Vijay Mallya (born December 18, 1955) is an Indian businessman and Rajya Sabha MP. The son of industrialist Vittal Mallya, he is the chairman of the United Breweries Group and Kingfisher Airlines, which draws its name from United Breweries Group’s flagship beer brand, Kingfisher.
Mallya receives substantial press coverage that focuses on his lavish parties and his yacht, the Indian Empress.
Business
He took over as Chairman of the United Breweries Group in 1983. Since then, the group has grown into a multi-national conglomerate of over sixty companies with an annual turnover which has increased by 439% to US$1.2 billion in 1998-1999 . The focal business areas of the group encompass alcoholic beverages, life sciences, engineering, agriculture, chemicals, information technology, Aviation and leisure.
In May 2007, United Breweries Group announced the all-cash acquisition of scotch whisky maker Whyte & Mackay for 595 million pounds (approximately Rs 4,819 crore).
Political career
He entered politics in 2000 and superseded Subramaniam Swamy as the president of Janata Party, a breakaway faction of the original Janata Dal party. His party contested almost all of the 224 seats during the Karnataka State legislative election. He campaigned vigorously through the media, but his party failed to make any impact and did not win a single seat. Following the party’s failure in the elections, it has been largely ignored by the media.
Kingfisher Airlines
In 2005, Vijay Mallya established Kingfisher Airlines. In a short span of time, Kingfisher Airlines carved a niche for itself. It was the first airline in India to operate with brand new aircraft. It is the first Indian airline to place orders for the Airbus A-380. At present, the airline connects 29 cities.
Mallya also owns the East Bengal Football Club, in Kolkata.
Brilliant orator and sportsman, VIJAY MALLYA has won trophies on the professional car racing circuits and is a keen Yachtsman and aviator. He is involved in a variety of sport by way of personal participation as well as promotion of sport and cultural activities by steering various sponsorships. Amongst his museum collection of historic rare automobiles are Jaguars, Ferraris, Alfa Romeos and Mercedes Benz.
THE HOUSE OF MALLYA THE HOUSE OF MALLYA GROUP FOUNDER: VITTAL MALLYA (1924-1983).YEAR OF FOUNDING: 1948.CHAIRMAN: VIJAY MALLYA, 41 (SON)FLAGSHIP: MCDOWELL & CO.MAIN BUSINESSES: LIQUOR, ENGINEERINGM, CHEMICALS, FERTILISER.
Luxury On Wheels
Indian tycoon sure knows how to throw a party. A week after bagging Scotch whisky maker Whyte & Mackay Ltd. for $1.2 billion on May 16, the 51-year-old chairman of India’s UB Group Ltd. staged one of his epic bashes aboard his 311-foot yacht, the Indian Empress, anchored off the French Riviera.
Among the 300-odd guests were steel baron Lakshmi Mittal and other Indian industrialists, European aristocrats, and celebrities such as American hip-hop artist Jay-Z. A DJ flown in from Mumbai spun Bollywood tracks. And while Indian dishes were served, the wine that flowed all night came from the Loire cellars Mallya acquired last year.
Mallya, you might say, is Indias Sir Richard Branson. Like the British entrepreneur, he has a larger-than-life personality and owns a slew of businesses, from breweries (his Kingfisher beer is a staple of Indian restaurants from Kolkata to Cleveland) to Kingfisher Airlines, a leading Indian carrier. UB Group is the worlds No. 3 spirits conglomerate, after Diageo PLC and Pernod Ricard. Mallyas empire also spans engineering, fertilizers, and petrochemicals. Among his personal investments are thoroughbred horses, a game lodge in South Africa, and small newspapers in the San Francisco Bay Area. “I’m not making money on [the papers], but it’s a fun business to be in,” he says. Mallya’s latest move: a May 31 takeover bid for Indian low-cost carrier Air Deccan.
Even in a country thats minting millionaires by the hundreds, the silver-maned liquor baron is in a class by himself. His net worth is estimated at $1.5 billion-a figure he doesn’t quibble with. And hes not shy about flaunting his wealth, with a collection of 42 homes scattered across the world, 250 vintage cars, a customized Boeing 727 and two other corporate jets, and three yachts-including the Kalizma, a 165-footer once owned by actor Richard Burton. “Everybody calls me flamboyant, as though it’s my middle name, but I’ve always been the way I am,” he says during an interview at his sprawling, 10-bedroom Mumbai home overlooking the Arabian Sea. Mallya is dressed down, in jeans and a bright red T-shirt emblazoned with the Kingfisher insignia.
EMPIRE AT 27
Despite Mallya’s obvious success, his freewheeling lifestyle long cost him the respect of India’s straitlaced business community. Mallya was only in his 20s when his father died in 1983, leaving him in control of an empire with annual revenues of $100 million. He spent the next two decades winnowing the 22 businesses he inherited-ranging from a brewery to a drugmaker to a battery manufacturer-to just a half-dozen. Those he kept, though, have flourished. Today, revenues for the UB Group run to $1.2 billion. Yet for years, Mallya was dogged by allegations that he dipped into his companies’ coffers to fund his lavish lifestyle, something he vehemently denies. “I was born with a silver spoon, so why should I spend the company’s money?” he says.
It wasn’t until Mallya launched Kingfisher Airlines in 2005 that he earned the corporate acceptance he craved. With its seatback video screens, smartly dressed flight crew, and attentive service, Kingfisher raised the bar for domestic Indian carriers. The five Airbus A380 superjumbo jets Mallya has on order will surely generate additional buzz. After the Deccan acquisition, Kingfisher will be in a strong position to take advantage of an expected doubling in India’s air passenger traffic, to 60 million, by 2010. “Mallya has become an important part of Corporate India,” says Vijay Chugh, an analyst at JPMorgan Chase & Co. in Mumbai. “The airline business has changed his profile completely.”
Now, he’s aiming to go global. Mallya hopes to begin Kingfisher flights to the U.S. and Britain by the end of the year. He’s also stocking up his liquor cabinet. The Whyte & Mackay acquisition gives him an international brand in spirits to add to the French wineries he bought last year from Champagne Taittinger. (He wanted the bubbly, too, but was rebuffed.) The spate of dealmaking has powered a 150% increase in the market capitalization of his eight listed companies over the past year, to $3.5 billion.
Still, Mallya remains quintessentially Indian. He refrains from negotiating during Rahukalam, the hours during the day that some Hindu faithful believe are unlucky. And he has his planes blessed at Tirupati, a Hindu temple in southern India, before putting them into service. That’s not to say, though, that he thinks his current streak is just a run of good luck. “I had to show the world that I was quite capable of standing on my own feet, making money and shareholder wealth,” says Mallya. “And doing,” he adds with a smile, “what the hell I wanted to do.”
Dr Vijay Mallya, India’s most charismatic billionaire hailed the King of Good Times, celebrated the success of his £595m bid for Whyte & Mackay Scotch whisky group in uncharacteristically low-key fashion: a review of the company’s branding, followed by a head-to-head with the Scotch Whisky Association.
“I would have celebrated with a grand party,” said Mallya, as he headed back to India, “but I am on my annual fast, so am 'on the wagon’. I’ve not touched alcohol for six weeks.”
This evening in southern India, however, the wagon will screech to a halt. Mallya – who finds solace in the teachings of Sri Ravi Shankar – will be in Sabarimala in Kerala, where he will join thousands of pilgrims to walk barefoot six miles and climb 18 golden steps to pray to the deity. Then the partying will begin. “I am carrying sufficient stocks of Dalmore single malt and Jura single malt to celebrate adequately tonight,” says Mallya. “Jura was my father’s favorite whisky.” In Mumbai, the stock market couldn’t wait. This week, shares in Mallya’s United Spirits group jumped 33pc.
Hailed the Branson of Bangalore for his high-profile, impressive sweep of interests and soar away Kingfisher Airlines, the world’s fastest growing carrier, Mallya comes on as a warm, friendly, entertaining soul with a brilliant memory. He always cuts a dash: his broad-shouldered frame is topped with grizzled leonine hair, while he is perennially blinged up with gold and diamonds, like a maharaja caricature. Mallya made his first unsolicited offer for Whyte & Mackay last May. Why did the haggling take so long? “They [previous owners Vivian Imerman and Robert Tchenguiz] needed to make up their minds whether to sell,” says Mallya. “That took a few months. Then the price of whisky went up. Given Whyte & Mackay’s huge stocks [independently valued at £350m-£400m], it was like trying to hit a moving target. We had to figure out when to freeze the price. That took another few months. We then did due diligence. And then the whisky price rose. Again.” An informal accord was reached whereby Imerman and Tchenguiz would not conduct an auction for Whyte & Mackay unless Mallya’s bid lapsed. “Ravi Nedungadi, my CFO, and I conducted the price negotiations ourselves.”
