Of course, we would like to have steel making presence in India: L N Mittal
Breaking their silence, LN Mittal and son Aditya talk about the bid for Essar SteelBSE 0.41 %, India and the recent controversies. Edited excerpts:
You have always stayed close to India… You have a global empire but a small footprint in India. Why? After so many efforts to start a greenfield steel plant, do you feel let down? Even now, as you bid for Essar there is so much noise… Lakshmi: I was born and grew up in India and have always remained close to the country of my birth and citizenship. “We don’t yet have a steel-making presence in India but we have made a major investment in HMEL, one of India’s top refineries, and I am very pleased with how this is progressing. Of course we would also like to have a steel-making presence here. The country has been attractive to us for a long time – the outlook for steel demand growth makes it a strategic market. And fundamentally I hope and believe we can bring a lot to India in terms of our expertise, our technology and our governance that would ultimately be of value to the country.”
The country has so much potential and I would love to see it deliver all that potential and flourish as one of the world’s most vibrant economies. Attracting increasing foreign investment has to be part of that and the government is implementing a lot of initiatives to support that aim.
What do you believe ArcelorMittal can bring to India?
Aditya: We believe we can bring a lot to India in terms of our technology, our product capabilities, our financial strength and our management know-how. We have expertise in all steel-making technologies, including those found at Essar Steel India and this will be very beneficial in improving the performance of the asset and giving it a strong future.
Why join hands with Nippon Steel and not bid solo?
Aditya: We bring more to the table by joining hands. ArcelorMittal has phenomenal technology, capabilities, world class products, we are the number 1 supplier of automotive steel in Europe and in other parts of the world. Nippon also has phenomenal capabilities, produces demanding products and has a lot of patents like us and together we can bring an even larger product suite, better technology. This is the no 1 steelmaker and the no 4 in the world teaming up to make a great success out of Hazira (Essar Steel).
Can you elaborate?
Aditya: Combing the strengths of the two companies we can grow Essar Steel faster. First to the name plate capacity of 10 MTPA but our aspiration is to take it to go beyond that. There is a lot of potential and we have the capabilities to accelerate that transformation in size, scale and product portfolio.
There are talks that you would like to ramp up Essar to 18MTPA?
Aditya: I don’t want to comment on specific numbers. I would just say that we certainly believe there is an opportunity to increase Essar’s production in-line with the stated government aim to increase steel-making in India to 300 million tonnes. Here we are not just talking about volume but also about enhancing the product range to include more sophisticated grades of steel for India’s developing economy.
If India is so strategic for ArcelorMittal, why bet on just one horse -- Essar? Is there a plan B to maybe revisit the greenfield plans. You also let go of Bhushan Steel after doing diligence.
Aditya: The most exciting opportunity for us is Essar. We not looking at plan B. We are focused on achieving success here. We have made a very strong offer.
Talking about the noise around the eligibility of ArcelorMittal and the 29a amendments, it’s all about your investment in Uttam GalvaBSE 1.27 %. Why exit just before the bid at a massive loss?
Aditya: People were perceiving us to be a promoter when we weren’t one. So we decided okay let us resolve this by selling it back to the actual promoters. To be honest we wrote off that investment a year back in our books. ArcelorMittal has honoured all of its obligations globally, and has not defaulted. As you may be aware, ArcelorMittal has the same Standard and Poor’s credit rating as India’s sovereign rating. We have a track-record of successfully investing all around the world and we are fully committed to making a great success of Essar.
VTB Capital’s CEO made some strong comments about ArcelorMittal. What do you have to say in response?
Aditya: I don’t want to comment on what others say. What I can say is that the steel industry is complex and technologically advanced. To run a successful steel business, you need experience. I believe our track record from around the world, combined with the track record of Nippon, speaks for itself.