In 1995 when Mittals divided their business into the brothers it was felt that Laxmi Niwas Mittal was on the losing side. But later Laxmi showed it did not matter what one got but the important point was what he made of whatever he got. A man is builder of his own fortune or destiny. He charts his own way and determines his goal.
One who is self confident he dares to tread new path. Laxmi Niwas too had selected that new path for himself to tread that led to the global stage of big players.
There was a time raw material used to go to England from India and come back as finished product with value added many times over. Those were the days of British Raj and India was its colony. Fifty years after independence an Indian entrepreneur went to England and became the richest man of that land as NRI, a global industrial king whose business rules in 14 nations of the four continents. The wheel had turned full circle. Laxmi Mittal has set up his steel manufacturing works in both hamispheres of the globe. He had achieved this with careful and clever planning plus using daring strategies. It was a long term operation guided on by astute policies. For setting up his steel business Laxmi Mittal had accurately estimated the global demand in advance.
In British empire sun never used to set and today in the steel empire of Laxmi Mittal the sun does not set. It is always highlighting one of the chimneys of Mittal steel works somewhere in the world. Laxmi has brought glory to the country by his achievements and earned honourable place for our industry on the world stage. His talent has a Midas touch that turns stone into gold via steel. The loss making steel plants taken over by Laxmi Mittal suddenly transform into profit making enterprises. In the field of take overs Laxmi has become a strategist who always ends up in the winner’s circle. He is the acknowledged master of the take over game in the field of steel industry. With his take over and merger strategy Laxmi Mittal cleverly bought the losing steel plants analysed their loss incurring factors and with his innovative businses management converted them into profitable ventures. In this respect he earned the admiration of global steel business community.
Take over—planning and execution
The master of take overs, Laxmi Mittal while buying the steel companies kept the fundamental rules in mind and applied them on the taken over companies with patience and deligence. Before taking over a loss making company he would do industrial reki to identify the negative factors for analysis to see if it was corrigible. If it was corrigible the company qualified for Mittal take over. In this regard Laxmi Mittal holds extensive discussions with his management board. Then the take over conditions are in for considertion. A final take over was always preceded by studies of the situation, financial plus operational reki of the company, identification of loss making factors, elaborate discussions on pros and cons of acquirement and then the final charge if everything indicated the desirability.
The targeted company
The management team has some specialised persons who keep an eye on the steel companies that are running into losses and may become available for take over. The selection is made carefully. The factors responsible for losses are carefully analysed to see of those factors could be removed or moderated to the harmless level. A list of take over worthy steel firms are prepared and then begins the second phase of the take over bid.
Financial analysis
The companies listed for take over are academically put up for financial analysis. Its assests and the liabilities are the very essential part of a take over. The capital investment and assets are carefully assessed. All the liabilities are calculated. Then, there is the question to how much investment the taken over mill will need to make it viable. After take over the amount payable is termed to be made available over a long period in agreed to amounts in a deferred form. It is done to spare the available liquid assests to be put in the plant on priority basis to get it on the track as soon as possible. Once it becomes profit making venture it can take care of the payments of the future instalments of buy deal Mittal has made.
The weak points of a sick plant
The factors or weaknesses that made the plant sick are generally identified before the take over. Second analysation is made after take over to detect if some factor responsible for the sickness of the plant was missed in the pre-take over reki and survey. All those factors are listed and solutions or corrective measures worked out. The feasibility of financial support to the sick unit is considered. If the steel plant needs complete overhaul of the basic infrastructure it is discussed and the decision taken without any delay to cut the losses. If needed new technological inputs or additions are made. The plant may go for upgradation or total modernisation.
Terms of take-over
Before taking over a plant it is essential to know the terms on which the venture is ready for acquisition. How much price is on demand? What will be the structure of management after take over? What are the conditions in respect of employess and mill workers. The representation of two in the new management is decided. It is part of the home work for take over.
