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ArcelorMittal CEO Says Quality, Sustainability are Key to Steel’s Future

06/21/2007 - To stimulate its long-term potential, the steel industry needs to start benchmarking itself against leading global manufacturing and service companies, according to Lakshmi Mittal, President and CEO of ArcelorMittal.

To stimulate its long-term potential, the steel industry needs to start benchmarking itself against leading global manufacturing and service companies, according to Lakshmi Mittal, President and CEO of ArcelorMittal.
 

One year after the creation of ArcelorMittal….
 
“Integration is progressing very well and we are making excellent progress in creating a united culture and operational approach,” said Lakshmi Mittal, President and CEO of ArcelorMittal. “Our scale has created an enormous knowledge pool from which all units can benefit.
 
“Operationally, we can leverage expertise in more established markets to our operations in developing ones. Our product and geographic diversification has created a more stable earnings base.
 
“Our enhanced stability has enabled us to increase our R&D budget to ensure we produce the most sophisticated products. We are able to offer customers a global solution with a common standard,” concluded Mr. Mittal
Speaking at the annual Steel Success Strategies Conference in New York, Mr. Mittal said: “I think we are all agreed that today the industry is in a far healthier position. But similarly I feel that the new period of stability we have entered calls for a new focus. We have succeeded in proving that the steel industry has the chance of a future. Now we have to concentrate on building a steel industry for the modern age. One which is quality driven in terms of product, process and supply chain.”

 
Although the industry has been focused for some time on becoming sustainable, Mr. Mittal said that this approach has historically related primarily to ironing out the industry’s characteristic cyclic, volatile nature. Now, he said, it is time to work toward a sustainable model that is focused on customer and stakeholder satisfaction — not just self preservation.
 
“If the past few years have been about ensuring our survival, the future must be about re-creating an industry admired for its operational excellence and quality of application and product.” Mr. Mittal advised steel companies to work to emulate strict quality criteria. “We have to think more like a service company, which are customer-demand-led and innovative, rather than supply-driven.”
 
Mr. Mittal said that steel companies need to work more closely with their customer base, implementing a new partnership-based approach to ensure they fully understand the benefits the new sustainable model can bring.
 
“There are a number of benefits to our customers. It enables us to continue to invest heavily in R&D and product development. It enables us to meet the most sophisticated customer demands and improve the quality of our products. It enables us to offer global solutions with consistent quality anywhere in the world, whether a developed or developing market. It enables them to better manage their own input costs. It enables us to identify new value proposals for them.”
 
The industry makes an important, positive contribution to sustainable development at the process level, emphasized Mr. Mittal, but it makes an even more important contribution through its products, for instance in the building and construction sector: "Increasing urbanization requires safe, affordable, aesthetic, sustainable and rapid construction. Steel is the perfect material for this. It can be built more quickly. It is 50% lighter than traditional materials. It is environmentally friendlier, with 80% of steel used in construction today coming from recycling. Composite construction using steel creates considerable energy savings and reduces CO2 emissions."  
 
ArcelorMittal is the world's largest steel company, with 320,000 employees in more than 60 countries and the heritage of the former Arcelor and Mittal Steel. ArcelorMittal leads a number of global markets, including automotive, construction, household appliances, and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 27 European, Asian, African and American countries exposes the company to all the key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets. Key pro-forma financials for 2006 show combined revenues of USD 88.6 billion, with a crude steel production of 118 million tonnes, representing around 10% of world steel output.