2. Introduction
ďśWith 119 million tonnes of annual production
capacity and 245,000 employees across 60
countries, ArcelorMittal is the worldâs leading steel
and mining company.
ďśChairman and CEO: Lakshmi Mittal
ďśCFO: Aditya Mittal
ďśHeadquarters: Luxembourg City
ďśRevenue: US$ 84.213 billion (2012)
ďśOperating income: US$ -3.226 billion(2012)
ďśProfit: US$ -3.726 billion (2012)
ďśRanked: 70th on the Fortune Global 500
3. Vision and Mission
Vision
To be leaders in providing recreation and learning
facilities and opportunities which promote stakeholder
wellness.
Mission
ď Producing safe, sustainable steel.
ď Pursuing operational excellence in all business processes.
ď Producing innovative steel solutions for our customers.
ď Caring for our environment and the communities in which
we operate.
ď Living the brand values of Sustainability, Quality and
Leadership.
4. Trends in global steel industry
o Consumption of steel increased after 1950 and trend was
continued till 1970
o Consumption of steel started decline from 70s to 80s
o After 80s, demand for steel increased continually
o International Iron and Steel Institute (IISI) forecasted
increment in demand for steel from 1.32 billion tones (in
2010)to 1.62 billion tones(in 2015)
o This demand was increased from countries like India and china
o To capture this demand, biggest steel producer of India (TATA
Steel ltd.) has been increased its production base by acquiring
4th largest steel producer of world(Corus steel)
5. What ArcelorMittal Produces
ďFinished, semi-finished, long and flat products, such as:
-Slabs, Hot and cold rolled coil
-Coated steel products
-Tinplate and heavy plate, Rails
-Wire rod, sections, sheet piles etc
6.
7. Business Strategies
ďąArcelorMittalâs success has been built on:
Three-dimensional strategy for sustainability
and growth.
ďąGeographical diversification
ďąProduct diversification
ďąValue Chain: Plans to continue upstream and
downstream integration
ďąMergers & Acquisitions have historically been
a key pillar of ArcelorMittalâs strategy
ďąBe a responsible corporate citizen
8. Mission & Objectives of
ArcelorMittal University
Transforming tomorrow through
the development of all our employees.
Build the ArcelorMittal culture
and share best practices
âGrowâ our
own
future leaders
Attract, retain
and develop
talent
Target the excellence
in functional expertise
Increase
networking
Bring support to
local training
centres
9. The Deal
ďźJanuary 2006 : Mittal Steel offers the shareholders of
Arcelor to create the world's first 100 million tonnes
plus steel producer.
ďźThe deal valued at $22.7 billion offer to Arcelorâs
shareholders
ďźBut soon the deal landed into controversy.
ďźDeal finally clinched when the shareholders of Arcelor
agreed to Mittal Steelâs offer â In June 2006
ďźMittal raised its valuation of Arcelor to $32.9 billion.
10. CST
ArcelorMittal
The result of numerous mergersâŚ
Global acquisition
Upstream integration
Consolidation Europe
Downstream Integration
Regional leadership Eastern Europe
Increase presence in Asia and Africa
Regional leadership South Am.
Leadership in value added
Leadership in value added
Capture growth
and increase presence in growing market
Continued consolidation:
11. Analysis
⢠Segmentation: Steel markets
⢠Target Group: Industries including
Construction, automotive, house hold
appliance and packaging
⢠Positioning: Worldâs safest steel and mining
company.
12. SWOT
⢠Strength
â Expertise in acquisition & mergers
â Security of supply of raw material
â Strong Research & Development team
â Worldwide reach to optimize service across the
company
â High quality operations with economies of scale
â World's largest steel manufacturer with over
245,000 employees
⢠Weakness
â Cost of environmental hazard
â Issues of debt to equity ratio
13. ⢠Opportunities
â Continue investment in mining operations
â Acquisitions and joint ventures in developing
countries like India and China
â Creating flexibility in operations
⢠Threats
â Government and environment regulations
â Rising labor cost
â High competition
14. PESTEL Analysis
ďPolitical
ďArcelorMittal operates, or proposes to operate, in a
large number of developing countries.
ďPolitical systems in developing countries are vulnerable
to their populationsâ dissatisfaction, social and ethnic
unrest and changes in governmental policies
ďEconomic
ď ArcelorMittal operates and sells products globally
ď As a result, its business, financial condition affected by
fluctuations in exchange rates.
ďSocial
ď ArcelorMittal is already concentrating in the areas of safety,
health, social dialogue, and environment.
15. ďTechnological
ď Employs 1,200 researchers in 13 research centres around the world,
Develop a revolutionary steelmaking process
ď Car manufacturers want to reduce the weight of their vehicles by
using thinner, but stronger steel ensuring good deformability.
ďLegal
ď ArcelorMittal is subject to stringent health and safety laws and
regulations that give rise to significant costs and liabilities
ďEnvironmental
ďArcelorMittal supports the European Regulation of 18
December 2006 concerning the Registration, Evaluation,
Authorization and Restriction of Chemicals (REACH)
ďArcelorMittal is set to become the largest beneficiary of
the EU Emissions Trading Scheme
16. Major Marked Situation
ďRising demand from china and India
ď2012 London Olympic ,huge demand of steel
ďIncreasing demand from America
ďExpected growth rate 6.5%
ďChina $585bn stimulus package for
infrastructure.
17. Competitors
ďTATA STEEL, India
ďUNITED STATES STEEL CORPORATIONS, USA
ďBAOSTEEL GROUP CORPORATION, China
ďNIPPON STEEL & SUMITOMO METAL, Japan
ďJFE HOLDING, Japan
ďPOSCO, South Korea
18. ď§ ArcelorMittal selected by Technip to supply highly-resistant steel wires for
the development of oil
ď§ Arcelor Mittal 2Q results show fall in earnings
ď§ ArcelorMittal SA and Kumba in talks on new iron ore supply deal
ď§ ArcelorMittal sells majority of Algerian unit to state
⢠http://townhall.com/news/business/2013/08/01/arcelor-mittal-2q-
results-show-fall-in-earnings-n1653837
⢠http://www.reuters.com/article/2013/09/29/us-arcelor-algeria-
idUSBRE98S06U20130929
⢠http://www.platts.com/latest-news/metals/london/arcelormittal-sa-and-
kumba-in-talks-on-new-iron-26316571
19. ⢠It is the Worldâs leading, Worldâs safest steel and
mining company.
⢠ArcelorMittalâs Business Strategy of Mergers &
Acquisitions is the main reasons for growth of the
company.
⢠Arcelor Merger happened at the valuation of US$
32.9 billion.
⢠Three-dimensional strategy for sustainability
leads the company ahead of others.
⢠It has a revolutionary steelmaking process