Future considerations
After settling the terms of the take over or acquisition and analysis of the financial status of the acquirable mill its future production targets are set. The hurdles in the way of meeting those targets are removed. The new financial policy is worked out and extra capital investment is made. New policy is reviewed after some time. Improvment efforts are made in respect of basic condition of the plant, supply of the raw material and distribution of the finished product. Plans are drawn to improve the quality of the product alongside increasing the production. High standards for quality of the production are set. To implement all the new plans managment group is formed and prepared for the task. Laxmi Niwas Mittal has a group of ten trusted associates who act as his lieutenants to meet various challenges. They have proven worth in meeting targets. Then, the negotiations for formal take over are set in motion.
Negotiations and terms
For negotiation with the prospective acquisition company a negotiator is appointed or CEO himself start the talk. The negotiations are gradually led towards an agreement to make the acquisition possible. All through the negotiations flexible approach is maintained. The talks include the matters related to the workers on the pay roll and social welfare programmes. Providing employement to the local people is also talked about to generate positive mood amongst the public. Native hostility and bad publicity is the least helpful.
Merger of acquisition into mittal steel
If after take over the acquired company maintains independent existence then efforts are made to get it realise that its interest lies in accepting the fact that it was now part of the Mittal Steel and yield to the next step of formal merger. Mittal Steel takes over the rights of the management control of the company. This is how Mittal Steel uses carefully worked out strategy for its expansion through take over and acquistions.
Laxmi Mittal’s plans and strateigies have worked successfully so far. He is known as the industrial doctor who cures and nurses the sick steel mills back into good health or the commander of salvation army who rescues the steel mills in distress. But there also are a lot of people who accuse him of being a predator that devours its victims. After the merger the aquired mill function under the flag of Mittal Steel. The detractors here forget that he is in the field to do business and a businessman always thinks of his interests and dreams of having an empire that never ceases to expand. He is not here to do charity work.
The critics must keep following factors in their minds:
❑ Laxmi Niwas Mittal has aquired several steel industries using his clever and outsmarting business and professional strategies, no doubt. But it is also a fact that mostly he takes over sick steel industries and converted them into profit making ventures through his superior management abilities and cunning business sense besides big resource muscles. Otherwise those campanies could have died anyway.
❑ Laxmi Niwas knows too well that an acquisiton is a very risky proposition. Any miscalculated deal may incur him huge losses. Some X-factor may turn profits into losses. The aquirer hopes to make profits out of a loss making company. It is not easy. An aquisiton comes with a huge risk
factor. Laxmi Mittal takes risk in acquiring and merging a new firm in his group. A lot of surveying, analysing, calculating and estimation are invloved. Nothing should go wrong. It is a high stake gamble. He never uses blackmailing tactics to force a sell out. No one sells a profit earning enterprise. Laxmi Mittal has acquired in adverse situations. He should not be blamed for his acquisitions.
❑ Business or industry is a cut throat world. Competition is fierce where strategies and game plans work. Everything is fair in love, war and business. Survival of the fittest is the rule. The motto is ‘Eat or get eaten.’ Weak and the sick don’t stay alive for long. Either they die or get killed. Laxmi Mittal only revives the sick and help it live on under the protective umbrella of his Mittal Steel. Whatever the name, if there is qualitative improvement is effected a new life is gotten. The change of the brand name matters little. What is important is the interest of the investors, shareholders, management, employees, workers and the consumers.
Acquisition or take over
If acquisition and merger is for the larger good of the people it must be accepted sportingly without being emotional in the context of today’s global scenario where mergers and take overs are happening overtime. The following considerations be kept in mind:
❑ There were some steel making companies that were on the verge of closure. Laxmi Mittal rescuced them by acquisition and put life back in them with his talent, managerial skills, planning and capital infusion. He took risks in investing large sums of money.
