XL Results Foundation Blog

Lakshmi N. Mittal is well-known for ‘two world records’: one for owning the ‘world’s most expensive house’ — a £70-million mansion in Kensington, London — and for throwing the ‘world’s most expensive wedding’ for his daughter Vanisha Mittal and her fiancée Amit Bhatia on June 22,2004 for US$60 million — according to the tabloids.

The house is 12-bedroom mansion in the prestigious Kensington Palace Gardens, on a street known as
‘Billionaire’s Row’ that has garage space for 20 cars. This mansion was sold by Bernie Ecclestone, the Formula One racing boss.

Born in Sadulpur in Rajasthan, India on June 15, 1950, Lakshmi graduated from St. Xavier’s College in Calcutta where he received a Bachelor of Commerce degree. He is married to Usha Mittal. Their son, Aditya, is CFO of ArcelorMittal, while daughter Vanisha is a Member of the Board of Directors.

A Family Falling Out

Mr Mittal, President and CEO of ArcelorMittal, is also known for being ‘the man of steel’. As a young man,
he worked in his family’s steelmaking business, and went to Indonesia where he bought a run-down mill for what was supposed to be the beginning of their international company. In 1994, he had a falling out with the family, so he set out on his own and began a career that would see his assets grow to where he is
now: one of the richest men in the world.

Mittal Steel grew to be the world’s most geographically-diverse steel giant, stretching from central Asia through Africa and Europe to Central and North America. Then it became even bigger with its 2006 merger with Arcelor, which was the world’s largest steel producer in terms of turnover and the second largest in terms of steel output. Together ArcelorMittal is the undisputed worldwide leader in the steel industry.

The Man of Metal

Those in steel know the tremendous impact that the ‘Man of Metal’ has had on the industry. When Lakshmi joined the board of The Goldman Sachs Group, Lloyd C. Blankfein, Chairman and CEO of the investment banking, securities and investment management firm stated, “Lakshmi Mittal has reshaped a global industry and, in the process, has engineered new modes of production, identified unrealised value and sparked remarkable growth. He has a keen understanding of the global economy, having operated in virtually every corner of the world. Lakshmi’s experience, judgement and independent thinking represent an important addition to our board of directors.”

“What makes Mittal so unusual in the steel business,” Fortune writer Richard Tomlinson wrote, “is his ability to combine managerial savvy with superb acquisitive instincts. Forget about luck: Mittal is the king of global steel because he spotted potential riches where his rivals only saw dross.”

Steelmaker of the Year

Recognition of Lakshmi’s importance to the industry has also come in the form of many awards and honours. He was named ‘Steelmaker of the Year’ in 1996 by New Steel in the USA, and in 1998 he received the ‘Willy Korf Steel Vision Award’ from American Metal Market and PaineWeber’s World Steel Dynamics, for

outstanding vision, entrepreneurship, leadership and success in global steel development. He was named Fortune magazine’s ‘Europe Businessman of the Year’ in 2004 in recognition of his ability to combine managerial savvy with superb acquisitive instincts.

The merger with Arcelor brought Mr. Mittal another spate of awards, such as ‘Business Person of 2006’ by the Sunday Times, ‘International Newsmaker of the Year 2006’ by Time Magazine and ‘Person of the Year 2006’ by the Financial Times.

In January 2007, the steel magnate was presented with a Fellowship from King’s College London: the college’s highest award. He has also been awarded the 2007 Dwight D. Eisenhower Global Leadership Award, AIST Steelmaker of the year and, more recently, the Grand Cross of Civil Merit from Spain. In 2008 he was presented with the ‘Padma Vibhushan’, India’s second highest civilian honour, by the President of India.

Steel is Perfect

Mr Mittal has shaped and influenced the thinking of the industry. Speaking at the annual Steel Success Strategies Conference in New York, he underlined the important contribution to sustainable development the industry makes. “Increasing urbanisation requires safe, affordable, aesthetic, sustainable and rapid construction,” he stated. “Steel is the perfect material for this. It can be built more quickly. It is 50 percent
lighter than traditional materials. It is environmentally friendlier, with 80 percent of steel used in construction today coming from recycling. Composite construction using steel creates considerable energy savings and reduces CO2 emissions.”

What is perhaps less-known is that Mr. Mittal is an active philanthropist. He has given to numerous causes and his operations around the world have become very active in ensuring a good work environment for employees and for being active in the life of the community in which it exists.

Heartbreak in Mississippi

In recent years Mr Mittal has donated money to many worthy causes, including US$2 million for the Tsunami Recovery and Relief Fund set up by former US presidents Bill Clinton and George Bush Sr; and in the wake of Hurricane Katrina, he provided US$1 million to help with the rebuilding efforts on the beachfront town of Long Beach, Mississippi.

“The effects of Hurricane Katrina on the people of Louisiana, Mississippi and Alabama are heartbreaking, and it will take years to rebuild the affected communities,” said Lakshmi. “In the aftermath of this disaster, these
communities are left with challenges that require innovative, long-term solutions and substantial commitments of both time and resources. Few cities were more devastated than Long Beach, and, to address its needs, we have created a new model for corporate partnership.”

An Olympian Effort

Though having lived outside his home country for many years, he is still a hometown boy, “I went to Athens to see the Olympics last year and was excited by the performances, but was disappointed to see India languishing at the bottom. When Lithuania can win medals, why not India?” Lakshmi wanted to know. The steel baron responded to his own question by donating US$10 million to set up the `Mittal Champions
Trust’.

Mr Mittal’s goal is to support and improve the performance of Indian sportsmen and women to win medals at the Olympic Games at Beijing in 2008, the New Delhi Commonwealth Games in 2010 and the 2012 Summer Olympiad in London.