Whyte & Mackay, the fourth largest producer of premium Scotch, is “the last whisky company big enough to be worth bothering to acquire”, and accounts for 9pc of the market. Pre-Whyte & Mackay, Mallya’s Bangalore-based United Spirits arm was the world’s third-biggest spirits company on the strength of distribution in India and the Middle East. Post-Whyte & Mackay, his aggregated spirits portfolios vie with Pernod-Ricard for the No 2 spot behind Diageo. Mallya reckons he’ll overtake Pernod-Ricard “in a few months”. “Our premium whisky portfolio is growing in excess of 20pc a year.”
Until now, almost all of Mallya’s whiskies have been molasses-based spirits distilled in India. Whyte & Mackay, however, is the real thing. “Scotch is Scotch,” beams Mallya. “For whisky drinkers, it is the ultimate. Within Whyte & Mackay, we have several brands at different price points. I was amazed to see them. They were in India 20 years ago. I am very excited about relaunching them. Whyte & Mackay is running well, and with our vast distribution in India, we can accelerate that momentum. I’ve spent today redesigning the brands for immediate export.”
The Whyte & Mackay deal puts Mallya in an interesting position. Scotch is “liquid gold” in India, but heftily tariffed. To protect his Indian whisky portfolio, Mallya has staunchly opposed efforts by the Scotch Whisky Association to abolish the tariffs. Now, he finds himself in both camps.
There have been other tiffs with the SWA, chiefly relating to Mallya’s Scottish imagery on his Indian brands, and even his use of “whisky” for molasses-based spirits. (“They cannot have proprietorial rights over whisky,” he has fulminated. “If the end product tastes like whisky, you cannot challenge that it is not whisky.”)
But now is not the time for reviving old spats. Relations with the SWA are as smooth as Dalmore 40-years-old. “Gavin Hewitt, chief executive of the SWA, called on me today,” says Mallya. “He said he would be delighted to invite me as a member. I agreed and said, 'let’s bury our previous differences.’ ”
Mallya plans to spend one week a month in Scotland, staying at his Keillour Castle in Perthshire, while overseeing the transitional phase of Whyte & Mackay. Meanwhile he has other business to attend to. Mallya’s empire runs from property via pharmaceuticals, fertilizers, South Africa game lodges and tropical islands to racehorses, politics (he is a member of Parliament in India’s Upper House), motor sport, super yachts, private jets and a classic car collection.
His greatest business passion, however, is Kingfisher Airlines, the all-frills carrier he founded in 2005 based on his Kingfisher beer brand. Kingfisher’s 30-strong fleet operates 168 daily flights. The “guest experience” includes valet service at check-in, live in-flight satellite television, goody bags and “the prettiest air hostesses in the sky”. Mallya can hardly wait to take Kingfisher global. The inaugural flight to London is pencilled in for next January.
He has placed one of the largest ever orders of Airbus aircraft: 50 so far. A source close to this deal says Mallya has uniquely ordered A320, A330, A350 and A380 aircraft: “No other customer has ever done that. Most buyers are more cautious than Mallya. The airline industry is booming in India but it is badly served in capacity and customer service. Mallya recognizes that this is a great opportunity for someone prepared to make a long-term commitment.”
Staying calm in the face of a physical, mental or financial challenge is a Mallya trait. His friend SD Lalla describes his as having “nerves of steel, a heart of gold, the shrewdness of 10 marwaris [Indian business leaders] put together and naïve as a kid when he wants to be.”
There are two distinct themes to Mallya’s rise.
One is a flare for audacious and very precise deal making. His late father Vittal Mallya, son of an Indian army doctor, bought shares in United Breweries when prohibition was mooted. Believing prohibition to be unworkable, he snapped up rival breweries at depressed prices. He was proved right. Plans for prohibition were dropped five years later, and Mallya’s brewing empire took off.
Upon Vittal Mallya’s untimely death by heart attack in 1983, Junior took charge aged 27. Bedeviled by a “playboy” tag and subject to a “humiliating” tax investigation in 1985 (charges were never pressed; he was exonerated), Mallya exiled himself to London. In 1988, he persuaded HSBC to fund a 100pc leveraged bid for Berger paints. He sold Berger in 1996 at a $66m profit. “I went to my mother and said, 'now, if I buy a plane or yacht or fast car, no one can ever complain.’ I felt a huge sense of accomplishment. The Indian media stopped all this playboy nonsense.”
In 2005, Mallya showed a more relentlessly calculating side. In 1985, Shaw Wallace, India’s second biggest spirits company and a boxwallah hangover from the British Raj, was bought by Manu Chhabria , a pugnacious self-made tycoon based in Dubai.
“We became bitter rivals,” said Mallya. “Ever since then, I wanted to buy Shaw Wallace.” Upon Chhabria’s death in 2002, his family specifically excluded UB from buying the company. “I went hostile,” says Mallya.
“It was a high-risk strategy. I had waited 20 years. Shaw Wallace transformed my drinks business. It gave us 60pc market share in India and improved profitability because both companies had been spending crazy sums competing.” The other theme behind Mallya’s success is his grasp of the transformation in lifestyles in India today. Flicking through an archive at United Breweries in the 1970s, Mallya chanced upon the Kingfisher beer label. “I read up the history of Kingfisher,” he says. “It was launched in 1865 and transported in hogsheads. I found something exciting about its vibrancy and cheekiness. I asked my father for 1m rupees (£12,000) to relaunch the brand and was shown the door. I was later given enough cash to launch it in Bangalore.”
While conducting market research by canvassing people outside cinemas, Mallya stumbled on an important point. “India is the youngest nation in the world. We have 500m people under 25, and 400m under 20. India has 1m university graduates each year. Today, these people are getting jobs in industries that didn’t exist in my time, in software and biotech. They want to live like kids in Europe with satellite TV, cars, bars and restaurants.” This intelligence has served Mallya well.
Next weekend, having propitiated the deity and recovered from his party, Mallya will watch the Monaco Grand Prix from his 95m yacht Indian Empress. Kingfisher Airlines sponsor the Toyota team. His mind, however, may be on his struggle to unite the two rival Indian national motor sports factions both of which he chairs, before hosting India’s first F1 grand prix in 2009 or perhaps looking up at the skies.
As Mallya says, he wants for nothing “but my ultimate objective is to pilot a Kingfisher Airlines A380 super jumbo”.
Formula 1 in New Delhi
Mallya now wants to bring a Formula 1 race to India as the Indian Grand Prix. New Delhi is the target, with a street-race being the favorite of Mallya, track designer Hermann Tilke[2] F1 boss Bernie Ecclestone[3] and Delhi CM Sheila Dixit. F1 track designer Hermann Tilke has designed a layout for a street-race like Monaco in New Delhi. [5] The plan is to have the first Indian F1 race in 2009. Tilke has previously designed F1 tracks in Turkey, Shanghai, Bahrain and Malaysia. [4]
Track design
The setup cost of the race would be at least U$100 million. [5] This is considerably less compared to building a brand new track specifically for car racing. Tilke wants the cars to go around India Gate and down Rajendra Prasad Rd. [6]
Achievements
Contributions to: The Victoria and Albert Museum, London; Prince's Youth trust; and the Duke of Endinburgh Awards Scheme.Establishment of Mallya Hospital in Bangalore.Helped to fund the Mallya Aditi International School, a prestigious private school in Bangalore.Successfully bid for a sword of Tipu Sultan of Mysore, and brought it back to India.[6
MARKET ANALYSIS
Kingfisher : The King Of Good Times
Kingfisher is a classic case of branding success. This brand can even be termed as an iconic brand. A brand that had extended itself from beer to airlines can be equated to the Virgin brand. The brand is synonym with Beer in India. Now ask a young man from India what a Kingfisher is ? The most likely answer will be either Beer or Airline. The power of the brand has virtually made the bird a brand extension.Kingfisher is a brand from the UB group stable.It is the largest selling beer brand in India commanding a market share of over 28% in the Rs 5000 crore Indian Beer market.The brand epitomises energy, youthfulness ,enthusiasm ,freedom but with a touch of professionalism.