❑ A sick plant represents not only the investment made by the owner but the interest of the shareholders and the employees of the company. Sinking of such a company means the dreams of share holders of running aground and drowing of the liveli- hoods of employees and workers. Their families may face poverty and hunger when
the bread winner becomes unemployed. In such a dreadful situation take over by Laxmi Mittal is nothing short of a social service. If the positive side is too bright it should outweigh the negative aspects and does not desreve to be given too much of thought. The survival of the venture and the interest of the majority of the people connected to it must be given the prime importance instead of shedding the tears of emotions.
❑ It is a fact that the products of the large industrial groups are cheaper due to large turnover comapred to those of the small concerns. And the quality of the product also superior. The market reacts according to the mood of the consumer who prefers cheaper items at cheaper cost and qualitatively superior, preferably branded. In today’s competitive business scene the consumer is the king. Finally it is the consumer that order the business and the industry. The detractors of Laxmi Mittal forget that he indirectly follows the dictats of the buyers and enriches the consumer products in quality for their benefit. The result is the more steel products of high standard in the market to satisfy the consumer. The desirability and validity of the purposeful acquisition should not be questioned.
❑ By successfully establishing himself in the corporate culture Laxmi Niwas has proved that in the present day global business age only consideration is that of talent and endeavour. There is no place for racialism and parochialism.
2008 list of Forbes magazine has rated Laxmi Niwas Mittal as the 4th wealthiest person of the world. The truth is that inspite of criticism and accusations Laxmi Mittal has carved a special niche in the world steel business sense and the enterprise. But the fact still with his business remains that in the world steel business the share of Mittal Arcelor is only 10%. 75% steel production comes from the unincorporated sector.
Laxmi Mittal with Arcelor is producing a fine quality steel and the benefit of modern technology goes to the consumers. The question that remains needed to be answered so that if entire steel production is taken over by the corporate houses then what happens to the small scale steel enterprises of the unorganised sector? But things change, systems and patterns also change. The new wave of global corporatisation can not be stopped or washed away. It is the evolution of steel industry that can not be denied acceptance. The rise of an Indian is being questioned but meteoric rise of white Bill Gates was never frowned at. A racialist even though Indian, Laxmi Niwas Mittal would be using monkey money for acquisition of Arcelor. In his view an Indian would be using peanuts or Kauris (sea shells) for business. This was the level of racialism Laxmi Mittal was up against, yet he succeeded against all odds and prejudices.
Ever expansion of ‘steel international’
In 1970s ‘Steel India’ of Mohanlal Mittal was gaining impressive success in the field of steel production and had become a respected name in the business. Then, he started exporting his product to other countries and it began with exports to Indonesia. It was Laxmi Niwas Mittal who visualised the prospect of setting up a steel plant in Indonesia after seeing Birlas set up a mill in Thailand.
To give a concrete shape to his dream Laxmi went to Indonesia to survey the scene. In 1976 a steel plant came up under the banner of ‘Steel International’. It was an important step and a rewarding exercise. For the next 13 years (1976-1989) Laxmi Mittal visited other countries with a specific mission of studying the working of steel plants and giant steel industries with modern technologies there. In 1989 Laxmi Mittal acquired a steel plant in Trinidad and Tobago and steel production began. In 1992 he reached Mexico and acquired a plant there too. In this process he learnt the art of acquiring and recommissioning steel works after restructuring and upgrading. It took him more than 30 years and a great endeavour to reach the height we see him at today. It was not an overnight heist or miracle.
Some famous acquisitions
The story of Laxmi Mittal runs through a course of acquisitions of sick steel mills and converting them into profit making ventures which gradually unfolds how he evolved into a master of that process. It makes a fascinating tale and proves that Laxmi Mittal is not a poacher or steel predator. Infact he would appear to be a salvation worker who saved many a sinking ships for the benefit of others.
