Making of world’s largest steel company
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This document provides information about the global steel industry and prominent steel companies. It discusses key facts about the world's largest steel producer ArcelorMittal, including its annual production, revenue, and acquisitions that led to its growth. It also summarizes details about other major steel producers like Tata Steel, SAIL, and the historical development and current state of the worldwide steel industry.
Making of world’s largest steel company
- 2. THE STEEL HOUSE IN TEXAS
- 3. THE U.S. STEEL TOWER IN PENNSYLVANIA
- 5. THE SHUN HING SQUARE TOWER
- 7. These amazing structures of the world are built of STEEL. Not sure if there is any amazing story of steel. But definetly it is for Steel – Makers.
- 8. TOP 5 STEEL COMPANIES OF THE WORLD
- 11. • Employees 2,81,000 over 60 countries • Annual Sales Value above US $500million • Revenue $84.2billion • Production • Export % • Type of Business 88.2million tonnes 61%-70% Manufacturer Mill Factory
- 12. “ This is not about creating a giant ….its about creating the sustainability of the steel industry..” -Lakshmi Niwas Mittal
- 13. • Birth Place- Shekhawati,Rajasthan • On June 15,1950. • Worked in his father‟s steel plant. Nippon Denro Ispat Ispat Group • Graduated from, Mittal Steels
- 14. 1950: Born in Shekhawati, Rajasthan India. 1976: He commenced his career with his father's steel business. 1996: Won the Steel Maker of the Year from New Steel. 2003: He established L.N.M. Institute of Information Technology in Jaipur. 2004: Bestowed with the Entrepreneur of the Year and European Businessman of the Year. 2006: He took over Arcelor, one of the largest steel companies. 2007: The Padma Vibhushan was given by the Indian government and the Grand Cross of Civil Merit by the government of Spain. 2008: Forbes Lifetime Achievement Award was granted to him.
- 15. PERSONAL QUALITIES OF MITTAL • Hard Working • Out of Box Thinkinig • Bravery • Capacity to lead • Outstanding Vision • Simplicity
- 16. EQUIPED TWO MAIN TRENDS • Blast Furnace to Mini-Mills • Cheaper Substitute for Steel scrap
- 17. INTERNATIONAL EXPANSION • Mittal set up his first international steel factory in indonesia. • Building a melt shop. • Got a supplier of DRI called Iscott. • Iscott is a $100,000 lose company. • He contracted iscott for 5 years. • “It was a very big break for me to win that contract”
- 18. ISCOTT SUCCESS • Iscott become more profitable within 12 months. • Trinidian government sold plant to Mittal. • Previous failure of iscott is because of they were not bothered about the company. • This success was the sign of global expansion.
- 19. ISPAT INTERNATIONAL: BECOMING A GLOBAL STEEL COMPANY His main revitalized into mini mill or DRI plants. Mittal goal is lowest cost and highest quality. Aim is to Buy low-cost steel manufactures that could be
- 20. SICARTSA2 • Purchased sicartsa2 from mexican government for $220million • Market was bad ,company production was less than 25% • Technology adopted was failure and company faced problems • Before purchasing the plant he stayed onsite for 6monts,with 19people and worked for 9month period. • Within three years plant produced profit. • In 1996,it made 37% of the group overall sales and contributed 63% of its operating cost
- 21. • In north america(1992) he signed to purchase the bethlehem bar,rod and wire division in US. • In 1993 deal had fallen. • United steelworkers association decided not to conclude a labour agreement • Union maintaining that they had done best to reach an agreement with ispat.
- 22. ISPAT SIDBEC • In canada he purchases steel mill from quebec government in 1994. • Renamed as ispat sidbec. • In two years he established a strong presence in europe. • Purchased state-run irish steel and forming ispat hamburger stahlwerke in germany.
- 23. • In buying irish steel , ispat took on the factory debts of $51 million and he contributed $8 million capital. • He made agreement for a further $34 million over next six years. • Irish government contributed $30 million to the operation. • Plant made beams for the construction industry from scrap metal. • 90% of sales was in european union.
- 24. KAZAKHSTAN Acquisition of karmet Borrowed money from European bank Social contribution
- 25. SOCIAL CONTRIBUTION • Habitat for human • Mittal champion trust • Smile foundation • Support in local social projects
- 26. ISPAT INTERNATIONAL - GOING PUBLIC Shares on stock(a share, b share) Retained shares Ispact‟s biggest acquisition LNM IIT project
- 27. EXPANSION INTO US Cutout cost Valuation suffer Achieve market leadership KIP - benchmarketing
- 28. GROWING PAINS Irish International started in 1995 It was a 250,000 ton plant in Ireland The company saw sales decline in majority of its division It faces certain restrictions from EU 2001-toughest year of Ispat International and it orderly shutdown
- 29. Tony Blair, Britain‟s Prime Minister assisted Mittal a steel plant in Romania. Mittal donated $1,76,000 to Blair‟s governing party. The british press pounced on both Mittal and Blair. Letter to Nastase – Romanian Prime Minister-Blaire was criticized strongly.
