This week the Family Business Office, for its twenty-fifth edition of ‘Focus On’, introduces second generation heir Lakshmi Mittal. He is the Executive Chairman of ArcelorMittal, the world’s largest steelmaking company, as well as Chairman of stainless-steel manufacturer Aperam.
Rajasthan-born Mittal, 70, was named after Lakshmi, the Indian goddess of wealth. He built his fortune, which has more than doubled in 12 months, from assembling the world’s biggest steel producer, ArcelorMittal, whose headquarters are in Luxembourg.
In the 1960s Mittal’s family moved to Calcutta (Kolkata), where his father operated a steel mill. Mittal worked at the mill while studying science at St. Xavier’s College. After graduating in 1970, he served as a trainee at the mill, and in 1976 he opened his own steel mill in Indonesia.
He spent more than a decade learning how to run it efficiently. In 1989 Mittal purchased the beleaguered state-owned steel works in Trinidad and Tobago, which had been losing huge sums of money. A year later that facility had doubled its output and had become profitable. He used a similar formula for success in a series of acquisitions all around the world, purchasing failing (mostly state-run) outfits and sending in special management teams to reorganize the businesses.
Mittal’s business philosophy emphasized consolidation in an industry that had become weak and fragmented. Although demand for steel remained high, smaller steel companies had been unable to strike competitive deals with major clients, notably automakers and appliance manufacturers. Mittal’s company, however, controlled about 40 percent of the American market for the flat-rolled steel used to make cars, which allowed the giant steelmaker to negotiate more favourable prices. In 2004 Mittal merged his companies, Ispat International and LNM Holdings, and acquired Ohio-based International Steel Group. The newly created company, Mittal Steel Co. NV, emerged from the deal as the world’s largest steelmaker. Two years later Mittal oversaw another merger when Mittal Steel joined with Arcelor to form ArcelorMittal.
Lakshmi Mittal serves as chairman of $53.3 billion (revenue) ArcelorMittal, the world’s largest steel and mining company by output. Hailing from a steel clan, he separated from his siblings to start Mittal Steel then went on to merge the company with France’s Arcelor in 2006.
The company reported a net loss of $700 million in 2020, a year in which steel shipments declined by close to a fifth. In 2019, Arcelor and Nippon Steel completed their $5.9 billion acquisition of Essar Steel, once controlled by billionaires Shashi and Ravi Ruia. In January 2021, Mittal ceded the CEO’s position to his son, Aditya Mittal, but remains executive chairman of ArcelorMittal.
( All factual and statistical information presented in this blog has been obtained from an extract of articles found on www.forbes.com and britannica.com) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt
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