Lakshmi Mittal grew up in Western India in a home without electricity or running water. But earlier this year in a 34 billion dollar deal, his company Mittal steel merged with European steel company Arcelor to create the world's largest steel company.
56 year old Mittal now has a personal fortune of 27 billion dollars, making him the worlds 5th richest man.

 

You know you described the merger process with Arcelor, the largest steel company in Europe, as a "boxing match". Why did you describe it that way?
LM: It had several rounds, and this process required that we win every round. And there were many rounds where it was kind of a draw because no side was winning. There was a stalemate. There was a round where we almost lost. And we were almost knocked out when Arcelor brought in Severstal on the table.

This was the Russian company?
LM: That was the Russian company. And we felt that was a knockout. And to recover from this knockout, and to start fighting again, is like a boxing match. And finally we knocked them out and the merger has been successful.

Were you scared of being knocked out, perhaps even quite early? Because I remember when I last met you, you were so tense.
LM: I remember when I met you in February, I was really, really stressed, because it was the beginning of this match. And I heard and I listened to various emotional comments from different sites, politicians, company, the management.

Of Arcelor?
LM: Of Arcelor. And that really was the beginning of the discussions, the beginning of the match. We heard comments from different governments which were not favored to us. And we saw the reaction. So, all of this were the stressful moments in the beginning of this fight.

Refresh our memory. What did these governments say and how did you take it? Because again, to go back to February, even you were a little emotional, were you not?
LM: I was emotional when I heard negative comments from these governments. Some media call it racist comments. But personally I did not experience it. But what I was reading at that time was not pleasing and I was afraid that because of those comments we would not succeed in this merger attempt. Fortunately as we moved forward in the process, everyone realized that those comments were not warranted, and those comments were not helpful for the governments and also for the management of Arcelor.

What was it that these governments said that really rankled you? That made you angry, even as emotional as you were?
LM: I read in the media that they started talking about Indian company, companies from East coming to the West, some kind of funny money, or monkey money. These kinds of comments were not justified. We are an open company based in, listed in the New York Stock Exchange, a global international steel company. We are not an unknown company in the steel industry. We were the largest steel company in the world, and we wanted to merge with the second largest company, and that was the merger between the two open companies. So I, we, felt that this was the best merger opportunity for the steel industry.

Why did you feel that way?
LM: The steel industry has always been fragmented and I've been saying since 97, 98 that the steel industry needs to be consolidated, and the process began but did not take momentum. Then came 2000, when the industry suffered very badly. At that period, everyone realized that the steel industry should be consolidated.

While you were talking to Arcelor, the CEO of Arcelor said : "Hey listen! We are a European company and we actually manufacture perfume. You Mittal Steel manufacture sub-standard products. You are the manufacturers of Eau de cologne", these were his exact words. You are smiling now, but you weren't then...
LM:They are very emotional comments. They are not rational comments.

But they angered you.
LM: Fine. That's part of the fight. But now the history is behind us. And the integration between the two companies have begun very well, we have an excellent team in place. I would say that we have the best management team in the steel industry in the world and we have been able to put top class team. They have started integration since six weeks, and I have been seeing the progress. I am really pleased with the progress, what we have made with the company.

Now when you look back at this deal, Lakshmi, this is about a person who was born in India, based in London, taking over a French company, based in Luxemburg. Is this a sign of the new global times that we live in?
LM: Yes this is the real global company, and is a sign of globalization. Even in the top 24 senior management, I have eight nationalities. We have people from all the major worlds and if you look at our top 400 people we would be having at least 35 nationalities in the group. So, I can clearly see that how a global company should function and why such diversity at the top management is very important and is key to success.

Earlier, just before the merger, you made one promise and you repeated that several times. You said 3 words: "No job cuts". Will you live up to that?
LM: Yes. We have always

In good times and bad?
LM: We have always lived up to our commitments in the past. And that is a very successful record we have. I have said that they will not be any job cuts arising out of this merger. Both the companies have their own commitments of investments, growth, and employment. And we are committed to that.

Coming back to the question about racism. You really haven't answered that. Did feel that then, do you feel that now?
LM: Personally, I never experienced. I must tell you. I met all the politicians, senior politicians in various countries, I met media, I met shareholders, stake holders, employees. I never personally experienced any kind of that feeling. On the contrary, I felt positive reception and reaction with the masses.
So while you were in the ring, people were really rooting for you?
LM: You see, in the ring you always have two kinds of crowds. Otherwise the match is not interesting.

There were people trying to put you down and people trying to support.
LM: Yeah. That is how the game is played. Always, if I have only supporters there would be no fun and no challenge.

So are you willing to forget and forgive those people who were booing you while you were in the ring?
LM: I don't even remember them! Life moves on. Life moved on. We have a new team. A very exciting team and that is what matters.

How important is personal wealth for you? Is this important, or is the concept of creating wealth for others more important?
LM: I think first of all I tell you I never calculate my wealth.

Why?
LM: It doesn't matter. When I earned my first million dollars it mattered. After this, the wealth does not matter. What matters is what you do in the life. Are you happy? Are you satisfied? Are you successful? And this has been my target, this has been my vision: create something unique and different in the business in which you are in. That's how I moved in the steel industry. When I left India, I started in Indonesia. I learned my business for more then 12, 13 years in Indonesia, and I felt confident, I felt satisfied. So, I looked for more opportunities.

But why is it, you say, that this wealth is not important to you? Because, I mean, face it Lakshmi, you live in perhaps the most expensive home in Britain. And when your daughter was getting married you put out a lavish wedding, some say 60 million dollars you spent on the wedding alone. So how do you reconcile that with what you just said?
LM: I never said this that I spent so much in my daughters wedding. It is all media speculation. And I live in a home in London, but I like the house. The whole family loved the house, so we bought it. And that's all about it. It has nothing to do with, because we have so much money we like to spend it. I think we like to live happily. After all, I'm a family person. I have two children, I love my children. So, we wanted to do a good wedding for them, and we did.