United Breweries (the original name of the group) have a history dating back to 1857. The company came into existence as UB in 1915 with the merger of five small breweries . The Kingfisher brand was launched in the year 1980 ( the exact year of the birth of Kingfisher is not known,80's marked the real life of this brand).
The brand was the brain child of the current Chairman of UB group Mr Vijay Mallya. Reports says that Mr Mallya went to work in Calcutta as a part of mentoring program under Mr HP Bhagat. At that time the brands that were popular from UB stable was Kalyani Black label, Doctor's Brandy etc. Mr Mallya wanted to create an exciting brand and none of the existing brands did not impress him. He went back to Bangalore,searched archives and stumbled upon an old label with a Kingfisher in it. That marked the birth of the Iconic Kingfisher brand.
The major factor behind the success of Kingfisher brand is the Passion that Mallya have on the brand. When marketing theorists says that Marketing is a serious business, Mallya will tell you that Marketing is CEO's business. When the CEO takes interest in the brand and virtually promotes the brand in every occasion, there is so much equity generated on the brand. Like Virgin's legendary Richard Branson , Mallya also showed that the primary task for any CEO is to be passionate about the brand. While in most cases CEO comes into picture to deliver the annual shareholder's meet, Mr Mallya takes the brand with him everywhere.
Kingfisher brand is a unique marketing success story because it thrived in an environment where liquor/ beer advertising was banned in India. The owners have built the brand circumventing the ban on promotion. During 1997 , the brand roped in Ajay Jadeja and Sourav to feature in the campaigns. In 1996 the brand become the worldwide sponsors of the West Indies cricket team. But the brand was conscious to keep Kingfisher the star . The West Indies team personified the brand values of fun loving but successful team. The famous jingle " Oola la le lo" and the fun filled TVC rightly placed the brand as a fun loving one. Unlike brands like Pepsi which is focused on cricket, Kingfisher promotes all sports and the brand sponsors football stars and even Formula 1.
The brand directly talks to people who are Easy going, chilled out person who's always willing to take a break and party with the friends. But they are very professional and successful .Most of the business reports try to relate the persona of Mr Mallya and the brand which I feel is unjustified. The brand Kingfisher does not derive any thing from the personality of Mr Mallya. The brand has its life of its own. Since the chairman is passionate about the brand, he takes personal interest in the brand . Other than that relating the person and the brand and trying to say that Mr Mallya is more flamboyant than the brand is doing unjust to the brand.
The brand also have a 360 degree approach to promotions tapping all possible ways to communicate with its target audience. The brand sponsors lifestyle events and the Kingfisher Calender has attained a cult status with in 4 years of launch. During 2003-04 the brand logo got a make over and the Kingfisher started flying rather than sitting. The new logo signals the brand's vision to get to new heights. The new logo designed by Claessens was backed with lot of noise in the media.
To circumvent the regulatory ban on surrogate advertising, the brand has launched into different categories like Mineral water and even into readymades taking a lesson from Wills.
2005 saw the UB group getting into the Airline business with its Kingfisher Airlines.The airlines became a brand to reckon with with in a year because the brand lived to its expectation and promise. Positioned as a funliner, the brand equity of the mother brand has been enhanced by this Extension ( can i call it an extension?).
Behind the glamour of swimsuits and parties , one should not forget the strategies that made the brand a super brand. The distribution and the point of promotion strategies of KF is excellent. The brand has maintained international quality but made sure that it is with in the reach of the Indian consumer.
Lot of entrepreneurs are jumping in. But how many will survive? Starting a low-cost airline is not the most difficult part, say analysts. For example, to start a low-cost service with nationwide operations, the cost will typically be between $20 million and around $40 million, depending on the scale of operations (a full-scale carrier will need investment of around $70-80 million), assuming that the airplanes are leased. A regional service can be started at a much lower cost - say around $10-15 million. CAPA's Kaul says, normally, low-cost carriers can break even in year two or, at most three. Depending on the model followed, the ability to keep costs low and the offer of an on-time service at an affordable price, despite the infrastructure constraints, will be the critical factor in deciding whether a new player survives or not. And this is particularly difficult in India, as many players are beginning to realize.
One issue that the new entrants have to tackle is that of confused identity. Many are not following the cost discipline that low-cost carriers worldwide follow. These include weighty entrants like Kingfisher who are calling themselves "value carriers" - and offering frills like free food and entertainment despite low fares. Others like Indus Air and East West told BW that they would not be like Deccan - though they were not sure how exactly they were going to be different. Says Kingfisher's CEO Alex Wilcox: "Low cost in India now implies you've hit the bottom of the barrel. Shoddy service, selling even drinking water on board, and always late. But we are offering you the most spacious seats and entertainment."
Aviation industry experts are skeptical of whether these "halfway houses" can work at all. Very few passengers in India, they say, will pay more to be entertained or watch TV on an hour-and-a-half flight. Jet Blue in the US succeeded with this model but their audience is far more mature. The travel distances too are much longer. In fact, Kingfisher had to cut prices soon after its launch to come close to the price levels offered by Spice Jet. Company sources admit that sales in the first week before the price cut were quite lackluster.
Others point out that it is hard to see how Kingfisher's model will be low-cost when they are paying close to Rs 100 crore to the Indian Airlines to do their ground handling, have spent extra on fitting every seat with a screen, and serve free hot meals. This is rumored to be one of the reasons behind the differences between Wilcox and his colleague.
"Value carrier" is how Vijay Mallya defines Kingfisher Airlines
Wadia, for one, is convinced that the only model that can work in India is the one that offers the cheapest possible prices. "Price is the critical deciding factor. I want to follow the Ryan Air model and offer the cheapest fare. I know Kingfisher is offering a Kingfisher class. Good luck to them," he says.
One of the reasons Kingfisher is distancing itself from the term 'low-cost' is because it feels that Air Deccan's service in the last two years has given 'low cost' a bad name - flights are often late and cancelled and service is poor. There have been instances of irate passengers holding Air Deccan officials by the collar, swearing never to fly the airline again.
This may be partly the fault of the carrier - it has spread itself thin with minimal staff to keep costs low - but a large part of the blame also lies in poor airport infrastructure, even in the metros. There are too few landing slots and the race to grab them has only just begun.
Air Traffic Controllers (ATCs) in India have been used to handling only a limited number of flights all these years. Many systems are still not automated and the scope for human delays and errors are larger now with too many flights taking off and landing.
The problem of poor infrastructure is supplemented by the shortage of skilled personnel. As of today, 8 or 10 aircraft belonging to the public and the private carriers in India are grounded due to shortage of pilots. Projections by CAPA for India indicate a requirement for some 3,000-4,000 additional pilots, and over 5,000 maintenance workers in the next 5-7 years. Says Kaul: "The shortage of skilled manpower will have serious repercussions on the growth of India's airline industry."
Wednesday, November 7, 2007
LAKSMI MITTAL- STEEL BARON
Lakshmi Mittal: Rise of a titan
By Sify News Desk Friday, 18 June , 2004, 15:52
The man owns the LNM Group, the world's second largest steel producer with integrated steelmaking facilities in 12 countries, and is said to be Britain's wealthiest Asian. Yet, surprisingly, very little is known about him in the country where he was born. Meet Lakshmi Mittal.
Born in western Rajasthan, Mittal, 47, made his money in the unglamorous world of steel. Mittal's spectacular deal with the Chicago-based Inland Steel, which amounted up to $1.4 billion, was a hot topic for months on in UK's business circles.
But there was nothing spectacular about his origins. Mittal was born in an obscure village that did not even have electricity. Later, his family moved to Calcutta. In 1970, he graduated from the prestigious St Xavier's College specialising in Commercial Studies. Even while studying, Mittal worked for his father, Mohan Lal, who ran a small family-owned steel mill. After his graduation, he went on to work full-time for his father as a trainee.
He is known as a workaholic, who did not even hesitate to decline an invitation to a party called to honour UK's wealthiest Asians. Mittal, who was too busy tying up a deal in Chicago, decided to give the party, chaired by British Prime Minister Tony Blair, the go-by.
Despite the emerging threat from China, which Mittal thinks would be the world's largest steel producer soon, his friends claim that the steel baron will let nothing stand in the way of his ambition of creating the "world's largest and best-managed steel producer."
