begun and its scope and timing are under review. ArcelorMittal Wars aw inaugurates a new bar rolling mill, one of the most advanced rolling lines in Europe, following an investment of euro80 million. ArcelorMittal announc es a new 'Management Gains' plan that will target $4 billion of cos t savings over the next five years. The plan foc uses on increasing employee productivity, reducing energy consumption and reducing input c osts to achiev e a higher yield and improved produc t quality. ArcelorMittal organises its Leaders hip Conferenc e in New Delhi, India. The 650 most s enior managers have the opportunity to pres ent their strategies, discuss c ritical issues and plan the future. Mr Mittal launc hes the new operating philos ophy of Safe Sustainable Steel.
ArcelorMittal meets with its European Works Council to present voluntary s eparation programmes to be launched across the Group. This is to help achieve the Company's stated aim of reducing SG&A expenditure by an additional $1 billion in res ponse to the current ec onomic situation. ArcelorMittal announc es meas ures in response to the downturn in the global s teel industry. These include: postponing target completion dates for the realis ation of previously announced shipment growth objectives entailing substantial capital expenditure, increas ing targeted cos t savings under the 'Management Gains' programme over the next five years to $5 billion through additional savings in SG&A costs, inc reasing temporary cuts in s teel production to up to 35% (later increas ed to approximately 40-45%) globally in order to accelerate steel inventory reduction, and targeting a $10 billion reduction in net debt by the end of 2009. In addition, Arc elorMittal suspends the share buy-back programme until the debt reduction targets are achieved.
ArcelorMittal enters into binding agreements to reduc e its voting interest in Dillinger Hütte Saarstahl AG ('DHS') from 51.25% to 33.4% (c orres ponding to an economic interest of 30.08% since DHS holds 10% of its shares in treas ury), in line with existing governance rights. ArcelorMittal plans to remain a key industrial partner to DHS.
Mont hly highlights 2009
In January 2009, ArcelorMittal began trading on a single order book in Paris, Amsterdam and Brussels, under the symbol MT. ArcelorMittal remains a member of key NYSE-Euronext indices, including the CAC40 and the AEX 1 .
ArcelorMittal c ontributed its 76.9% stake in Saar Ferngas AG to Luxembourg-bas ed utility Soteg, in which it held a minority ownership stake. Upon c ompletion, Arc elorMittal's stake in Soteg increas ed from 20% to 26.2%. ArcelorMittal then sold 2.48% of Soteg to the Government of Luxembourg and SNCI ('Société Nationale de Crédit et d'Investissement'), a Luxembourg governmentcontrolled investment. ArcelorMittal retains a 25.3% stake in Soteg, renamed Enovos.
ArcelorMittal met with its European Works Council to provide an update on the temporary suspension of production at sites in Europe. In light of the ongoing exceptional economic environment, it was necess ary to continue to suspend and optimis e production to ensure the Company was well adapted to the market reality. All production sus pensions were temporary and reviewed on a regular basis.
ArcelorMittal and the Czech Government agreed to resolve all pending arbitration and litigation regarding the privatisation of Nova Hut and Vitkovice Steel. ArcelorMittal agreed to an amicable settlement of all pending litigation and arbitration cas es against the Czech Government and its related entities. In addition, ArcelorMittal inc reased its stake in ArcelorMittal Ostrava to approximately 83%. As a part of the overall s ettlement agreement, Arc elorMittal Ostrava concluded a long-term s upply agreement for hot metal with Evraz Vitk ovic e Steel.
ArcelorMittal s igned a definitive agreement to divest its minority interest in Wabus h Mines , Canada, pursuant to which it will receive $34.28 million for its 28.6% stake. After the disposal, ArcelorMittal c ontinued to have signific ant mining operations and resources in Canada including ArcelorMittal Mines Canada.
ArcelorMittal acquired an additional 13.9% stake in ArcelorMittal Os trava, increas ing its stake to approximately 96.4%. The trans action was completed in January 2010.
ArcelorMittal held its sec ond annual International Volunteer Work Day organised by the ArcelorMittal Foundation. It cons isted of a set of actions implemented by the Group's loc al units to encourage employees to invest time and expertis e for the benefit of loc al communities.