“There are many districts in India, and I am sure there’s plenty of talent to be tapped there. Someone like M.S. Dhoni has emerged from Jharakand. I hope more Indian corporates would start similar initiatives to support Indian sports. We will do our best, train athletes in India or abroad, in order to achieve excellence in sports,” he said.

The ‘Mittal Champions Trust’ will provide youngsters with the highestquality training available for their sport.

Attending Kellogg

Mr Mittal’s does not just take an interest in sport, but has contributed to the future of business through a $3 million scholarship programme with Northwestern University’s Kellogg School of Management. The grant will fund 20 three-year scholarships for MBA students from emerging economies, including Africa, Asia, Central and Eastern Europe and South America. This was the first corporate scholarship programme with a focus on emerging economies at Kellogg, which in recent years has developed courses and a study-and-travel programme aimed at fast-growing parts of the world, Robert Korajczyk, senior associate dean was quoted as saying.

Mr Mittal sits on the executive board of the Indian School of Business in Hyderabad, India, which was  co-founded by Kellogg, the London School of Business, and the Wharton School of the University of Pennsylvania.

Community Responsibility

Mr Mittal also believes that his businesses should play a major role in supporting the communities in which
they operate. The ArcelorMittal website states: “Every big company has a responsibility to contribute to the wellbeing of its people, their families and the society in which it operates — in short, put something back into the community.

Some of our operations are located in developing countries with pressing economic and social needs. Mittal Steel is often one of the biggest foreign investors. As a major employer, we have a big influence on the local economy. In some cases — such as Poland and the Czech Republic — we are  committed to spending heavily on social projects as part of the privatisation agreements negotiated with government agencies. But our commitment runs deeper than that.”

The steel company has thrown itself into a variety of community projects ranging from the construction of a
church in Romania to the sponsorship of a football team in the Czech Republic. Support has been provided in the education, healthcare, sports, enterprise and cultural fields in places as far apart as Kazakhstan and South Africa, the USA and Algeria. In 2003, Mittal Steel spent around $6 million on community projects.

Supporting Education

The company has instituted a global programme, with its central theme to support education. “The sharing of knowledge and the encouragement of personal development are central to our business philosophy. But above all, it reflects the importance of education in allowing people in more deprived communities to make the most of their potential — with consequent benefit for the wider community. Mittal Steel is committed to playing its part in that process,” the website notes.

In the Czech Republic, as part of an agreement concluded with the Czech National Property Fund, the government agency that negotiated the privatisation of the steelmaker, Nova Hut, ArcelorMittal invested over $8 million in the Moravian- Silesian regional development fund. A proportion of the money has gone to
support a programme for advising small towns and villages in the region on how to utilise European Union funding for projects. The remaining funding went to two grant programmes aimed at job creation.

In South Africa, the company has donated over R177 million (US$23 million) to community development projects over the past 10 years through the company’s social investment arm, the Mittal Steel South Africa Foundation. The bulk of the money has gone on education. Mittal Steel South Africa seeks to partner  programmes that impart sustainable expertise among South Africans through the provision of quality education and vital technical and related skills development.

A Science Competition for Children

The company’s latest project is to sponsor the South Africa’s National Science Olympiad. A countrywide science competition for children, the Olympiad comprises a mix of curriculum-based and general knowledge questions. It is a key part of the government’s commitment to develop the country’s science and technology base.

Mittal Steel has sponsored and supported local football, basketball, handball and other sporting activities in
the Czech Republic, Romania and Algeria. The company’s longest-running, and most high-profile, sporting link is with the West Indies cricket team. The company has been associated with West Indies cricket since
1994 when it was the official sponsor of the side’s tour of the Indian sub-continent.

In Kazakhstan Mittal Steel has played a far-reaching role in community development since acquiring Mittal Steel Temirtau in 1995. “It is no exaggeration to say that we have been instrumental in resuscitating life in the city of Temirtau and the surrounding area,” the company claims.

“We have become the main provider of electricity and heating to the city (at the lowest prices in Kazakhstan); run the tramways; and help manage and support the health services, a local newspaper, a television station and rest camps. We run a series of summer camps for children and organise similar social events at other
times of the year.”

More than Beautiful Homes

Lakshmi Mittal has proven himself to be an astute businessman who first helped himself and his operations to become profitable. He made excellent moves in acquiring underperforming operations and turning them into profitable enterprises. As he built his companies, he took more of a leadership role in the industry as he worked to make it more sustainable and less sensitive to market fluctuations that had previously plagued it.

Mr Mittal’s operations have long shown their sense of responsibility to the community, and he now seems to be taking a greater interest in using his vast fortune for more than just blow-out parties and beautiful homes.

Community Contributions

In Kazakhstan Mittal Steel Temirtau:
- has invested over $2 million in a new tennis complex — which ranks as the one of the best sporting facilities in the whole of Kazakhstan.

- has partnered with a local organisation in constructing modern facilities for the Karaganda Metallurgical
Institute, the only institute in Kazakhstan to provide education in ferrous metallurgy.

- collaborates with the International Finance Corporation, an offshoot of the World Bank, to encourage
the development of more small and medium-sized businesses.

In Romania, Mittal Steel Galati has built a church for the local community at a cost of over $1 million.

In Algeria, Mittal Steel Annaba has provided $100,000 of direct aid for those affected by floods in late 2001

- helped in restoring a local mosque.

- sponsored a festival of children’s theatre to encourage young performing talent.

In the USA, Ispat Inland raises almost $1 million a year for local charities through the United Way by encouraging payroll deductions — which were supplemented by a $242,000 corporate contribution in 2003.

- regularly provides brainpower and financial support to a number of notfor- profit and community organisations. Among the community projects in which Ispat Inland are involved are a local community centre facility in a depressed neighbourhood and plans for a Salvation Army community centre.

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