Mittal Steel Company


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A comparative introduction of Mittal Steel Company,
its competitive product line, strategies and financial stability.

Published in: Business
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  • May project is around the following
    1) What forces drove Mittal Steel to start expanding across national borders?
    2) Mittal Steel expanded into different nations through mergers and acquisitions,as opposed to greefield investments Why?
    3) What benefits does Mittal bring to the countries that it enters?Are there any drawbacks to a nation when Mittal Steel invests there?
    4) What are the benefits to Mittal Steel from entering different nations?
    5) The acquisition of Arcelor was very acrim0nious,with many politicians objecting to it.Why do you think they objected?Were their objections reasonable?
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  • Mittal Steel Company

    1. 1. Mittal Steel Company Our Philosophy, Our Values Est. 1976
    2. 2. Objective A comparative introduction of Mittal Steel Company, its competitive product line, strategies and financial stability Mittal Steel Company
    3. 3. Introduction <ul><li>Headquartered in Netherlands </li></ul><ul><li>The world’s largest steel producing company </li></ul><ul><li>Global presence in 18 countries with 260,000 workforce </li></ul><ul><li>Highest revenue in the industry </li></ul><ul><li>Tremendous acquisition momentum </li></ul><ul><li>Product versatility in every segment </li></ul><ul><li>Biggest “Direct Reduced Iron” (DRI) producer </li></ul><ul><li>Strong clientele among 150 countries </li></ul>Mittal Steel Company
    4. 4. Management <ul><li>Lakshmi Mittal, President and Chief Executive Officer </li></ul><ul><li>Joseph Kinsch, Chairman of Board of Directors </li></ul><ul><li>Aditya Mittal, CFO Finance & Strategy </li></ul><ul><li>Board of Directors consists of 18 members </li></ul><ul><ul><li>three employee representatives </li></ul></ul><ul><ul><li>three chosen by shareholders </li></ul></ul><ul><ul><li>six nominated by Arcelor </li></ul></ul><ul><ul><li>six nominated by Mittal </li></ul></ul>Mittal Steel Company
    5. 5. Chief Executive Officer <ul><li>Lakshmi Mittal, Born in India (1950) </li></ul><ul><li>Graduated in Arts from Calcutta </li></ul><ul><li>Established first Facility in Philippines in 1976 </li></ul><ul><li>Widely recognized for his leading role </li></ul><ul><li>Executive positions in several companies </li></ul><ul><li># 1 richest person in Europe </li></ul><ul><li># 4 richest person in the world </li></ul><ul><li>Personal fortune of US $45 Billion </li></ul>Mittal Steel Company
    6. 6. Awards <ul><li>2008 Padma Vibhushan, Second Highest Indian Civilian Honor </li></ul><ul><li>2007 Asian Business Award, Middle East </li></ul><ul><li>2007 Bessemer Gold Medal, Institute of Materials, Minerals & Mining </li></ul><ul><li>2006 Person of the Year – Financial Times </li></ul><ul><li>2004 European Businessman of the Year – Fortune Magazine </li></ul><ul><li>1998 Willy Korf Steel Vision Award – American Metal Market & PaineWeber’s World Steel Dynamics </li></ul><ul><li>1996 Steelmaker of the Year – New Steel Organization, USA </li></ul>Mittal Steel Company
    7. 7. Global Presence Mittal Steel Company Cuba Mexico France Germany Romania South Africa Macedonia Poland Algeria HQ USA Canada Czech Republic Bosnia Italy Ukraine Kazakhstan Brazil
    8. 8. Employees by Global Regions (Numbers in Thousands) Mittal Steel Company Years 2003 2004 2006 2007 2008 Americas 11.2 10.4 9.7 24.3 35.6 Europe 4.7 41.8 79.3 128.2 130.4 Asia & Africa 64.3 64.1 75.4 71.8 90.8 Total 80.2 116.3 164.4 224.3 256.8
    9. 9. Facts & Figures Mittal Steel Company Income Statement (Numbers in Millions)
    10. 10. Shareholders Mittal Steel Company As of December 31, 2007, authorized common shares were consisted of 1,470,000,000 shares, while 1,448,826,347 common shares were issued and 1,421,570,646 shares were outstanding. Stock Exchange Symbol: MT Stock Exchanges (2007) New York $ Amsterdam € Paris € High Low High Low High Low First Quarter 54.35 39.59 41.03 30.02 41.03 30.02 Second Quarter 66.90 52.41 50.08 38.15 50.08 38.15 Third Quarter 79.24 51.18 55.80 37.55 55.80 37.54 Fourth Quarter 83.88 67.68 58.26 45.67 58.25 45.70 Average 71.09 52.72 51.29 37.85 51.29 37.85 Current (Saturday)   85.33   53.37   53.30
    11. 11. Global Steel Market <ul><li>Consumption is highly cyclical </li></ul><ul><li>Annual consumption growth of 1-2% in the developed countries </li></ul><ul><ul><li>Slow growth in the major markets </li></ul></ul><ul><ul><ul><li>Construction </li></ul></ul></ul><ul><ul><ul><li>Automobiles </li></ul></ul></ul><ul><ul><ul><li>Mechanical engineering </li></ul></ul></ul><ul><li>Annual consumption growth in China of >13% </li></ul><ul><ul><li>Representing 25% of world market </li></ul></ul><ul><li>Primary advantage is steel’s low cost </li></ul><ul><ul><li>Competition from substitute materials </li></ul></ul><ul><ul><ul><li>Aluminium </li></ul></ul></ul><ul><ul><ul><li>Plastics </li></ul></ul></ul>Mittal Steel Company
    12. 12. Shipment by Countries (Numbers in Thousands of shot Tons) Mittal Steel Company
    13. 13. Steel Producers’ Ranking (Numbers in Million Metric Tons) Mittal Steel Company
    14. 14. Business Strategy <ul><li>Pursuit of constant restructuring and cost-cutting </li></ul><ul><li>Moving away from commodity steel production </li></ul><ul><ul><li>Specialization </li></ul></ul><ul><ul><li>Higher value added production </li></ul></ul><ul><li>Growth strategies </li></ul><ul><ul><li>Growing market required </li></ul></ul><ul><ul><li>Sufficient cost advantage </li></ul></ul><ul><li>New technologies </li></ul><ul><li>Changing mindsets from regional to global </li></ul><ul><ul><li>Mergers resulting in major industrial rationalisation </li></ul></ul>Mittal Steel Company
    15. 15. Cost Reduction Strategy <ul><li>To maintain our position in the lowest cost quartile </li></ul><ul><li>Initiatives aimed at cost reduction, through: </li></ul><ul><ul><li>Operating efficiency improvements </li></ul></ul><ul><ul><li>Raw materials & procurement initiatives </li></ul></ul><ul><ul><li>Increased labor productivity </li></ul></ul><ul><ul><li>Newcastle PCI project </li></ul></ul>Mittal Steel Company
    16. 16. Conclusion <ul><li>Our strategy is aimed at creating value through the steel cycle </li></ul><ul><li>Improving our operating capabilities </li></ul><ul><ul><li>Improving our cost competitiveness </li></ul></ul><ul><ul><li>Growth through optimal capital expenditure </li></ul></ul><ul><li>Focusing on global marketing efforts </li></ul><ul><li>Creating an a high performance culture </li></ul><ul><li>Be a responsible corporate citizen </li></ul>Mittal Steel Company
    17. 17. Athar Hussain Kings Graduate College of Business New York, USA Presented By Answers Questions &