The zeal to be the best in whatever he does perhaps comes from his disciplined lifestyle. Mittal, who does an hour of yoga every day, says he owes a lot to his Asian roots.
In an interview with Fortunemagazine, he said: "Being an Indian is a real advantage . . . you learn a lot about bridging differences and reaching compromises when you grow up in a country with over 300 languages and ethnic groups."
Quiz him why he has lived outside India since 1976 and he points to the red-tapism that exists in India. Bureaucracy at least doesn't bother him in the UK, where his success has largely been built on buying loss-making state-owned mills and turning them into profit-making ones.
His first success story was in 1989 when he bought Trinidad and Tobago's steel facility, which was losing $one million a day. Within a year after its purchase, Mittal doubled the output and made the business profitable.
His secret of success is a combination of technological vision and good managerial sense.
Despite his remarkable rise, Mittal is known for maintaining a low-profile. Britain's wealthiest Asian, is also its eighth richest citizen. He owns a six million sterling pound worth mansion on Hampstead's millionaire row.
His illustrious neighbours on the Bishop's Avenue include the Sultan of Brunei and King Fahd of Saudi Arabia.
Mittal's group, including LNM Holdings N.V. and Ispat International N.V., has approximately 120,000 employees world-wide from over 45 nationalities and supplies the highest quality steel to demanding customer segments. Ispat International N.V., is listed on the New York and Amsterdam Stock Exchanges. LNM Holdings N.V. has steelmaking interests in Kazakhstan, Romania, Algeria, Czech Republic and South Africa. There are substantial synergies from its relationships with Ispat Indo’s steel plant in Indonesia and Ispat International N.V, which has highly efficient, modern steelmaking operations in the United States of America, Canada, Mexico, Trinidad and Tobago, Germany and France.
Lakshmi Mittal’s House – The most expensive residential real estate deal ever done.
Earlier we reported about Updown Court, the world’s most expensive house and Donald Trump’s Florida Mansion, the most expensive house in the USA. Although these two mansions have the titles of being the most expensive houses, they still have to be sold. No body has ever paid that much ($139 million and $125 million respectively) for a residential building. Then who was the person that forked over the most amount of money in a residential real estate transaction?The answer is Lakshmi Mittal, the Indian steel tycoon and the world’s fifth richest billionaire. His London residence at 18-19 Kensington Palace Gardens was bought from Formula One Boss Bernie Ecclestone in 2004 for a staggering $114.89 million (£62.7 million). And for while the house held the Guinness World Record for the world’s most expensive house. The Mittal/ Ecclestone deal still hold the record as the biggest of its kind.
Another interesting fact: Prince Talal Bin Waleed's palace racked up a construction bill of over $200 million when it was build in the late 80’s. But the palace belongs to his country and not to him per se, so his residence cannot be counted as a “private residential house”.
Labour backers head Asian rich list
Lakshmi Mittal heads the list despite losing £100m
"Steelgate" tycoon Lakshmi Mittal and passports row billionaires the Hinduja brothers have been named Britain's wealthiest Asians.
The controversial Labour backers take the top two spots in a list of 275 millionaires compiled by the Asian Xpress newspaper.
The list underlines the increasing influence of the Asian business community in Britain, with those named worth a combined £9.5bn - an increase of £1bn over the past year.
Membership of the exclusive club is also growing - with the 50 new entries worth £560m between them - and at least £5m each
Lakshmi who? Ispat what? If the name of Lakshmi Mittal and his company Ispat International doesn’t exactly flow from the tip of your tongue the chances are you are not alone. For a decade ago you could barely locate Ispat on the map of international business. But by integrating new facilities with existing capabilities Ispat International has leapfrogged past its opponents to become the first truly global steel company. THE PRIVATELY OWNED LNM GROUP, OF WHICH ISPAT INTERNATIONAL IS A MEMBER, IS THE WORLD'S FOURTH LARGEST PRODUCER. THE GROUP PRODUCED OVER 77 MILLION TONNES OF STEEL IN 1998 WHICH MAKES IT LARGER IN SIZE TO MOST OF EUROPES'S LEADING PRODUCERS, INCLUDING BRITISH STEEL. With annual revenues of approximately SIX BILLION DOLLARS and over 80,000 employees on the payroll, Mittal’s group has a capacity of over TWENTY million tonnes of liquid steel – making it the world’s only truly global steel conglomerate. Not bad for a company which only started life in the 1980s.
Ispat is nothing if not quirky. Run by a man from Calcutta, the company is incorporated in the Netherlands and has its headquarters in London. It produces steel in Europe, as well as in North and South America, and uses its own ocean-going fleet to ship goods to customers all over the world.
The nub of Mittal’s strategy? He cheaply buys up struggling state-owned mills that budget-minded governments no longer want and squeezes greater productivity out of them by spending on new technology and sending in competent private-sector management. Mittal has earned a formidable reputation as a dealmaker extraordinaire - as he set about acquiring steelworks in Canada, Ireland, Germany, Mexico and Trinidad.
He bought the troubled Irish Steel for one token Irish punt, although he agreed to pay off millions in back debt. He snagged Mexico’s loss-making Sicarsta mills in 1992 for $220 million; the Mexican government having built it for $2 billion less than a decade before. Nor can you accuse Mittal of not being sufficiently hands on – having bought Sicarsta he moved to Mexico for nearly six months, living on-site and personally developing a business plan to make the division profitable.
OTHER STEEELMAKING ASSETS OF THE LNM GROUP include Ispat Karmet in Kazakhstan and Ispat Indo in Indonesia. Over the last 8 years, Ispat International has acquired six major steelmaking facilities. Its main operations include Ispat Mexican, SA de C.V., Caribbean Ispat Limited, Ispat Sidbed Inc., Ispat Hamburger Stahlwerke GmbH, Ispat Stahlwerk Ruhrort GmbH, Ispat Walzdraht Hochfeld GmbH and Irish Ispat Limited. From 1989 to 1996, shipments have grown from 280,000 tonnes to ELEVEN MILLION tonnes, which translates into a compounded annual growth rate of ALMOST 40%, making Ispat International the world’s faster growing steel producer. In fact shipments are expect to increase to 10 million tonnes by the year 2000 – and that’s excluding any further acquisitions.
Ispat International IS ONE OF of the world’s lowest cost steel producers and the world’s largest producer and consumer of DRI, and of liquid steel using the DRI-EAF-CCM route, and manufactures a broad range of semi-finished and finished flat and long steel products. The DRI-EAF-CCM route, for those who might not be in the know, is the Direct Reduced Iron – Electric Arc Furnace – Continuous Casting Method. It might not have the resonance of Microsoft, lucrative software or biotech start up companies with their genetically engineered drugs – but when a company predicts 25% earnings growth over each of the next five years, investors have demonstrated time and again that they are more interested in returns than marketing and hype.
The Kazakhstan operation is one of the largest single-site integrated steel plants in the world. THE COUNTRY’S LARGEST SINGLE EMPLOYER IS located on the banks of the river Nura, (DELETE AND..) covers about 5,000 hectares and has a steel making capacity of 6.3 million tonnes per annum. Access to Kazakhstan’s abundant supplies of raw materials such as coal, iron ore and energy P.T. Ispat Indo was the first member of the LNM Group – established by Mittal in Indonesia in 1976. He was just 21 years old at the time. The company was set up as a 60,000 tpa greenfield project, for rolling. Today, Ispat Indo has an annual production capacity in excess of 600,000 tonnes.
WITHIN THE GLOBAL STEEL INDUSTRY Mittal’s greatest coup, however, came in March of last year, when, after years of attempting to enter the US market, he finally acquired Inland Steel Co, one of the oldest and proudest integrated steel companies in the United States. The Inland acquisition called for Ispat to pay $1.4 BILLION for Inland’s common and preferred shares, as well as THE ASUSMPTION OF THE INLAND debt. In one bound he pushed himself into the industry’s top table and created the first truly global steel company, in addition to acquiring a central role in the massive US steel market.
"At any time I am likely to be working on two or three acquisitions", the Indian entrepreneur affirms. "You have to have two or three options because you can never be sure which one is going to work out. If I’ve decided something, I tend to get it done. I have an aggressive approach, but I like to believe that I’m a reasonable negotiator."
