Lakshmi Niwas Mittal: The Entrepreneur - Essay Example

ENTREPRENEUR According to Industrialist Ross, Chairman and CEO of WL Ross & Co. LLC, who built up and sold North America’s biggest steelmaker to Mittal in 2005. Lakshmi Mital, the world’s largest steel company, seems to be the Indian reincarnation of Andrew Carnegie. Yet Mittal far overshadow Carnegie in many ways in the sense that Carnegie’s was the first American company to achieve $1 billion market capitalization while Arcelor Mittal seems likely to become the world’s first $100 billion market capitalization steel company. The geographical scope of Mittal with 320,000 employees in 60 countries also vastly exceeds the US steel’s. Most remarkably, Mittal’s story has not yet finished and in spite of being, three times the size of its nearest competitor the company is still in its early stages of penetrating the world’s largest market, China. It also has plans of expansion in India and other emerging market nations. (Kar, 2006) Lakshmi Niwas Mittal born in June 15, 1950 in Sadulpur village in Rajasthan, India at present resides in Kensington, London. Named in May 2007, as one of the “100 most influential people” by Time Magazine he spent his early years in India living with his extended family on bare floor and rope beds, without running water or electricity. According to Mittal, “I think that’s good in a way. It makes you stronger. If you start your childhood with difficult times, difficult period and in a challenging environment you become stronger in life …” (Brinda, 2006) He graduated from St. Xavier’s College in Kolkata with a Bachelor of Commerce degree in Business Accounting in 1969. He began his career working in the family’s steelmaking business in India (his father Mohan had set up Ispat Steel in 1950’s) and with the Indian Government heavily restricting domestic steel production, in 1976 Mittal set out to establish an international division beginning with the buying of a run-down plant in Indonesia. Gone for a holiday to Southeast Asia his father wanted him to sell a plot of land with which nothing could be done. However, when Mittal arrived there he changed his mind and said, “I would like to build a steel company in Indonesia” (Brinda, 2006) and as Mittal himself says that was “beginning of life.” Shortly afterwards he married and 1994 due to differences with his father and brothers he branched out on his own taking over the international operations of the Mittal steel business. Believing in a policy of globalization and merger Mittal set up factories in many places around the world. (Lamb, 2004) After establishing Ispat Indo, Indonesia in 1976, in 1989, he leased Iscott, Trinidad and Tobago. In 1992, he entered the Mexican market; later in 1994, he bought Sidbec-Dosco, Canada. Then in 1995, he bought Hamburger Stahlwerke, Germany. Again, in 1995 itself, he moved HQ to London and entered Kazakhstan market. In 1996, he bought Irish Steel and in 1997, Ispat International floated. However, as losses topped 750,000 punts a month the Irish Steel plant was closed in 2001. In the same year, he bought Sidex plant, Romania. One major key factor for his growth is that he consciously avoided scourging iron from higher cost scrap sources favoured by rivals. Another key factor has been the championing of small steel mills – a strategy followed by him since his days as a steel magnate elect in 1970’s in India. His merger with Arcelor in 2006 made Arcelor Mittal the world’s largest producer of steel with assets in France, Belgium, Romania, Bosnia-Herzegovina, South Africa, Poland, Czech Republic, Indonesia, Kazakhstan, Canada, Bulgaria, US, Trinidad, Brazil and Mexico. (King, 2006) Mr. Mittal has deserving been awarded many awards from the ‘steelmaker of the Year – New Steel’ in 1996; ‘Willy Korf Steel Vision Award – American Metal market & Paineweber’s World Steel Dynamics’ in 1998; ‘European Businessman of the Year’ by Fortune Magazine in 2004; ‘Person of the Year’ by Financial Times in 2006; ‘Bessemer Gold Medal’ in 2007; the prestigious ‘Padma Vibhushan’ in 2008 to name a few. Mittal tops Sunday Times Rich List, in March 2008, Mittal rose from being the 61st. richest in 2004 to the 4th wealthiest person in the world by Forbes with a personal fortune of $45 billion. The family owns 44% of Arcelor Mittal. His residence at Kensington Palace Gardens was bought for ₤57 million, making it the world’s most expensive house with the news even probably making it into the ‘Guinness Book of World Records’. Moreover, marble for redecorating the house was brought from the same quarry from where marble for the Taj Mahal was taken. He has two children – his son Aditya, is the CEO of Arcelor Mittal and for his daughter Vanisha’s wedding celebration at Vaux le vicomte in 2004 and an engagement ceremony at the Palace of Varsailles he spent over ₤30 million, making it the most expensive wedding ever. However, Mittal refuted the claim saying, “It is all media speculation. In addition, I live in a home in London, but I like the house. The whole family loved the house so we bought it. … It has nothing to do with, because we have so much money we like to spend it. I think we like to live happily. I am a family person, I have two children, and I love my children. So we wanted to have a good wedding for them and we did.” (Brinda, 2006) Mittal has given millions of dollars for tsunami relief and other relief causes. He set up the Mittal Champions Trust with $9 million to support 10 Indian athletes with world-beating potential. To refute criticisms that Mittal unlike Bill Gates and Warren Buffet has not really done much for charity, he says, “First of all I am still young. I am not like Warren Buffet so I have still work. It is not true that we aren’t doing enough for charities. We have got a Lot of initiatives in different countries where we have business. And all these companies are doing charitable work, are helping society and community.” (Brinda, 2006) Moreover, he said that the Arcelor Mittal Foundation would perform charitable deeds and continue to work for society and community on a global basis. Mittal’s goal to provide leadership that will transform tomorrow’s steel industry has really paid off. When asked how he got from India to becoming a steel baron he said, “I think when I left India, in ’76; I had no choice but to succeed.” (Brinda, 2006) References: Bindra, Satindra; (October 23, 2006); Lakshmi Mittal Talkasia Transript; CNN.com; Retrieved on 09.05.2008 from http://www.cnn.com/2006/WORLD/asiapcf/10/23/talkasia.mittal.script/index.html Kar, P; (2006); History of Industrial Economics and Related Applications; Kolkata: Dasgupta & Chatterjee King, H; (2006); Management Principals Today; Auckland: HBT & Brooks Ltd Lamb, D; (2004); Cult to Culture: The Development of Civilization; Wellington: National Book Trust Read More