Following the closing of a tender offer on January 7, 2010, ArcelorMittal acquired a 28.8% stake in Uttam Galva Steels Limited ("Uttam Galva"), a leading producer of cold rolled steel, galvaniz ed products and color coated coils and sheets based in Western India that is listed on the major stock exchanges of India. The Company expects to purchas e an additional 4.9% from the Promoter R.K. Miglani family in due course. ArcelorMittal entered into initial discussions with BHP Billiton to potentially combine their respective iron-ore mining and infrastructure interests in Liberia and Guinea within a joint venture. ArcelorMittal, through the Arc elorMittal Foundation, donated $1 million to help the relief efforts in Port-au-Prince, Haiti, following the earthquake that struck the is land on January 12, 2010.
1 For information about additional
exchanges where ArcelorMittal is lis ted, please refer to the 'Market Information' section in this
ArcelorMittal is the world's leading steel company, with operations in more than 60 countries . ArcelorMittal is the leader in all major global steel markets , including automotive, construction, household applianc es and pack aging, with leading R&D and
tec hnology, as well as sizeable captive s upplies of raw materials and outstanding distribution networks. With an industrial presence in over 20 countries s panning four c ontinents, the Company covers all of the key steel markets, from emerging to mature. Through its core values of Sustainability, Quality and Leadership, ArcelorMittal commits to operating in a responsible way with respect to the health, safety and wellbeing of its employees, contractors and the c ommunities in which it operates. It is also committed to the sustainable management of the environment and of finite resources. In 2009, ArcelorMittal had revenu es of $65.1 b illion and crude steel production of 73.2 million tonnes approximately 8 per c ent of world steel output. , representing
ArcelorMittal is listed on the stoc k exchanges of New York (MT), Amsterdam (MT), Paris (MT), Brussels (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valenc ia (MTS).
ArcelorMittal's core philosophy is to produce Safe, Sustainable, Steel Safety is the Company's top priority. Our s afety performanc e has improved consis tently over the last three years, most recently by 25% in 2009, and we will continue to target our ultimate goal of zero accidents. The Company's leadership position in the steel industry is the result of a c onsistent management strategy that focuses on product diversity, geographic reach and vertical integration - both into raw material production, designed to minimize risk caused by economic cycles, and downstream distribution, providing value-added and customised steel solutions through further processing to meet s pecific customer requirements. Our customers are the heart of our busines s. We c ollaborate closely with them to ensure that we evolve and develop our products inline with their c ontinually c hanging needs. ArcelorMittal is c ommitted to its promise of 'transforming tomorrow' and the three values that underpin it - Sustainability, Quality and Leadership. These values shape our behavior. We recognise that the Company has a duty to its stakeholders to operate in a responsible and transparent manner and to safeguard the wellbeing of all its stakeholders , including employees, contractors and the communities in whic h it operates. That's why we hav e a strong focus on Corporate Responsibility. This is evidenced in numerous areas , for example the Company's efforts to develop break through steelmaking technologies , our leadership of the steel industry's Ultra Low Carbon Steel (ULCOS) programme and the global activities of the Arc elorMittal Foundation. No dis cussion of the Group's philosophy would be complete without reference to our employees. The Company is only as good as its people, and our journey through the crisis was helped by their efforts, flexibility and understanding. In 2009, ArcelorMittal had sales of approximately $65.1 billion 1 , steel shipments of approximately 71 million tonnes and c rude steel production of approximately 73 million tonnes.
'$', 'dollars', 'USD' or 'U.S. dollars' refers to United States dollars, the official currency of the United States of America.
MANAGEMENT Board of Directors
ArcelorMittal c ontinues to plac e a strong emphasis on corporate governanc e. Arc elorMittal has eight independent directors on its 11member Board of Direc tors. Arc elorMittal's Audit Committee and Appointments, Remuneration and Corporate Governance Committee are each comprised of three independent directors and half of the members of ArcelorMittal's Risk Management Committee are required to be independent. On 12 May 2009, the expirations of the mandates of Sergio Silva de Freitas, Michel Angel Marti and Jean-Pierre Hansen were accepted by the annual general meeting. Narayanan Vaghul, Wilbur L. Ross and François Pinault were re-elected as members of the Board of Directors. After the annual general meeting held on 12 May 2009, Ignacio Fernandez Toxo resigned from the Board of Directors. On 1 September 2009, Malay Mukherjee resigned from the Board of Directors .
