Men of mettle

There's a little steel in all our lives, they say — here's a look at the men who make it happen.

The need for steel has permeated every aspect of our lives. It is not just heavy construction, petrochemicals and engineering that needs steel but every day households use the material in some form or other.

A recent report from the Bureau of International Recycling (BIR) points out that global steel production is expected to rise to 1.5 billion tonnes in 2009, up from 1.4 billion tonnes in 2008. According to Christian Rubach, President of BIR Ferrous Division, Brazil, Russia, India and China (BRIC) were leading the surge.

According to MEED Insight's Middle East Steel 2008, the region's steel industry is growing rapidly to meet the requirements of rapid industrialisation. The Middle East produced 21.1 million tonnes of raw steel in 2006 and consumed 41.6 million tonnes of finished goods. This is forecast to rise to 35 million tonnes of production and 60 million tonnes of finished goods by 2010.

The National Steel Policy formulated by the Indian Ministry of Steel envisages crude steel production of 110 million tonnes by 2019-20. Clearly, steel will remain a growth industry for a long time.

The need for steel is best expressed by ArcelorMittal, the world's largest steelmaker, which recently announced net income of $2.37 billion (about Dh8.73 billion) for the first quarter that ended March 31, 2008.

It was an increase of 5.37 per cent over the corresponding period a year ago. It also posted sales of $29.80 billion (about Dh109.52 billion), a rise of 21.78 per cent over last year.

In euros, sales increased by 6.53 per cent to 19.89 billion euros (about Dh113.27 billion).

According to Lakshmi Mittal, owner of ArcelorMittal, "Despite global economic uncertainties, we are continuing to see strong demand for steel and a healthy pricing dynamic. We have also now fully captured the 1.6 billion dollar of synergies that we expected from our successful merger with Arcelor."

In its bid to leverage profits, ArcelorMittal plans to spend at least $20 billion (about Dh73.4 billion) in setting up two new integrated steel plants in India from 2009.

The two projects, based in the eastern states of Orissa and Jharkhand, will be the largest foreign direct investments in India and will add 24 million tonnes of annual steel production capacity.

ArcelorMittal has identified India as one of its key growth markets in its push to reach 150 million tonnes of production by 2012.

As part of its plan to achieve 75 to 85 per cent self-sufficiency in iron ore by 2014-15, the company has also signed a ten-year agreement with Brazil's Vale, and is looking to increase supplies from Ukraine, Liberia and Senegal. It is also working on a 14.9 per cent stake, to cost about $606 million (about Dh2.22 billion), in Australia's Macarthur Coal, a major supplier of pulverised coal for use in steel making.

With a presence in more than 60 countries, ArcelorMittal is the leader in all major global markets, including automotive, construction, household appliances and packaging. It is listed on the stock exchanges of New York, Amsterdam, Paris, Brussels, Luxembourg and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia.

The future couldn't be brighter with Wharton trained son Aditya, who has also inherited his father's sharp business acumen and adventurous spirit, playing a lead role.

But, ArcelorMittal is not the only big player in the steel market. Tata Steel, another steel major, along with Brazilian mining giant Vale and other joint venture partners, is undertaking a massive expansion of the Carborough Downs coal mine near Moranbah in central Queensland, Australia, for an investment #of $379.41 million (about Dh1.39 billion).

A Tata Steel release states, "The estimated capital investment is $379.41 million. The construction is scheduled to commence in May 2008 and the commissioning of large-scale and new mining equipment is expected by
mid 2009. The decision on expanding production at the Carborough Down coal mine gives Tata Steel an opportunity to explore larger areas for coal deposits. This will be
a potential source of partially meeting the company's raw material requirements and enhancing the long-term competitiveness of its global operations."

Tata Steel along with KZN recently constructed a state-of-the-art ferrochrome smelting plant in South Africa that cliams to be ‘the cleanest in the world'. It is the first greenfield overseas project of the Tata Group outside India and adds to the rich portfolio of the group, which includes hotels, bus assembly plants telecommunications, and mining etc.

Ratan Tata, 16th among the 30 most powerful in the British construction sector, has a ranking higher than even the UK's Minister for Housing, Caroline Flint, who is 18th. The list, compiled by UK-based digital magazine Contract Journal for its May 14, 2008 issue, adds, "Already providing products that feature in many British homes, after its takeover of Tetley in 2000, Ratan Tata's Tata Group now supplies the mainstay material in most of its offices — steel."

Tata Corus, named after its acquisition of steelmaker Corus for about £6.2 billion (about Dh44.58 billion), has a 50 per cent share of the UK market. Corus was formed from the merger of Koninklijke Hoogovens NV. with British Steel Plc on October 6, 1999.

The company was taken over by the Tata Group in April last year.

Tata Steel wants to boost its annual output of 8.7 million tonnes to 15 million tonnes by 2010. By 2030 it is looking at an output of 30 million tonnes. The Tatas pulled off India's biggest ever takeover of an overseas company to buy Corus, and in 2006 it acquired Singapore's NatSteel, which also has a presence in Thailand, China, Malaysia, Vietnam, the Philippines and Australia. This was followed by the acquisition of Thailand's Millennium Steel for a $421 million (about Dh1.54 billion).

Back home, Tata Steel is planning to raise the production capacity at its Jamshedpur plant to 10 million tonnes per annum from 6.8 million tonnes at present. Managing Director
B. Muthuraman revealed that the company is making serious overtures in Orissa and was keen to increase production "as consumption was outstripping demand".

Essar Steel Holdings Limited, part of Essar Global Limited, recently announced its acquisition of Esmark Inc. for $1.1 billion. According to Shashi Ruia, Chairman, Essar Global, "This is one more step in realising our global steel vision of having world-class low-cost assets with a global footprint.

"Having acquired Algoma and Minnesota Steel last year, this acquisition provides us with an excellent platform for the Canadian and North American markets. With the above acquisitions of Esmark and projects under implementation in Trinidad and Tobago, Essar Steel Holdings will have a 10 million tonnes of flat steel production in the Americas."

As the global village grows, the need for steel is getting more urgent. India, one of the leading players, produces international standard steel of almost all grades and varieties, and has been a net exporter for many years. China, India and other emerging economies, in particular, will propel the need for steel.