New York: World’s largest steel-maker ArcelorMittal will focus more on emerging markets, including India, and expects to return to the pre-crisis level by 2012, the company’s chief Lakshmi N Mittal has said.
“Growth will be a slow, progressive recovery. Maybe by 2012, we could come back to the pre-crisis level. Growth will only come from emerging markets. That is where we will focus,” India-born Mittal told the Wall Street Journal in an interview.
“On the steel sector, we will start looking at Brazil and India and (Commonwealth of Independent States) countries.”
Mittal, one of the world’s 10 richest people, said the worst is probably behind but the growth trajectory the company had been on since the merger of Arcelor SA and Mittal Steel Co in 2006 is not going to return anytime soon.
ArcelorMittal posted losses in the last three quarters, the latest being $792 million for three months ended June. Analysts expect it to post another loss this quarter.
“... it would been far worse if the steelmaker did not shut mills, slash production (by) about 35% and lay off thousands of workers,” the India-born steel tycoon said.
He further added that his new success mantra will be slow and progressive growth. “We will be much more selective and now we have to take a slightly different view. So instead of finishing a project in 2011-2012, we will finish in 2014,” he said.
“We will work on our mining projects - Liberia, Senegal - and we will continue to expand in the mining sector,“ the Mittal told the newspaper.
Terming the crisis as a shock, Mittal said his company took lots of steps such as production cuts, inventory cut and cost cutting.
“We reduced our fixed costs by $10 billion, which is about 30-35% of our total fixed costs, in a period of nine months,” he said.
Mittal pointed out that productivity in the emerging markets is also going up.
“If we look at some of the plants in China and some of the plants in India, they are catching up really fast in terms of productivity.
“We have to work with the unions to ensure that they understand what is competition and productivity in the emerging markets,” he said.
According to him, the question to be addressed is how to make the industry in the Europe and the US competitive and whether they could survive in the next 30 years going forward.
“The answer lies in making Western plants more productive and reducing their costs,” he noted.