From a steel maker, Lakshmi, you have become a superstar. Now your father warned you, and correct me if I am wrong, he said to you: "Lakshmi if you become high profile, that is the day you are in trouble". Do you remember those words?
LM: I'm not a high profile person.

You have the world's media chasing you all the time.
LM: Yeah, that is because of this event which cause so much media frenzy, but normally I'm a really low profile person, I continue to focus on my work, spending time with my family and friends. I never wanted it but this particular event caused so much of excitement among the media. Now I think everyone will get back to their work and we also will be normal.

You describe yourself as a family person, your children you said mean a lot to you. And they also play a big role in your business. Your son is the CFO of Arcelor-Mittal Steel, your daughter Vanisha, too plays a role. Why is it they are so involved in the business? Didn't they want to do something themselves? Or?
LM: You see we are a small family. My wife was also involved in my business until 95, 96. And since my children were small, every day in the evening on the dining room table they would hear about the business talking about the steel industry, they would come with me to the steel plant in the night, when I would go for a round or a visit. So they have felt themselves more comfortable with the industry. And when they grew up, when they were in college they would visit me to the various facilities. So therefore I think they feel very confidant in what they are doing and my son has been very successful as a president and CFO of Mittal Steel.

He was the person who actually advised you first that you should try to take over Arcelor.
LM: Yeah, yes. He has been involved in my business for 10 years. He led the first IPO of Ispat International.

That was one of your steel companies, Ispat international?
LM: Yes. And he also learned all of the mergers and acquisitions of the group. And all the time we have been discussing the strategy. And he talked to me last year that we should look at Arcelor.

How did you get from India to becoming this steel baron? What have been you management mantras Lakshmi?
LM: I think when I left India, in 76, I had no choice but to succeed.

Why? You were scared of failure?
LM: I landed up in a country in Indonesia, where the Japanese were dominating the whole steel industry. A person coming in from India who had no background of running such a large company, and competing against the Japanese was a big challenge. I was the first foreign company, non- Japanese company, in the steel industry. So that taught me a lot of lessons that we have to work very hard. We must have a lot of commitment and dedication to the business. We have to deliver a better product then our competition. We have to have better productivity then our competition.

You grew up in a very simple home in Western India, in the desert, but then perhaps one of your family members had a sense about your future, because you were named Lakshmi. Explain to everyone what your name means.
LM: Lakshmi stands, in India, for Goddess of wealth.

So they had a sense that, perhaps, you would grow up to be rich?
LM: Perhaps they wanted this way.

Do you think about your name sometimes? And has that been any motivation at all?
LM: No, no, it never occurred to me. I grew up in a place where there was no electricity, no running water, but I think that's good in a way. It makes you more strong. If you start your childhood, with difficult times, difficult period, and in a challenging environment you become more stronger in your life. I had a very modest childhood, nothing fancy.

Describe that. Describe your household. Describe where you lived.
LM: I was one of the young boys among so many children in the house. My father used to be very busy in his own business. My mother would take care of me. I remember when I got my results for the University, my father was even not even aware that I stood top in the University. I sent him a telegram because I couldn't afford to call him. So we come from very modest family, working hard in the studies, going by buses or walking to the schools and universities, these things I can never forget.

Your father was in the steel business himself.
LM: Yes.

He then sent you to Indonesia, he packed you off as a 25 year old, how scared were you? He said: "go run the mill".
LM: No, in fact I went on a holiday to South East Asia with my friend and my father wanted me to sell a plot of land, which he had bought as he felt that it would not be possible to do something with the plot. When I arrived there, I changed his mind. I said: "I would like to build a steel company in Indonesia". And that's the beginning of life.

After that you went on a world-wind spree. You started buying companies everywhere you started buying companies from Trinidad and Tobago to South Africa. How difficult was that? Because here you were somebody from India, with no international exposure. And then, just doing these huge global deals?
LM: It looks so big now, with everything step by step. After 14 years I ventured into the second company which was in Trinidad, which was I think the first important milestone in my career. I didn't have money, so I took this company on a lease basis, with option to buy after 5 years. So there was a challenge and there was urge to earn money to buy. Because for 5 years if you don't earn enough, you could not have bought it. So that drove me to continue to work hard and turn that company around. And then the next year it was Mexico, we also succeeded there. We also didn't have enough money to buy, so we borrowed from the bank and from the investors and that company turned around with a good team. And if you have one or two successes, you can take bigger challenges in your hand.

One of the criticisms that have been leveled against you, Lakshmi, is that unlike Bill Gates and perhaps Warren Buffet, you haven not really done much for charity. Or your charitable acts, as some put it, haven't been highlighted. What would you like to say to those words?
LM: First of all I'm still young. I'm not like Warren Buffet, so I have still work. It is not true that we aren't doing enough for charities we have got a lot of initiatives in different countries where we have business. And all these companies are doing charitable work, are helping society and community. Now, recently we are going to form Arcelor-Mittal foundation so we are going to form all of our charity under this foundation and we will continue to work for society and community on a global basis.

What one issue would you like to tackle in the world through this Arcelor-Mittal charity?
LM: I think we continue to focus on education and health. Because we have business in 27 countries and, if you look at our business, first we like to help those countries where we have business. Education is priority and in some countries health is priority, so we will divide our focus between health and education.

What's your dream Lakshmi? 56 years old, what do you dream of? Whats next?
LM: Keep on working. Keep on working there is still a lot to do!

 

Source:A famous international Business Weekly.