Though he is softly spoken and keeps a relatively low profile, Mr. Mittal threw an extravagant party at his home after moving to London a couple of years ago. To some in the community it was his way of signalling that he had arrived – both in Britain and financially. The Indian High Commissioner entered an appearance and many other prominent Asians too.
Born in Sadulpur in Rajastan, India, on June 15th 1950 – Mittal remains an Indian citizen. Educated at the prestigious St. Xavier’s College in Calcutta, he went on to graduate from the City of Joy’s University – coming first in his Bachelor of Commerce degree in business and accounting.
He might well like to keep a low profile, but his astonishing success in the steel industry has meant that he has become wildly – some would say flamboyantly - rich. He owns a ritzy £6 million home (the postman delivering mail to the "Summer Palace") in London’s Bishop’s Avenue – Millionaire’s Row as it is more popularly known – where neighbours include the Sultan of Brunei and King Fahd of Saudi Arabia.
On the rare occasions when he is not travelling the world and is at home, Mittal keeps a disciplined schedule, doing yoga for an HOUR every day and trying to catch a swim in his indoor pool. He is married to USHA Mittal – and the couple have two children – Aditya, a son, and a daughter, Vanisha, EIGHTEEN. TWENTY THREE year old Aditya has recently become the third generation of Mittals to work in the family business. IN DECEMBER OF LAST YEAR HE MARRIED MEGHA PATAUDIA, WHOM HE MET WHEN HE WAS AT WHARTON BUSINESS SCHOOL IN THE UNITED STATES.
Mittal remains the majority owner of all operations – although a minority interest in Ispat International was sold to the public in 1997 in an offering that generated heavy interest in both the New York and Amsterdam markets – something almost unheard of in the normally sleepy steel industry. In fact Ispat’s first IPO in the August of 1979 was eight times oversubscribed.
He might well be just FORTY EIGHT years of age, but Mittal already has over three decades of experience in the steel industry – and knows as much about running a mill as anyone you are ever likely to meet. Described by some as the Carnegie of Calcutta, Mittal goes out of his way to avoid the social whirl of Britain’s Asian community. Last year, the Eastern Eye, an English-language newspaper for Britain’s Asian community, threw a party to celebrate its publication of the country’s 100 richest Asians – topped by Mr. Mittal, of course, whose net worth was estimated about £1.8 billion. Mr. Mittal skipped the party, even though the Prime Minister was scheduled to attend. No need to hang around in hope of a hank shake and a friendly smile from Mr. Blair – Mittal has already met him several times privately in the past.
"He was anxious to meet the Asian community here", says Gulam Noon, chairman of the Asian Business Association. The party was held outside under a huge marquee, with Indian food and music by a West Indian band. What I find very nice is that although the man has a lot of money, he’s so simple. He’s not a brash young man who acts like he’s conquered Mount Everest."
Since 1978 Mittal has lived away from the land of the Himalayas. "I always believed in doing something unique, and I felt the opportunities for me in India were limited. Being Indian is a real advantage if you are doing business in a lot of different countries. You learn a lot about bridging differences and reaching compromises when you grow up in a country with over 300 languages and ethnic groups."
He also runs Ispat with the frugality and dedication he learned early in life. The village where he was born, in India’s western Rajasthan desert, didn’t have electric power until the 1960s. And traditional Indian business practices still guide Mittal’s global empire. The most important is the century old Partha accounting practice, by which all costs are calculated at the end of each working day. "I tell my managers that I expect Partha-style accounts each day. They say I am insane, but I tell them that’s what you have to do if you want to work for Ispat."
Ironically Ispat International does no business in India. "It is one of my biggest disappointments. As an Indian I feel I really ought to be doing something for my country." Not surprisingly, he does, having BECOME an active philanthropist and a member of various trusts. The LNM Group Foundation was created in 1998 to support health and education needs of the poor, particularly in India. The group is a significant contributor to local community and welfare activities for employees in all the countries in which it operates, including Kazakhstan, where it also supplies heating and electricity to the City of Temirtau. The LNM Group Scholarship Program with the London School of Economics sponsors post-graduate students from countries where the Group has steelmaking operations. Mittal also sits on the Advisory Boards of the Wharton and Kellogg Schools of Management in the United States.
"Because India is important to me and I feel close to India – we are going to continue to work there", Mittal asserts, which means that you can rest assured it will be done. "I have a particular interest in eye projects – and it is my intention to set up eye camps throughout Rajastan, which is my home state. That’s something which we are working on right now."
"My roots in Calcutta are extremely important to me. That’s why I returned there when my son got married in December of last year – because that for me is home. I like to refer to myself as a Calcutta chele – that mean’s boy in Bengali. And that’s how I like to see myself – as a Calcutta kid at heart."
The President of India, His Excellency K. R. Narayanan, recently inaugurated Bharatiya Vidya Bhavan’s first computer centre in Calcutta. The institution was set up with a donation of £75,000 from Mittal.
Although he has become one of the world’s leading philanthropists, DELETE THE WORD ‘BUT’ do not be lulled into thinking that Mr. Mittal is a soft touch. Quite the contrary. A recent Goldman Sachs Global Research CONCLUDED that "..whilst Mr. Mittal is intensely aware of all relevant issues affecting the company, he does not tolerate anything other than first-rate performance."
"I heard the same buzz about Ispat that I heard about Nucor in the 1980s", reports Lou Schorsch, a steel-industry consultant with McKinsey & Co. And, strange though it may seem, Kenneth Iverson, the legendary chairman of Nucor Corp – the biggest success story in an otherwise dismal generation of U.S. steelmaking, happens to agree: "Ispat controls costs very closely – and Mr. Mittal is a very tough businessman."
Credit Suisse’s European Equity Research centre in Holland identified several factors that explain Ispat’s phenomenal success. They included low capital and operating costs, high profitability, internal and market growth, growth through acquisitions and globalism. And there can no be no doubting that whilst Nucor was the undoubted mould-breaker of the 1980s, Ispat has been the mould-breaker of the 1990s. The Credit Suisse report concluded that if the company were able to replicate its remarkable track record in recent years, "we would not be surprised to see it emerge by 2005 as the largest steel producer in the world." Music to the ears of Mittal – and precisely what’s on his own agenda.
"Ispat does so well because Mittal is a master of change", says Alan Coast, London-based steel analyst with Merrill Lynch. "He is very good at making deals and getting performance out of the companies he has acquired. And being sole owner makes him more fleet of foot than the old, entrenched companies."
"I am an Indian and it is true that Indians are often quite entrepreneurial", Mittal declares. "Especially those of us who leave India – we are often looking for new opportunities – fired with ambition and determined to be successful. But I do not take the view that the spirit of enterprise is on the wane among Britain’s Asians. Not at all. Today we are seeing a new set of young Indian entrepreneurs emerge – you only need to take a look at the Sunday Times Rich List – they are obviously doing very well and are not at all complacent to any degree."
Domestic producers have traditionally dominated the steel industry. GovernmentS defended national champions with trade barriers and state aid, notably in Europe. Steelmakers had little incentive to compete aggressively on price. But in the past 20 years, the industry has been transformed by the growth of steel production in developing countries, particularly in Asia, and the rapid globalisation of business for the steel industry’s main customers - car companies for the most part. Moreover, the development of electric-arc minimills (flexible small-scale production units) has undermined the dominance of large-scale integrated steelworks and reduced entry barriers into the industry. New producers emerged, putting traditional mills under pressure to cut costs and adapt. Mittal was one of the first to spot this trend – a good decade ahead of his competitors.
Mittal’s own marketing men have come up with a slogan dubbing the conglomerate as the steelmaker of the next millennium – hype with which its difficult to take issue given their track record. In fact Credit Suisse’s European Equity Research Centre recently came up with the mother-of-all-marketing slogans - that Ispat International was "arguably the best steel company on the planet", a phrase which many advertising and PR companies would have balked at.
"I’m like to think of myself as the Bill Gates of India", Mittal says with a thinly disguised grin on his face. "I am very driven. And probably more so now than ever before. Emerged, emerging or submerging markets – they all represent opportunity to me".
Steel makers of the world please note.
Paris, June 21, 2004
The Mittal couple promised their daughter a truly spectacular wedding – and Vanisha was treated to a lavish show with costs running up to £30 million.
Amit Bhatia (L) and Vanisha Mittal celebrate at rings ceremony during their wedding festivities at Versailles in Paris on Sunday, June 20, 2004. Vanisha Mittal, daughter of Indian steel magnate Lakshmi Mittal and Usha Mittal, is marrying London-based financer Amit Bhatia, the son of Renu and Arun Bhatia.
