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The steel industry needs to start benchmarking itself against leading global manufacturing and service companies in order to activate its long-term potential, Lakshmi Mittal, president and chief executive officer of ArcelorMittal, said on June 20.
Speaking at the annual Steel Success Strategies Conference in
Mittal said that while the steel industry has been focused on becoming sustainable for some time, historically this had related to the ironing out of the industry’s cyclicality and volatility. Now, he said, it is time to work toward a sustainable model focused on customer and stakeholder satisfaction, not only self-preservation.
“If the past few years have been about ensuring our survival, the future must be about recreating an industry admired for its operational excellence and quality of application and product,” he said.
Mittal advised steel companies to work to emulate the strict quality criteria: “We have to think more like a service company, which are customer demand led and innovative, rather than supply driven.”
He also said that steel companies needed to work more closely with their customer base, implementing a new partnership approach to ensure they fully understand the benefits the new sustainable model can bring.
“There are a number of benefits to our customers,” he said. “It enables us to continue to invest heavily in R&D and product development. It enables us to meet the most sophisticated customer demands and improve the quality of our products. It enables us to offer global solutions with consistent quality anywhere in the world, whether a developed or developing market. It enables them to better manage their own input costs. It enables us to identify new value proposals for them.”
Furthermore, Mittal underlined the important positive contribution to sustainable development the industry makes at a process level, but even more importantly, thanks to its products – for instance, in the building and construction sector:
"Increasing urbanization requires safe, affordable, aesthetic, sustainable and rapid construction,” he said. “Steel is the perfect material for this. It can be built more quickly. It is 50 percent lighter than traditional materials. It is environmentally friendlier, with 80 percent of steel used in construction today coming from recycling. Composite construction using steel creates considerable energy savings and reduces CO2 emissions."
One year after the creation of ArcelorMittal, Mittal also provided an update on the merger.
“Integration is progressing very well and we are making excellent progress in creating a united culture and operational approach,” he said. “Our scale has created an enormous knowledge pool from which all units can benefit. Operationally, we can leverage expertise in more established markets to our operations in developing ones. Our product and geographic diversification has created a more stable earnings base. Our enhanced stability has enabled us to increase our R&D budget to ensure we produce the most sophisticated products. We are able to offer customers a global solution with a common standard.”
ArcelorMittal is the world's number one steel company, with 320,000 employees in more than 60 countries. The company brings together the world's No. 1 and No. 2 steel companies, Arcelor and Mittal Steel. ArcelorMittal is the leader in all major global markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. An industrial presence in 27 European, Asian, African and American countries exposes the company to all the key steel markets, from emerging to mature, positions it will be looking to develop in the high-growth Chinese and Indian markets.
ArcelorMittal key pro forma financials for 2006 show combined revenues of USD 88.6 billions, with a crude steel production of 118 million tonnes, representing around 10 percent of world steel output.