Aditya Mittal to face first ‘litmus test’ in ArcelorMittal

Thirty-eight-year-old Aditya Mittal will face his first ‘litmus test’ on Friday, as the investment fraternity expects him to spell out ArcelorMittal’s long-term outlook after the third quarter earnings.

The whole debate started after Sudhir Maheshwari, seen as a close confidante of steel baron Lakshmi N Mittal, put in his papers. Till now a frontline person in the Group, Maheshwari will leave on March 31, 2015.

Insiders say Maheshwari, the man responsible for major mergers and acquisitions (M&As) of the Group, was also a guiding force for Aditya, who himself was part of these decisions. Butthe young scion has always been low-key.

An ArcelorMittal spokesperson told Business Line: “…ArcelorMittal has very strong succession planning in place to ensure a smooth transition when any executive leaves the group or retires. The Group Management Board spends two days each year discussing this topic in detail, to ensure that there are always three or four people being developed for every management position within the company.”

In the case of Maheshwari, his roles and responsibilities will be shared between a number of senior managers who have been with the group for years, so his departure will have minimal operational impact, the spokesperson said. For example, M&A will now be headed by Ondra Otradovec, 46, Vice-President of M&A, who joined the company 11 years ago from HSBC and has been closely involved with all acquisitions during that period.

Aditya Mittal, who is the Chief Financial Officer (CFO) and CEO of ArcelorMittal Europe, responsible for Flat Carbon Europe, Long Carbon Europe and distribution solutions, faces not only financial challenges of the Group, but will also have to take together two generations of human resources, say those tracking the company.

In Europe and North America, the Group’s average employee age is in the range of 42-50. The Group has proprietary workforce planning tool developed and tested in 2013 and is undergoing a pilot phase in 2014. The clear focus is on youth.

Typically, the third quarter (ending September 30), is a weak quarter for ArcelorMittal across the group’s business in Europe, Brazil and South Africa. The company follows calendar year. Though little is available in public domain about the Group’s long-term plan, the spokesperson said there is constant dialogue with the analysts and investors who follow the Group.

“On the occasion of our third quarter results, we will, as always, share the quarterly numbers and provide comments on the market and outlook for the next quarter as well as discuss key issues and developments for the business,” the spokesperson said.Investors are also watching whether Aditya Mittal will focus on certain geographies only or open his cards on India. ArcelorMittal has been maintaining that it will establish a primary production presence in India only if it makes strategic sense for the overall group.

Global analysts like HSBC IB, Jefferies International, JP Morgan, and Bank of America Merrill Lynch, whom Business Line spoke to said they expect more clarity to emerge on the Group’s future outlook over the coming quarters. However, all are unanimous in stating that Aditya Mittal has been groomed well in his role as Chief Financial Officer.

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