Trinidad & Tobago
Trinidad government steel plant was incurring loses since 80s. Due to the government controls it was working at 50% of its installed capacity. The government had handed it over to German firm from Australian management. It was supposed to nurse the mill back to health and mak it a viable venture. But the private German firm could not recover it from the financial mess. Then, Trinidad government approached Laxmi Mittal and requested him to acquire the sick mill. Laxmi took it as a challenge and took it over on lease contract. Mittal team worked on it and found that there was financial crises, management untrustworthy and weak was it on the technical aspect.
Laxmi Mittal made investment of 50 million and reorganised the management. The technical weaknesses were removed and began value added production. In a short period the sick plant regained health and became a productive steel plant. About the feat Laxmi Mittal commented—’Mittal Group gives prime priority to making profit. To achieve that end we reduce production cost and increase production but quality is strictly maintained.’
Mexico steel plant
When Laxmi Mittal successfully nursed back the very sick Trinidad steel plant and converted into a profit making venture the steel world acknowledged his management excellence and technical skills. He arrived like a wonder worker of steel industry. In 1991 Mexican government decided to give its sick steel plant to a private player for conversion into a viable project. They had tried everything to revive the venture but had failed. It was the last thing they were doing.
Mexican government had set up the plant at a cost of $ 220 millions. It was supposed to produce steel for making pipes for an oil pipeline. But due to recession in oil market and devaluation of Mexican currency over the inital proposed capital had not
been fully utilized and the quality of the product had also become suspect. In those circusmstances the finance minister of Mexico informed Laxmi Mittal that they had decided to give the project to some private party and were open to offers. Mittal sent his team of experts to study the status of the Mexican plant. Laxmi Mittal got the assessment report of his team which included the analysis of the management of the plant, financial position, effects of devaluation of Mexican currency and technological aspects.
The report revealed that the steel plant had modern technology based machines and equipments and the work force was young. For want of adequate investment the production level was low which caused despair amongst the young workers. In turn it led to hostility between the workforce and the management resulting in further fall in production level. The infrastructure was world class and the plant machinery and technology was ultra-modern. Laxmi Mittal went for its acquisition and made the required capital investment. The operative system was changed to increase the production. His own tested people took over the management. The increase in production level brought down the price of the product. Just one year hence after the take over the Mexican mill reached the profitable level.
In 1991 the plant was producing 5 lac tons and in Mittal’s charge it was producing 30 lac tons in 1998.
Laxmi Mittal brought this transformation by removing the basic faults and using efficiency based business policy which coordinated the relations between the management and the worker. The workers were now enthused and very hopeful. Investment risk was taken and new centres for distribution of the products were located and demand created. This success gave Laxmi Mittal a big player status and identity of a magic worker of steel industry who was infusing new life into loss making steel plants.
Acquisition in Kazakhstan
Kazakhstan steel complex was then USSR’s third largest steel works which employed 30,000 workers. There was additional work force of 25-30 thousand that worked in coal fields of the company. For social works the complex was bearing some non-productive expenses. The production work was not smooth due to the ills of the communist system. As a result the production level had fallen to a very low level. The workers and the officials had become sullen. The complex was incurring heavy losses. The industrial experts had declared that any private entrepreneur acquiring it would be committing financial suicide.
They did not appear far off the target but Laxmi Mittal had other idea, as usual a divergent view. He wanted to accept challenges and gain victories over them. Laxmi Mittal surprised everyone by acquiring that complex for $ 400 million at a time when the firm’s 300 Megawatt capacity electricity generating unit was producing only 90 Megawatts. Officials and workers were enjoying the lethargy and lax attitude of the communist system and due to obsolete technology the production level was very very low. Laxmi Mittal exuded confidence and in him inside there was a steeling determination to prove others wrong.
First of all Laxmi Mittal and his experts got down to analyse the cause of the low production. It did not take much time to identify the factors responsible for failures and low production. Laxmi Mittal himself studied the analysis of his experts. Those workers were marked who were creating problems in take over of the company’s management. They were gradually began to be isolated and distanced. Laxmi Mittal gave priority to the task of removing the ills and faults the steel plant had been infected with by the communist system. The major ills were mismanagement, irregular work, unproductive financial burdens and high cost of the steel produced.