Wedding extravaganza took six-day long, which saw over 1000 guests, including leading Indian industrialists and Bollywood stars, and cost millions of pounds, concluded on Wednesday afternoon at the Grand Intercontinental in Paris.
All VIP guests included the Hinduja brothers Srichand, Gopichand and Ashok, the two sons of NRI industrialist Lord Swraj Paul, Ambar and Aakash, Reliance chief Anil Ambani and his wife Tina, Vijay Mallya, Anand and Anuradha Mahindra, Parmeshwar Godrej, Union Civil Aviation Minister Praful Patel, Sunil Mittal, hotelier Lalit Suri, property developer K P Singh, Javed Akhtar and Shabana Azmi, renowned painter M F Hussain, Congress leader Murli Deora and London socialite Ramola Bachchan.
Aishwarya Rai and Akshay Kumar, Bollywood stars performed at the wedding ceremony on Tuesday night while Shah Rukh Khan, Saif Ali Khan, Juhi Chawla and Rani Mukherjee had taken the centre stage earlier.
At Catherine de Medici's Jardin des Tuilleries in Paris, the sangeet ceremonyhad performances by Mittal's son, Aditya, and daughter-in-law, Megha, enacting the tale of how 23-year-old Vanisha fell in love with 25-year-old Delhi-born Amit Bhatia
London, May 24, 2004Resham Bhatia
Vanisha, the 23-year-old daughter of London-based billionaire steel tycoon, Lakshmi Mittal and his wife Usha, is getting engaged to 24-year-old Amit Bhatia, grandson of London socialites, Pasha and Kamal Saigal. Amit Bhatia is the son of property brokers Arun and Renu Bhatia, who are residents of Jorbagh.
Amit Bhatia, an investment banker, studied in London where he stayed with his maternal grandparents. He first met Vanisha when the two of them went to the same college in London . After dating each other for a year-and-a-half, the couple decided to tie the knot.
Vanisha, a talented photographer, has taken her Masters from SOAS (School of Oriental and African Studies). She has recently joined her father's company, LNM.
The wedding will be spread over five days from June 19 to 23. The engagement will take place in Versailles whereas the sangeet, mehendi and doli ceremonies will take place in Paris. The venue for the actual wedding will be the hotel Grand Intercontinental in Paris , the highlight of which will be a banquet for 1,000 guests at the Palace of Versailles .
And now for the hype...The invite is an elaborate 20-page booklet with hand painted images and descriptions of the various venues and functions. The gift accompanying the invite is as elaborate—anintricately carved 5 kg silver centrepiece
The wedding, which will involve a series of traditional Indian ceremonies and a string of lavish parties, is expected to cost several million pounds. After the 'Mehendi' ceremony,, the guests will be treated to an exclusive Bollywood night at the gardens of St Cloud.Against the backdrop of Eiffel Tower will be our star performers: Preity Zinta, ShahRukhKhan and Hrithik Roshan
This will be followed by exotic fireworks and a feast of regional Indian cuisine in a specially gildedBikaner Palace.TheBhatia's will welcome the bride over a Doli Lunch at Hotel Le Grand Inter Continental.
Guests, including Bollywood superstars and the pick of Indian high society, will be flown into the French capital from around the world and will be put up in two four-star hotels throughout the celebrations.
The groom's mother said, "We are only inviting very close family friends and relatives for the wedding in Paris . Later, this year,we'll be hosting a reception in Delhi.".
By Sify News Desk Friday, 18 June , 2004, 15:52
The man owns the LNM Group, the world's second largest steel producer with integrated steelmaking facilities in 12 countries, and is said to be Britain's wealthiest Asian. Yet, surprisingly, very little is known about him in the country where he was born. Meet Lakshmi Mittal.
Born in western Rajasthan, Mittal, 47, made his money in the unglamorous world of steel. Mittal's spectacular deal with the Chicago-based Inland Steel, which amounted up to $1.4 billion, was a hot topic for months on in UK's business circles.
But there was nothing spectacular about his origins. Mittal was born in an obscure village that did not even have electricity. Later, his family moved to Calcutta. In 1970, he graduated from the prestigious St Xavier's College specialising in Commercial Studies. Even while studying, Mittal worked for his father, Mohan Lal, who ran a small family-owned steel mill. After his graduation, he went on to work full-time for his father as a trainee.
He is known as a workaholic, who did not even hesitate to decline an invitation to a party called to honour UK's wealthiest Asians. Mittal, who was too busy tying up a deal in Chicago, decided to give the party, chaired by British Prime Minister Tony Blair, the go-by.
Despite the emerging threat from China, which Mittal thinks would be the world's largest steel producer soon, his friends claim that the steel baron will let nothing stand in the way of his ambition of creating the "world's largest and best-managed steel producer."
The zeal to be the best in whatever he does perhaps comes from his disciplined lifestyle. Mittal, who does an hour of yoga every day, says he owes a lot to his Asian roots.
In an interview with Fortunemagazine, he said: "Being an Indian is a real advantage . . . you learn a lot about bridging differences and reaching compromises when you grow up in a country with over 300 languages and ethnic groups."
Quiz him why he has lived outside India since 1976 and he points to the red-tapism that exists in India. Bureaucracy at least doesn't bother him in the UK, where his success has largely been built on buying loss-making state-owned mills and turning them into profit-making ones.
His first success story was in 1989 when he bought Trinidad and Tobago's steel facility, which was losing $one million a day. Within a year after its purchase, Mittal doubled the output and made the business profitable.
His secret of success is a combination of technological vision and good managerial sense.
Despite his remarkable rise, Mittal is known for maintaining a low-profile. Britain's wealthiest Asian, is also its eighth richest citizen. He owns a six million sterling pound worth mansion on Hampstead's millionaire row.
His illustrious neighbours on the Bishop's Avenue include the Sultan of Brunei and King Fahd of Saudi Arabia.
Mittal's group, including LNM Holdings N.V. and Ispat International N.V., has approximately 120,000 employees world-wide from over 45 nationalities and supplies the highest quality steel to demanding customer segments. Ispat International N.V., is listed on the New York and Amsterdam Stock Exchanges. LNM Holdings N.V. has steelmaking interests in Kazakhstan, Romania, Algeria, Czech Republic and South Africa. There are substantial synergies from its relationships with Ispat Indo’s steel plant in Indonesia and Ispat International N.V, which has highly efficient, modern steelmaking operations in the United States of America, Canada, Mexico, Trinidad and Tobago, Germany and France.
Lakshmi Mittal’s House – The most expensive residential real estate deal ever done.
Earlier we reported about Updown Court, the world’s most expensive house and Donald Trump’s Florida Mansion, the most expensive house in the USA. Although these two mansions have the titles of being the most expensive houses, they still have to be sold. No body has ever paid that much ($139 million and $125 million respectively) for a residential building. Then who was the person that forked over the most amount of money in a residential real estate transaction?The answer is Lakshmi Mittal, the Indian steel tycoon and the world’s fifth richest billionaire. His London residence at 18-19 Kensington Palace Gardens was bought from Formula One Boss Bernie Ecclestone in 2004 for a staggering $114.89 million (£62.7 million). And for while the house held the Guinness World Record for the world’s most expensive house. The Mittal/ Ecclestone deal still hold the record as the biggest of its kind.
Another interesting fact: Prince Talal Bin Waleed's palace racked up a construction bill of over $200 million when it was build in the late 80’s. But the palace belongs to his country and not to him per se, so his residence cannot be counted as a “private residential house”.
Labour backers head Asian rich list
Lakshmi Mittal heads the list despite losing £100m
"Steelgate" tycoon Lakshmi Mittal and passports row billionaires the Hinduja brothers have been named Britain's wealthiest Asians.
The controversial Labour backers take the top two spots in a list of 275 millionaires compiled by the Asian Xpress newspaper.
The list underlines the increasing influence of the Asian business community in Britain, with those named worth a combined £9.5bn - an increase of £1bn over the past year.
