When LN Mittal signed an MoU with GS Verma, CMD of SAIL, in London late last week to set up a unit in India to make auto-grade steel, it was a small victory for the owner of ArcelorMittal, the world’s largest steelmaker.
For a decade now, the London-based billionaire has been trying to set up a new steel plant in his home market. His original plan was to set up steel plants in Odisha, Jharkhand and Karnataka. In 2013, he shelved the Odisha project after the company failed to acquire enough land to set up the plant. He had tried for eight years.
Acche din?
Even in Jharkhand and Karnataka, the progress, if any, has been at a snail-pace. While ArcelorMittal has land in Karnataka, it is yet to be allocated mines; and in Jharkhand the situation is just the opposite — it has land but no mines. Surely, Mittal’s days in India are yet to become acche even after a year of the Narendra Modi government.
Bleak background
To make matters worse, ArcelorMittal continues to struggle since the 2008 slowdown dampened global steel industry. Early this year, rating agency S&P downgraded the company's credit outlook on lower-than-expected profit. And personally, the entrepreneur – once toasted all over the world – has seen his net worth dipping. He is now second to the Hinduja brothers among Indians on the UK rich list.
Against such a bleak background, the MoU with SAIL surely would have brought a smile to Mittal’s face. Reports say that it might take up to four years for the plant to be ready and will be Mittal’s first plant in India built from the scratch. Currently, the only exposure Mittal has in the Indian steel market – fourth largest in the world – is through its 29.5 per cent stake in Uttam Galva Steels, the Mumbai-based company owned by the Miglani family.
Two years ago, rumours were abounding that Mittal might want to take over Uttam Galva Steels. But the Miglani-owned company later clarified that it has not received any such proposal. Mittal, a master of acquisitions and mergers, hasn’t yet shown his hand on this count.