Steel Mogul Lakshmi Mittal Turns Over CEO Role To Son -- Update
February 11 2021 - 1:33PM
Dow Jones News
By Alistair MacDonald
Lakshmi Mittal built what was until last year the world's
largest steelmaker, ArcelorMittal. On Thursday, he tapped his son
to take over amid rising domination of the industry by China and
growing investor pressure to produce steel more cleanly.
ArcelorMittal said Aditya Mittal, 44 years old and currently the
company's chief financial officer, will replace his father as CEO.
The elder Mr. Mittal will stay on as executive chairman.
Aditya Mittal's promotion represents a generational change of
the guard long in the making at ArcelorMittal, the Luxembourg-based
steelmaking giant that is almost 40% owned by his family. He told
reporters Thursday that the shift "is much more evolutionary than
revolutionary." Lakshmi Mittal said the two had been effectively
running the company together.
Aditya Mittal was already helping lead the company's effort to
shift production to less carbon-intensive steel and, following the
rest of the industry, to manufacturing sites in the developing
world.
Raised in India, Lakshmi Mittal laid the foundations of his
company with a single steel plant in Indonesia in 1976. He set off
on years of acquisitions, mainly in Eastern Europe and the
developing world. Mittal Steel became the world's largest
steelmaker by production after buying Arcelor, a European
conglomerate, in 2006.
The company held that title until last year, when steel analysts
said it was overtaken by China Baowu Steel Group Corp. This
reflects a long-term shift in steel production away from the
developed world. China alone was responsible for 56.5% of global
steel production last year, with the European Union, one of
ArcelorMittal's largest markets, producing only 7.4% of output, and
the U.S. responsible for less than 4%.
The younger Mr. Mittal inherits a company that has reduced the
heavy debt load built up over some 45 years of deal making by his
father. The company said Thursday that it has net debt of $6.4
billion, the lowest level since the Arcelor acquisition. The
company has also shed some of his earlier acquisitions, including
the sale last year of ArcelorMittal's U.S. steel business.
The Covid-19 pandemic has hit demand, outside of China, in an
industry that was already suffering from low margins amid massive
oversupply. The industry also faces growing pressure from
governments and investors to shake off its century-old reputation
as a smoke-belching industry.
Mr. Mittal said there would be three priorities under his
leadership: sustainability, cost competitiveness and emerging
markets.
"The biggest challenge of the day is how we lead the
decarbonization of the steel industry," Aditya Mittal said in an
interview. He has promised a shift away from using coal to fuel the
steel making process to cleaner fuels like hydrogen. Mr. Mittal
said that the company is piloting a hydrogen plant in Germany and
capturing waste gases at a plant in Belgium.
"We have a lot of emerging market assets, and in all these
geographies we have growth plans," he said.
Write to Alistair MacDonald at alistair.macdonald@wsj.com
(END) Dow Jones Newswires
February 11, 2021 13:18 ET (18:18 GMT)
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