- 30. Mittal’s acquisitions 1. POLSKIE HUTY STALI IN POLAND IN 2004. 2. INTERNATIONAL STEEL GROUP IN OCT 2004. 3. ISCOR IN SOUTH AFRICA IN 2001. 4. NOVA HUT IN CZECH REPUBLIC IN 2003. 5. ISPAT INTERNATIONAL, LNM HOLDINGS, ISG MERGED TO FORM MITTAL STEEL.
- 31. MITTAL‟S APPROACH Struggling state – owned mills No bidders First private enterprises to chase down foreign acquisitions Key steps - lowering costs, cutting excess staff and new technology Worldwide conference call Manager‟s from SAIL .
- 33. MAJOR ACQUISITION • Three way merging – 2004 - Ispat International - LMN‟s Holdings - International Steel Group • Acquisition of Arcelor (2006) - European steel maker
- 34. CORE VALUES • Leadership - Product diversity - Geographic reach - Diversification • Sustainability • Quality
- 35. GLOBAL COMPETITIVE ADVANTAGE • Creating global customer base and being better able to predict market trends • Strong manager integration program • Global purchasing power
- 36. STEEL AUTHORITY OF INDIA LIMITED-SAIL • Top five highest profit earning corporate of the country. • Annual production -13.5 million metric tons • 14th largest steel producer in the world. • Major plants owned by SAIL are located at ᵴ Hilai ᵴ BokBaro ᵴ Durgapur ᵴ Rourkela, ᵴ Burnpurand ᵴSalem.
- 37. STEEL AUTHORITY OF INDIA LIMITEDSAIL . Founded 1954 Headquarters New Delhi Chairman Chandra Shekhar Verma Products Steel, flat steel products, long steel products, wire products plates Revenue 48681 crores (US$7.4 billion) (2012) Net income 3542 crores(US$540 million) (2012) Total assets 20425 crores (US$3.1 billion) (2011) Employees 99360 (2013)
- 38. ORE BATTLE WITH MITTAL (STEEL MILL) • SAIL plans to build a 10-million-tonne steel mill in expectation of beating Arcelor Mittal for the rights to control the nation‟s biggest iron ore reserves. • Steel Authority of India Limited (SAIL) registered a 16% growth in sales during the month of August ‟13. • It has recorded its sales as 10.86 lakh tonnes of steel products recently, which was 9.38 lakh tonnes in corresponding period last year (CPLY).
- 39. COST OPTIMIZATION INITIATIVES • COIS was launched outlining the road map for achieving an overall saving target of around Rs 5000 crores during the next three years. • Under this special initiative, following thrust areas have been identified for continual cost reduction: ᵴInput optimization ᵴ Improving the operational efficiency by optimally utilizing the available assets ᵴ Quick stabilization of the newly commissioned units ᵴReducing overhead costs and enhancing employee productivity
- 40. CURRENT PLANS OF SAIL SAIL has planned to, ᵴ Have synergy with the natural resources endowments of the company. ᵴ Minimize damage to environment. ᵴ Optimize resources utilization. ᵴ Facilitate modern techniques in productivity. ᵴ Undertake R&D activities to introduce new technologies. ᵴ Sustainable development.
- 41. TISCO • Headquarters : Mumbai,Maharashtra,India. • Marketing Headquarters : Tata Centre in Kolkata,West Bengal. • Established by „Dorabji Tata‟ in 1907.
- 42. EXPANSION PLANS AND ACQUISITIONS • Annual Production Capacity by 100 million tons by 2015. • Plans to add 29 million tonnes of capacity through acquisition. • 31st March,2013-31.35% shares in Tata Steel.
- 43. AWARDS AND RECOGNITION • Ranked India‟s 7th by “Fortune Magazine”. • 7th Most Valuable Indian brand of 2013. • Received “MAKE Award” for 2012. Major competitors: ArcelorMittal SAIL VISA STEEL EssarSteel JSW Steel.
- 44. THE WORLDWIDE STEEL INDUSTRY •Production(as of 2012) - 1.5b tonnes /year. •ArcelorMittal – Largest steel company. •2 main customers • Automotive manufacturers. • Domestic appliance manufactures. •The World Steel Association has indicated that global steel demand will increase to 2.9% when compared to 1.2 percent last year. •Demand for steel in other countries: •INDIA - rise by 5.9 percent in 2013. •US - rise by 8.4 percent in 2012. •CHINA - rise by 3.1 percent in 2013.
- 48. CONCLUSION In 35years, the growth of the industry is tremendous. ArcelorMittal is the world‟s largest. Production of 97.2 millions. International Iron and Steel Institute (IISI) forecasted increment in demand for steel from 1.32 billion tones (in 2010) to 1.62 billion tones (in 2015) • Consumption is highly cyclical. • Competition from substitute materials Aluminum Plastics • Major away or commodity value added production Specialization Higher value added advantages New technologies • • • •
- 49. • Changing mind sets from regional to global. • To maintain position in lowest cost quartile. • Aiming at cost reduction, through. Operating efficiency improvements. Raw material and procurement initiatives. Increase labor productivity. • Creating an high performance curtain. • Focus in global market efforts. • After 80s, demand for steel increased continually.