Laxmi Mittal rallied his team of experts and managers and the message was put across to the workers that their future was tied to the fate of the steel complex. He promised if all people connected to the enterprise unitedly paid attention to the high quality and increased production efforts the plant shall start making profits and it would brighten up their future as well. As far as non-productive expenses were concerned Mittal directly linked them to the workers and officials welfare scheme. That created an atmosphere of mutual trust and hope.
Soon, the Mittal magic again worked. Under the care of Laxmi Mittal and as a part of the responsibility of entire group Kazakhstan steel complex began to turn into a gold mine. The spectacular success of Kazakhstan venture provided Laxmi Mittal a solid base from where he could launch new battles for bigger acquisitions. Infact the Kazakhstan steel complex take over was done by Laxmi Mittal with long term considerations of its strategic geographic location and the immense future possiblities. It revealed the farsightedness of the clever industrial player in steel.
Kazakhstan was the state bordering China and the latter was in a massive reconstruction and neo-construction process. Liberalisation had made way into China and that country was laying foundation and building infrastrcture to become an economic super power. The steel was in heavy demand in China. Being at its border meant low transportation expenses. It proved true. For its basic infrastructure development China needed steel in huge quantities.
These possibilities had made Laxmi Mittal take over the Kazakhstan steel complex and power plant. The new Chinese market trebled the financial assets of Laxmi Mittal’s ‘Steel International’. He had indeed become a steel king and his image had become so strong that other communist governments also began to get the idea that if anyone could revive their loss making or shut down steel mills it was the Indian magician Laxmi Niwas Mittal.
After Kazakhstan success Laxmi Mittal bought other closed down or sick mills of USSR, Romania Czechoslovakia, Poland and Bosnia.
Entry into Czech Republic
Czech Republic had set up Novahut Steel Complex with a capital investment of $ 275 million. But the production could never pick up steady output. It acquired by Laxmi Mittal in 2003. Even after the acquisition snags and glitches co ntinued to occur.
Then Mittal Group experts probed the entire machine works and processes and discovered the fault lay in twin ovens of plain furnace that took too much time in production. Laxmi Mittal introduced technical changes although it took a lot of investment. But it paid as with increased production the plant began to earn profits.
Laxmi Mittal’s efficient technical team also deserves praise. Many a time technical excellence works in place of financial infusion. In Algerian Annabas complex there was a blast furance and cinder plant based on French technology but steel smelter unit was Russian. It affected the production. Another factor was the civil war situation there which made it difficult for vendors to reach. Laxmi Mittal had acquired it in 2002 and French experts detected the faults and suggested the effective ways of correction. The measures increased the production and the plant became viable. It is now producing double the quantity of steel than before and earning profits.
Acquisition of American Inland
In USA Andrew Carnegie is known as the grandman of steel. He had set up the famous U.S. Steel. When Laxmi Mittal acquired Inland Steel of USA then the industry called him global age Carnegie. The mills of this new acquisition had annual production capacity of 50 lac tons. The corporation had its own iron are and coal mines. For aquisition L.N. Mittal invested $ 1.4 billion and entered the US. market. Here also Laxmi Niwas Mittal reduced the production cost and increased output. Thus, expanded the business of Inland Steel many times over in a matter of a few years.
‘Steel international’—A global giant
Laxmi Mittal acquired the sick government steel mills and transformed them into healthy and profit earning outfits. He made a niche in the huge markets of economic world powers like USA and China. His group ‘Steel International’ became a brand name for quality steel products. Through the acquisition of Inland Steel the group made its big presence felt in USA. In 2004 the group acquired international steel group of Ohio-Swifield and made it a part of ‘Steel International’. For this deal Mittal shelled out $ 4.5 billion. The acquired group had the annul output of 48 million metric tons which incerased to 70 million metric tons under Mittal. This addition greatly added to the power of Mittal Steel Empire.