Georges Schmit res igned from the Board of Directors effective 31 December 2009. In replacement of Mr. Schmit, the Board appointed J eannot Kreck é as an interim board member starting 1 J anuary 2010. Mr. Krecké's full appointment to the Board of Directors will be proposed to the shareholders at the Company's annual general meeting on 11 May 2010. Like Mr. Schmit, Mr. Krecké will s erve on ArcelorMittal's Board of Directors as a shareholder repres entative.
y y y y y y y y y y y y
Lakshmi N. Mittal Chairman of the Board of Directors and CEO Vanisha Mittal Bhatia Member of the Board of Directors Narayanan Vaghul Member of the Board of Directors Independent Wilbur L. Ross, Jr. Member of the Board of Directors Independent Lewis B. Kaden Member of the Board of Directors Lead Independent Director Independent François Pinault Member of the Board of Directors Independent José Ramón Álvarez Ren dueles Member of the Board of Directors Independent Jeannot Krecké Member of the Board of Directors Non Independent John O. Castegnaro Member of the Board of Directors Independent Director Antoine Spillmann Member of the Board of Directors Independent H.R.H. Prince Guillaume de Luxembourg Member of the Board of Directors Independent Secretary to the Company and the Board of Directors: Henk Scheffer , Company Secretary
Group Management Board
The strategic direc tion of the busines s is the responsibility of the GMB. The GMB members are elected by the Board of Directors and the GMB is headed by Laks hmi N. Mittal as Chief Exec utive. On 1 January 2010, Peter Kukielski joined the GMB as Head of Mining, bringing a wealth of strategy, operations, project development and international experienc e to the Company. The senior management team continues to enjoy the relevant talent and expertise it needs to continue to deliver the best possible performanc e to all stakeholders. The composition of ArcelorMittal's Group Management Board is as follows:
y y y
Lakshmi N. Mittal Chairman and CEO Aditya Mittal CFO Member of the Group Management Board Michel Wurth Member of the Group Management Board
y y y y y y
Gonzalo Urquijo Member of the Group Management Board Sudhir Maheshwari Member of the Group Management Board Christophe Cornier Member of the Group Management Board Davinder Chugh Member of the Group Management Board Peter Kukielski Member of the Group Management Board Secretary to the Group Management Board: Sujogya Dash
AllGroup Management Board members also sit on the Management Committee. The structure is both lean and flat. It aims to create an organis ation that is at onc e inventive and adaptable, with c lear acc ountability at every level. Above all, it aims to foster an entrepreneurial spirit that will promote and deploy Arc elorMittal leadership. The additional members of the Management Committee and their res ponsibilities are as follows:
y y y y y y y y y y y
Bhikam Agarwal Exec utive Vice President, Head of Finance Vijay Bhatnagar Exec utive Vice President, CEO India Philippe Darmayan Exec utive Vice President, CEO Distribution Solutions Philippus F. Du Toit Exec utive Vice President Head of Mining Projects and Exploration Bernard Fontan a Exec utive Vice President, Head of Human Resources Jean-Yves Gilet Exec utive Vice President, CEO Stainless Pierre Gugliermina Exec utive Vice President Chief Technology Officer Robrecht Himpe Exec utive Vice President, CEO Flat Europe Gerson Alves Menezes Exec utive Vice President, CEO Long Central and South America (LCSA) Michael Pfitzner Exec utive Vice President, Head of Marketing and Commercial Coordination Arnaud Poupart-Lafarge Exec utive Vice President CEO Afric a and Commonwealth of Independent States (CIS)
y y y y y
Gerhard Renz Exec utive Vice President, CEO Long Europe (including Annaba, Bos nia, Ostrava and Sonasid) Michael Rippey Exec utive Vice President, CEO USA Lou Schorsch Exec utive Vice President, CEO Flat Americas Bill Scotting Exec utive Vice President, Head of Strategy Secretary to the Management Committee: Sujogya Dash
Innovation is a mindset at ArcelorMittal. Not only are we the largest steelmaker by volume but we offer the broadest range of steel grades, new steel products, steel solutions and cutting-edge technologies. Close c ooperation with cus tomers - involving mutual trust, an open-minded approac h and permanent exchanges of personnel - helps fos ter the spirit of innovation , enabling us to develop the products and solutions that will meet their ever-growing demands. Over the longer term, we continue to work at Cutting-edge steel products, solutions and process technologies.