Membership of the exclusive club is also growing - with the 50 new entries worth £560m between them - and at least £5m each
Lakshmi who? Ispat what? If the name of Lakshmi Mittal and his company Ispat International doesn’t exactly flow from the tip of your tongue the chances are you are not alone. For a decade ago you could barely locate Ispat on the map of international business. But by integrating new facilities with existing capabilities Ispat International has leapfrogged past its opponents to become the first truly global steel company. THE PRIVATELY OWNED LNM GROUP, OF WHICH ISPAT INTERNATIONAL IS A MEMBER, IS THE WORLD'S FOURTH LARGEST PRODUCER. THE GROUP PRODUCED OVER 77 MILLION TONNES OF STEEL IN 1998 WHICH MAKES IT LARGER IN SIZE TO MOST OF EUROPES'S LEADING PRODUCERS, INCLUDING BRITISH STEEL. With annual revenues of approximately SIX BILLION DOLLARS and over 80,000 employees on the payroll, Mittal’s group has a capacity of over TWENTY million tonnes of liquid steel – making it the world’s only truly global steel conglomerate. Not bad for a company which only started life in the 1980s.
Ispat is nothing if not quirky. Run by a man from Calcutta, the company is incorporated in the Netherlands and has its headquarters in London. It produces steel in Europe, as well as in North and South America, and uses its own ocean-going fleet to ship goods to customers all over the world.
The nub of Mittal’s strategy? He cheaply buys up struggling state-owned mills that budget-minded governments no longer want and squeezes greater productivity out of them by spending on new technology and sending in competent private-sector management. Mittal has earned a formidable reputation as a dealmaker extraordinaire - as he set about acquiring steelworks in Canada, Ireland, Germany, Mexico and Trinidad.
He bought the troubled Irish Steel for one token Irish punt, although he agreed to pay off millions in back debt. He snagged Mexico’s loss-making Sicarsta mills in 1992 for $220 million; the Mexican government having built it for $2 billion less than a decade before. Nor can you accuse Mittal of not being sufficiently hands on – having bought Sicarsta he moved to Mexico for nearly six months, living on-site and personally developing a business plan to make the division profitable.
OTHER STEEELMAKING ASSETS OF THE LNM GROUP include Ispat Karmet in Kazakhstan and Ispat Indo in Indonesia. Over the last 8 years, Ispat International has acquired six major steelmaking facilities. Its main operations include Ispat Mexican, SA de C.V., Caribbean Ispat Limited, Ispat Sidbed Inc., Ispat Hamburger Stahlwerke GmbH, Ispat Stahlwerk Ruhrort GmbH, Ispat Walzdraht Hochfeld GmbH and Irish Ispat Limited. From 1989 to 1996, shipments have grown from 280,000 tonnes to ELEVEN MILLION tonnes, which translates into a compounded annual growth rate of ALMOST 40%, making Ispat International the world’s faster growing steel producer. In fact shipments are expect to increase to 10 million tonnes by the year 2000 – and that’s excluding any further acquisitions.
Ispat International IS ONE OF of the world’s lowest cost steel producers and the world’s largest producer and consumer of DRI, and of liquid steel using the DRI-EAF-CCM route, and manufactures a broad range of semi-finished and finished flat and long steel products. The DRI-EAF-CCM route, for those who might not be in the know, is the Direct Reduced Iron – Electric Arc Furnace – Continuous Casting Method. It might not have the resonance of Microsoft, lucrative software or biotech start up companies with their genetically engineered drugs – but when a company predicts 25% earnings growth over each of the next five years, investors have demonstrated time and again that they are more interested in returns than marketing and hype.
The Kazakhstan operation is one of the largest single-site integrated steel plants in the world. THE COUNTRY’S LARGEST SINGLE EMPLOYER IS located on the banks of the river Nura, (DELETE AND..) covers about 5,000 hectares and has a steel making capacity of 6.3 million tonnes per annum. Access to Kazakhstan’s abundant supplies of raw materials such as coal, iron ore and energy P.T. Ispat Indo was the first member of the LNM Group – established by Mittal in Indonesia in 1976. He was just 21 years old at the time. The company was set up as a 60,000 tpa greenfield project, for rolling. Today, Ispat Indo has an annual production capacity in excess of 600,000 tonnes.
WITHIN THE GLOBAL STEEL INDUSTRY Mittal’s greatest coup, however, came in March of last year, when, after years of attempting to enter the US market, he finally acquired Inland Steel Co, one of the oldest and proudest integrated steel companies in the United States. The Inland acquisition called for Ispat to pay $1.4 BILLION for Inland’s common and preferred shares, as well as THE ASUSMPTION OF THE INLAND debt. In one bound he pushed himself into the industry’s top table and created the first truly global steel company, in addition to acquiring a central role in the massive US steel market.
"At any time I am likely to be working on two or three acquisitions", the Indian entrepreneur affirms. "You have to have two or three options because you can never be sure which one is going to work out. If I’ve decided something, I tend to get it done. I have an aggressive approach, but I like to believe that I’m a reasonable negotiator."
Though he is softly spoken and keeps a relatively low profile, Mr. Mittal threw an extravagant party at his home after moving to London a couple of years ago. To some in the community it was his way of signalling that he had arrived – both in Britain and financially. The Indian High Commissioner entered an appearance and many other prominent Asians too.
Born in Sadulpur in Rajastan, India, on June 15th 1950 – Mittal remains an Indian citizen. Educated at the prestigious St. Xavier’s College in Calcutta, he went on to graduate from the City of Joy’s University – coming first in his Bachelor of Commerce degree in business and accounting.
He might well like to keep a low profile, but his astonishing success in the steel industry has meant that he has become wildly – some would say flamboyantly - rich. He owns a ritzy £6 million home (the postman delivering mail to the "Summer Palace") in London’s Bishop’s Avenue – Millionaire’s Row as it is more popularly known – where neighbours include the Sultan of Brunei and King Fahd of Saudi Arabia.
On the rare occasions when he is not travelling the world and is at home, Mittal keeps a disciplined schedule, doing yoga for an HOUR every day and trying to catch a swim in his indoor pool. He is married to USHA Mittal – and the couple have two children – Aditya, a son, and a daughter, Vanisha, EIGHTEEN. TWENTY THREE year old Aditya has recently become the third generation of Mittals to work in the family business. IN DECEMBER OF LAST YEAR HE MARRIED MEGHA PATAUDIA, WHOM HE MET WHEN HE WAS AT WHARTON BUSINESS SCHOOL IN THE UNITED STATES.
Mittal remains the majority owner of all operations – although a minority interest in Ispat International was sold to the public in 1997 in an offering that generated heavy interest in both the New York and Amsterdam markets – something almost unheard of in the normally sleepy steel industry. In fact Ispat’s first IPO in the August of 1979 was eight times oversubscribed.
He might well be just FORTY EIGHT years of age, but Mittal already has over three decades of experience in the steel industry – and knows as much about running a mill as anyone you are ever likely to meet. Described by some as the Carnegie of Calcutta, Mittal goes out of his way to avoid the social whirl of Britain’s Asian community. Last year, the Eastern Eye, an English-language newspaper for Britain’s Asian community, threw a party to celebrate its publication of the country’s 100 richest Asians – topped by Mr. Mittal, of course, whose net worth was estimated about £1.8 billion. Mr. Mittal skipped the party, even though the Prime Minister was scheduled to attend. No need to hang around in hope of a hank shake and a friendly smile from Mr. Blair – Mittal has already met him several times privately in the past.
"He was anxious to meet the Asian community here", says Gulam Noon, chairman of the Asian Business Association. The party was held outside under a huge marquee, with Indian food and music by a West Indian band. What I find very nice is that although the man has a lot of money, he’s so simple. He’s not a brash young man who acts like he’s conquered Mount Everest."
Since 1978 Mittal has lived away from the land of the Himalayas. "I always believed in doing something unique, and I felt the opportunities for me in India were limited. Being Indian is a real advantage if you are doing business in a lot of different countries. You learn a lot about bridging differences and reaching compromises when you grow up in a country with over 300 languages and ethnic groups."
He also runs Ispat with the frugality and dedication he learned early in life. The village where he was born, in India’s western Rajasthan desert, didn’t have electric power until the 1960s. And traditional Indian business practices still guide Mittal’s global empire. The most important is the century old Partha accounting practice, by which all costs are calculated at the end of each working day. "I tell my managers that I expect Partha-style accounts each day. They say I am insane, but I tell them that’s what you have to do if you want to work for Ispat."