The acquisition of ISG by Mittal group was the biggest news of the steel world of that year. It proved that Laxmi Mittal was a unique industrial talent and unstoppable in any take over race. The global industry grudgingly accepted LNM as a skillful enterpreneur, expert strategist and a very shrewd industrial business manager. But it was not the end of the story. He had yet to add several feathers in his steel crown.
Ukrain steel plant and east Europe
Three players—Proparobox Smart Group, Industrial Consortium and Mittal Group were in race for the acquisition of the Ukrain government steel plant. In June, 2004 the son-in law of ex-president of the country had aquired it earlier but due to political reasons the deal had been cancelled. In the second selling bid entire deal was put on live on the T.V. channels to maintain total transparency. In this transparent deal L.N. Mittal outbid his rivals and acquired the plant for $ 4.8 billion. Now Ukrain Steel plant was under Mittal flag. The greatest advantage of this plant was that it was close to an area that had one billion ton iron ore reserves which made the raw material supply assured. There also were rich coal mines and the port was only 390 kms away. The 80% of the production of the plant is exported. At present, this Ukrain plant of Mittal group is annually producing 7.7 million tonnes of liquid steel and additionally turns over carbon steel long as well.
Mittal’s policy of low cost-more production is working fine here also. This plant has given Laxmi Mittal big ascendency in Eastern Europe.
Charges and clarifications
Whenever a man emerges as a success it is a common practice to view him with suspicion and questions are raised about the means used for it in the light of legality, morality, ethics etc. Up come bands of detractors and fault finders. The professional jealous elements keep those detractors proding and encouraging. Scandals are fabricated and all efforts are made to pooh-pooh the success of the achiever. The people want to see the successful person fall down flat on his face. The people can’t digest the rise of someone because he has indirectly made them feel inferior. So he must pay for that sin or crime. The detractors are advocates of the devil called jealousy. Today the willing media becomes tool of the detractors because the former is a slave of TRP. Laxmi Mittal was bound to become the traget of TRP hounds, detractors hired by professional rivals and the public jealously. He was accused, charged and criticized but Laxmi Mittal kept moving on undetered propelled by new success and victories against heavy odds. The thunderous applause for his every new victory drowned the bleatings of jealous rivals. The main tool of Mittal success has been his incredibly efficient management skills and the precise planning. And behind all this is the team of professional geniuses he raised. What others failed to see was the team behind Laxmi Mittal. Given below are some of the charges against Mittal and explanations:
Charge : It appears that Laxmi Niwas acquired most of the steel campanies with the active cooperation by the respective governments, wasn’t it so?
Explanation : It is wrong to say that Mittal always enjoyed government patronage or their connivance as some would like to word it. Because of the licence-permit regimes of Indian government Laxmi Mittal preferred to base his industrial activities abroad. The foreign governments also did not provide him any special concessions or favour. The governments tried to squeeze Mittal as hard as they could. Infact by allowing the acquisition by Mittal they were getting rid of their headaches and take advantage of the business sense and management expertise of him. The nursed back mills became productive and envigorated the GDPs of those countries besides saving the jobs of their people. In Ukrain deal alone 65,000-70,000 jobs were saved and imagine the money going to the coffers of the governments through various taxes at various levels. Had Mittal been the one to easy up with officials and politicians he wouldn’t have gone abroad and stayed put like Dhirubhai Ambani.
Charge : He laid his hands on sick government mills at throw away price and on his own terms. The geograplical locations also favoured him. Isn’t that true?
