Memoirs of Laxmi Mittal at IIM-A

Steel tycoon Laxmi Nivas Mittal, the richest British of Indian origin, had to sleep in an overcoat and wash with hot water in a bucket when he went to Kazakhstan to buy a company in 1995.

“In 1995, we bought the Karmet Steelworks in Temirtau which at the time had more than 34,000 employees. This was a country we didn’t know; with an extreme climate that alternated from minus forty in the winter to plus forty in the summer. We went to buy a steel plant. In reality, it was like taking over a city which didn’t have a mayor! This city had its own currency, but no hot water and no electricity. The first night I spent there I slept in my overcoat and washed the next day with hot water in a bucket.”

Addressing the 48th Annual Convocation as the chief guest at the Indian Institute of Management-Ahmedabad-for which he flew in the city in a chartered flight straight from London and returned there soon afterwards, all without checking into a hotel! — Mittal narrated in detail how he became what he became, to the applause of over 500 students, their parents and families, faculty, media and others.

“It was a tremendous challenge. But against all odds we succeeded…we learnt that just because others had failed, this did not mean we would not succeed.”

“Many people thought that we were crazy when bought the plant in Kazakhstan. The Wall Street Journal actually wrote that Kazakhstan would be “Mittal’s Waterloo.”

About Arcelor, Mittal said, “When we announced the offer for Arcelor on the 27th January 2006, we were confident that it had a very strong industrial logic. But over the next six months, what started as a stock market offer based on this logic turned into a political fight across a number of different countries, using poison pill defence tactics from Arcelor.”

“It was also important during this period for me not to show my team when I had concerns. Although there were times when I also could not see how we could move forward, I needed my team to stay strong and solution focused. Leadership can often be a lonely business.”

Asking the students to remain determined, optimistic and focused, Mittal narrated his own experience in Indonesia, where he founded his business in 1976 with his father’s help.

“I was recently married and my wife had just given birth to our first child. Arriving in a strange country by myself, knowing no one, not speaking the language and having to start a business from scratch is extremely daunting. I learnt so much from that time in Indonesia; about business and about myself. I learnt that I could adapt to another culture… that I could be happy in a country that wasn’t my home…how to build a business from scratch…how to take on well-established competitors and find a market for our product that didn’t previously exist…to have the confidence in my strategic thinking and my decision making… it takes time to see results and not to expect everything overnight…and I learnt the benefit of hard work.”

He also justified his recent decision about the Florange plant in France where he proposed closure of two blast furnaces. “These are the last two blast furnaces in the Lorraine region, that was once the very heart of European industry but has lost competitiveness. This proposal provoked a hostile and emotional response from many important stakeholders who do not want these furnaces to close. Had we not taken this decision, we would have avoided a lot of criticism and negative media coverage.

“But it would have been the wrong thing to do. European steel demand is down 30% compared with the pre-crisis levels and given demand is not expected to return to pre-crisis level even by 2020 in Europe, we have to take action to resize our operating footprint to the reality of the demand scenario.”

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