Ironically Ispat International does no business in India. "It is one of my biggest disappointments. As an Indian I feel I really ought to be doing something for my country." Not surprisingly, he does, having BECOME an active philanthropist and a member of various trusts. The LNM Group Foundation was created in 1998 to support health and education needs of the poor, particularly in India. The group is a significant contributor to local community and welfare activities for employees in all the countries in which it operates, including Kazakhstan, where it also supplies heating and electricity to the City of Temirtau. The LNM Group Scholarship Program with the London School of Economics sponsors post-graduate students from countries where the Group has steelmaking operations. Mittal also sits on the Advisory Boards of the Wharton and Kellogg Schools of Management in the United States.
"Because India is important to me and I feel close to India – we are going to continue to work there", Mittal asserts, which means that you can rest assured it will be done. "I have a particular interest in eye projects – and it is my intention to set up eye camps throughout Rajastan, which is my home state. That’s something which we are working on right now."
"My roots in Calcutta are extremely important to me. That’s why I returned there when my son got married in December of last year – because that for me is home. I like to refer to myself as a Calcutta chele – that mean’s boy in Bengali. And that’s how I like to see myself – as a Calcutta kid at heart."
The President of India, His Excellency K. R. Narayanan, recently inaugurated Bharatiya Vidya Bhavan’s first computer centre in Calcutta. The institution was set up with a donation of £75,000 from Mittal.
Although he has become one of the world’s leading philanthropists, DELETE THE WORD ‘BUT’ do not be lulled into thinking that Mr. Mittal is a soft touch. Quite the contrary. A recent Goldman Sachs Global Research CONCLUDED that "..whilst Mr. Mittal is intensely aware of all relevant issues affecting the company, he does not tolerate anything other than first-rate performance."
"I heard the same buzz about Ispat that I heard about Nucor in the 1980s", reports Lou Schorsch, a steel-industry consultant with McKinsey & Co. And, strange though it may seem, Kenneth Iverson, the legendary chairman of Nucor Corp – the biggest success story in an otherwise dismal generation of U.S. steelmaking, happens to agree: "Ispat controls costs very closely – and Mr. Mittal is a very tough businessman."
Credit Suisse’s European Equity Research centre in Holland identified several factors that explain Ispat’s phenomenal success. They included low capital and operating costs, high profitability, internal and market growth, growth through acquisitions and globalism. And there can no be no doubting that whilst Nucor was the undoubted mould-breaker of the 1980s, Ispat has been the mould-breaker of the 1990s. The Credit Suisse report concluded that if the company were able to replicate its remarkable track record in recent years, "we would not be surprised to see it emerge by 2005 as the largest steel producer in the world." Music to the ears of Mittal – and precisely what’s on his own agenda.
"Ispat does so well because Mittal is a master of change", says Alan Coast, London-based steel analyst with Merrill Lynch. "He is very good at making deals and getting performance out of the companies he has acquired. And being sole owner makes him more fleet of foot than the old, entrenched companies."
"I am an Indian and it is true that Indians are often quite entrepreneurial", Mittal declares. "Especially those of us who leave India – we are often looking for new opportunities – fired with ambition and determined to be successful. But I do not take the view that the spirit of enterprise is on the wane among Britain’s Asians. Not at all. Today we are seeing a new set of young Indian entrepreneurs emerge – you only need to take a look at the Sunday Times Rich List – they are obviously doing very well and are not at all complacent to any degree."
Domestic producers have traditionally dominated the steel industry. GovernmentS defended national champions with trade barriers and state aid, notably in Europe. Steelmakers had little incentive to compete aggressively on price. But in the past 20 years, the industry has been transformed by the growth of steel production in developing countries, particularly in Asia, and the rapid globalisation of business for the steel industry’s main customers - car companies for the most part. Moreover, the development of electric-arc minimills (flexible small-scale production units) has undermined the dominance of large-scale integrated steelworks and reduced entry barriers into the industry. New producers emerged, putting traditional mills under pressure to cut costs and adapt. Mittal was one of the first to spot this trend – a good decade ahead of his competitors.
Mittal’s own marketing men have come up with a slogan dubbing the conglomerate as the steelmaker of the next millennium – hype with which its difficult to take issue given their track record. In fact Credit Suisse’s European Equity Research Centre recently came up with the mother-of-all-marketing slogans - that Ispat International was "arguably the best steel company on the planet", a phrase which many advertising and PR companies would have balked at.
"I’m like to think of myself as the Bill Gates of India", Mittal says with a thinly disguised grin on his face. "I am very driven. And probably more so now than ever before. Emerged, emerging or submerging markets – they all represent opportunity to me".
Steel makers of the world please note.
Paris, June 21, 2004
The Mittal couple promised their daughter a truly spectacular wedding – and Vanisha was treated to a lavish show with costs running up to £30 million.
Amit Bhatia (L) and Vanisha Mittal celebrate at rings ceremony during their wedding festivities at Versailles in Paris on Sunday, June 20, 2004. Vanisha Mittal, daughter of Indian steel magnate Lakshmi Mittal and Usha Mittal, is marrying London-based financer Amit Bhatia, the son of Renu and Arun Bhatia.
Wedding extravaganza took six-day long, which saw over 1000 guests, including leading Indian industrialists and Bollywood stars, and cost millions of pounds, concluded on Wednesday afternoon at the Grand Intercontinental in Paris.
All VIP guests included the Hinduja brothers Srichand, Gopichand and Ashok, the two sons of NRI industrialist Lord Swraj Paul, Ambar and Aakash, Reliance chief Anil Ambani and his wife Tina, Vijay Mallya, Anand and Anuradha Mahindra, Parmeshwar Godrej, Union Civil Aviation Minister Praful Patel, Sunil Mittal, hotelier Lalit Suri, property developer K P Singh, Javed Akhtar and Shabana Azmi, renowned painter M F Hussain, Congress leader Murli Deora and London socialite Ramola Bachchan.
Aishwarya Rai and Akshay Kumar, Bollywood stars performed at the wedding ceremony on Tuesday night while Shah Rukh Khan, Saif Ali Khan, Juhi Chawla and Rani Mukherjee had taken the centre stage earlier.
At Catherine de Medici's Jardin des Tuilleries in Paris, the sangeet ceremonyhad performances by Mittal's son, Aditya, and daughter-in-law, Megha, enacting the tale of how 23-year-old Vanisha fell in love with 25-year-old Delhi-born Amit Bhatia
London, May 24, 2004Resham Bhatia
Vanisha, the 23-year-old daughter of London-based billionaire steel tycoon, Lakshmi Mittal and his wife Usha, is getting engaged to 24-year-old Amit Bhatia, grandson of London socialites, Pasha and Kamal Saigal. Amit Bhatia is the son of property brokers Arun and Renu Bhatia, who are residents of Jorbagh.
Amit Bhatia, an investment banker, studied in London where he stayed with his maternal grandparents. He first met Vanisha when the two of them went to the same college in London . After dating each other for a year-and-a-half, the couple decided to tie the knot.
Vanisha, a talented photographer, has taken her Masters from SOAS (School of Oriental and African Studies). She has recently joined her father's company, LNM.
The wedding will be spread over five days from June 19 to 23. The engagement will take place in Versailles whereas the sangeet, mehendi and doli ceremonies will take place in Paris. The venue for the actual wedding will be the hotel Grand Intercontinental in Paris , the highlight of which will be a banquet for 1,000 guests at the Palace of Versailles .
And now for the hype...The invite is an elaborate 20-page booklet with hand painted images and descriptions of the various venues and functions. The gift accompanying the invite is as elaborate—anintricately carved 5 kg silver centrepiece
The wedding, which will involve a series of traditional Indian ceremonies and a string of lavish parties, is expected to cost several million pounds. After the 'Mehendi' ceremony,, the guests will be treated to an exclusive Bollywood night at the gardens of St Cloud.Against the backdrop of Eiffel Tower will be our star performers: Preity Zinta, ShahRukhKhan and Hrithik Roshan
This will be followed by exotic fireworks and a feast of regional Indian cuisine in a specially gildedBikaner Palace.TheBhatia's will welcome the bride over a Doli Lunch at Hotel Le Grand Inter Continental.
Guests, including Bollywood superstars and the pick of Indian high society, will be flown into the French capital from around the world and will be put up in two four-star hotels throughout the celebrations.
The groom's mother said, "We are only inviting very close family friends and relatives for the wedding in Paris . Later, this year,we'll be hosting a reception in Delhi.".
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