Explanation : The closed mills or sick ones and the geographical locations were before other industrialists as well. Many of them even tried to acquire some mills. But it was Laxmi Mittal who successfully acquired them. Others lacked drive, conviction, self confidence, reliable assessment team and negotiating skills. Many of the acquisitions were such that market experts termed them as suicidal for anyone who committed the stupid act of buying them. Mittal trusted his own business sense and assessment of his own experts in acquiring them. He took a risk and struck gold. Laxmi Mittal did not cheat anyone or stole anything. Both sides of a deal bargain and the deal is done only when the too sides agree on all points. Consideration of geographic location was merely farsightedness of L.N. Mittal. Any other industrialist too could have preconceived it had he been circumvent and mentally alert.
Charge : All his success were built around the acquisitions. He did not show interest in setting up his own new plants.
Explanation : Laxmi Mittal had started his international industrial venture by founding a steel rolling mill in Indonesia. Then, he got a take over chance and revived a dying mill. In that exercise he found he had a special talent in acquisition and revival of sick or dead steel plants. That was the period when all over the world there were a large number of such plants waiting for a specialist doctor like Mittal to arrive and treat them to health. He did just that and found little time to set up new plants. Why should anyone be complaining about it? Others were not interested in that kind of risky business or they were not capable of it. It is easy to teach tricks to a new dog but only master trainers can teach old dogs.
from L.N. Mittal—Tony Blair
Charge : He gave 1.25 lac to the election fund of Tony Blair to gain British governmental favours.
Explanation : Mittal had contributed to the fund through a cheque and accounted for it. It was not a hush-hush deal. It is a common practice for industrialists and business men to donate money to the election fonds of the politcians.
Charge : Laxmi Mittal gave precious gifts to Wilber, Ross, the topman of International Steel Group (ISG) to soften him up to agree to the acquisiton by Mittal group.
Explanation : Giving gifts on the occasion of marriages or birthdays is a private affair which concerned their personal relationships. The acquisiton talks had been going on for quite some time and there was no relationship between negotiations and the gifts.
There is no proof to show that the gifts had played the decisive role in the sale of ISG to Mittal Group. The acquisition was the result of his determination, technical excellence and brilliant track record of revitalising date for the task and he needed not bribe anyone with gifts.
Charge : He showed competitive attitude against his brothers Promod and Vinod when they expanded their business to enter the international arena.
Explanation : Laxmi Mittals brother had arrived on the global scene as steel industrialists. Naturally it was the younger Mittals who had displayed competitive spirit against the elder brother who had promised not to do any steel business in India in competition against his brothers and had kept his word. It was a natural industrial rivalry abroad being in the same business. It couldn’t be avoided. The truth is that L.N. had at times extended financial support to his brothers for global steel ventures. In the present day situation, the global business can be done in competitive spirit and not with emotions.
Charge : He had declared that he was not interested in doing business in India but after earning limitless wealth he had turned his attention towards India to cash his international fame. In the process he had broken his promise of not competing against his brothers in India.
Explanation : He did make promise not to do steel business in India during the family settlement in competition against the younger brothers. But in it lied an implied meaning that international stage would be left clear for him. Promod and Vinod driven by ambitions went international to compete against their brother. As a natural reaction L.N. Mittal also returned to homeland industrially.
There are other important factors also. When L.N. had decided not be industrialy active in India the biggest reason was licenece-permit regime of the goverment of India. For a talented and ambitious entrepreneur it was heart breaking. The result of the liberalisation had yet to show up. Then, things changed fast and India became one of the fastest growing economies of the world. All the field and doors had opened up. As new economic power India too needs steel badly for infrastructure. It would look very odd if steel king of the world did not contribute to India’s growth with the kind of talent and financial resources he had raised. Infact it would be a very unpatriotic act. Besides other responsibilities a person has a great obligation to do something for his country. That responsibility is greater than what he own to his family. The brother Pramod and Vinod have not openly objected to his renewed interest in India.
If Laxmi Mittal does not take part in his own country’s progress then all his achievements at global stage would lose shine. Laxmi may live abroad but he can’t forget his own motherland. In doing business in India Laxmi Mittal is merely answering the call of his country. What is wrong with it?
