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L N Mittal : the success of Brand India

For people of his native Kolkata, the name Lakshmi Narayan Mittal evokes memories of the lavish wedding of his son Aditya in 1998 on the city's landmark Victoria Memorial ground where a Bollywood superstar had gyrated to his money power.

The wedding reception of the son of a 'local' businessman on the premises of a memorial built for Queen Victoria in 1921 is the eastside story of the rise and rise of the London-based global steel baron whose bid to buy out Arcelor, the world's second largest steel producer, has exposed the xenophobia of European Union politicians and governments despite their vaunted commitment to free market and globalisation.

The mansion-like Mittal House in south Kolkata's upmarket Alipore area has no Mittal living now except for their occasional visits, but this is the city where his family, like many others from the rich Marwari trading community of Kolkata, had settled in the 1950s and had humble beginnings.

From a non-descript village of Rajasthan to big metropolis Kolkata to the $127 million Kensington Palace Gardens residence of London, Mittal's journey has been one dreams are made of in Bollywood, whose stars dance in his private functions to the tunes of his money power.

Though Mittal was born in a Rajasthan village (Sadulpur in Churu district) in 1950 where no electricity reached till the 1960s, his family moved to Kolkata for better prospects.

Like most Kolkata Marwaris of today, his family too moved to this city of opportunities and father Mohan Lal Mittal set up a small steel mill. Mittal, who was a student of commerce at the prestigious St. Xavier's College, used to work in his father's company after classes since he was 19. After finishing his Bachelor of Commerce degree in business and accounting with first class, Mittal joined his father's firm in the early seventies more actively.

But he soon realised the limited opportunities in India for him and decided to move to Indonesia in 1976. With his father's backing he founded a steel plant, Ispat Indo, and made the company a success. There began a saga of triumphs for the shrewd businessman.

"I have met him on a couple of occasions and he seemed a pretty ambitious and confident person with a vision to emerge as a global corporate leader. His success is the success story of brand India now and it proves that it is possible from India now to make it there," Nazeeb Arif, secretary general, Indian Chamber of Commerce (ICC).

His success has largely been built on buying up loss-making state-owned mills and quickly turning them around. He had one of his most notable successes in the late 1989, when he turned around a loss-making government-founded steel firm in Trinidad and Tobago which was losing $1 million a day.

Within a year, Mittal had doubled the output and made the business profitable where US consultants and German experts failed to find a solution.

In 1992, he went to Mexico and bought the country's third largest steel producer, Sicartsa for $220 million. This was followed by an acquisition of Siderurgica del Balsas SA at Lazaro Cardenas in Mexico and then more companies in Canada, Germany, Ireland etc.

Mittal followed the same strategy in former Soviet republic of Kazakhstan, and took over the state-owned blast furnace steel plant in 1995, renaming it Ispat Karmet. It was a risky proposition even by Mittal's standards, workers had not been paid for six months. But within a year it was profitable and production has doubled from 120,000 tons a month to 250,000.

In 1995, two new companies Ispat International Ltd. and Ispat Shipping were formed to provide technical and commercial services to the Group and to meet its growing shipping needs. The same year, he entered into Europe by acquiring a steel plant in Hamburg, Germany. With this, the capacity of the group reached to 11.2 million tonnes.

Meanwhile in 1994, a partition in the family business group, transferred all the foreign business into Ispat International, under the control of Lakshmi Mittal. The Indian operations remained with his younger brothers P K Mittal and V K Mittal. In 1997, Ispat International, the company that controlled the Group's steel making operations in Mexico, Trinidad and Tobago, Canada and Germany went for listing in 1997 on the New York and Amsterdam stock exchanges. The Ispat group went on making major acquisitions.

In 2004, Mittal Steel was formed through the merger of Ispat International and LNM Holdings, at the same time Ispat International merged with International Steel Group Inc. (ISG) an Ohio based company, becoming the world's most global steel producer with a net worth of over $22 billion. Mittal's industrial empire has steel making facilities in 14 countries and stretches from Indonesia to Poland, via Mexico, US, South Africa and Trinidad, North America, Africa, Asia and many European countries.

Mittal has received accolades for his achievements. In 1996, he was awarded the title 'Steel maker of the Year' by New Steel Magazine in the USA, and he received the Eighth Honorary Willy Korf Steel Vision Award, the highest recognition for world wide achievement in the steel industry in June 1998. In 2004, he was awarded the 'European Business man of the year' by Fortune Magazine.

Although steel manufacturing remains the group's mainstream business, they have diversified into shipping and has ventured into coal, power and oil enterprises in Kazakhstan. His Mittal Steel Co is the world's largest steel producer - and he is the richest billionaire not only in Britain but also in Europe.

Mittal is 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.

He resides in a palatial home known as Summer Palace, in London that he bought in 2003 for a residential record of $129 million. His wife Usha runs the Indonesian business and his son Aditya and daughter Vanisha are members of the Board of Directors of Mittal Steel.

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