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.".