About the division of Mittal family it is said it was not division of business assests but geographical division. L.N. Mittal decided to operate abroad while his younger brothers were left to carry on the inland business. But Promod Mittal broke this tacit agreement and went global. Then L.N. just said, in the business world the business is all important and there is nothing personal.
On his return to India is 2000 he emotinally said, ‘I left Sadulpur at an early age. At the age of 26 set up a mill in Indonesia and as 45 year old established myself in global steel business. Who does not love his motherland? I wanted to return and in not doing so there was no family condition or restriction. The cumbersome and restrictive industrial policies of the government kept me away. Then there were only two options before an entrepreneur—either to appear politicians and officers to circumvent rules or swim against the tide and waste energies in completing meaningless formalities.
It was true. Had he been in India he would not have achieved even 1% of what he recorded abroad. There was no incentive for an industrialist in the licence-permit oriented regimes. He listened to the call of his over ambitious mind to make foreign lands his operational base. In India he would have spent half of his life running from pillar to post in the government secreatriates and singing prayers of politicians. And abroad, in that very period he had already become global king of steel. But the scene had changed. The good tidings for the industry began when then finance minister, Dr. Manmohan Singh introduced the liberalisation of policies in 1991. By 2000 the results were showing. The economic growth had shot up to the impressive figure of 9%. After China the Indian economy had become the fastest growing economy of the world.
In automobile sector the change was revolutionary. A look at the state of other industries told Laxmi Mittal that India was indeed on way to become an economic super power. India had large reserves of iron ore to feed the steel industry. Jharkhand and Orissa had massive reserves of coal, iron ore and other minerals. For the same reason Laxmi Mittal chose those two states to start his operations at priority bases. About the issue of acquisition Laxmi Mittal said in reply to a query—’Our country as the biggest democracy of the world and here people and political parties opposed any attempt to privatise the public sector industry. It is very difficult to acquire public sector undertakings here. Only option is to set up new plants. If acquisitions opportunities open up Steel Authority of India becomes the first choice.’
Greenfield Project-Jharkhand
In the case of India its growth rate, massive youth population, richness of natural resources can attract any industrialist. In period of the liberalisation the flexible policies of the government has added a new impetus to industrial development. The population is mammoth and per capita income is rising. Relatively cheap labour and resources makes it possible to keep the end price of the product down.
There has been qualitative and quantitative improvement in the infrastructures like roads, power, health. The land is also cheap relatively. These things inspired Laxmi Mittal to set up industries in India.
In this connection he met the central minister, Ramvilas Paswan and then Jharkhand C.M. Arjun Munda several times. On October 8, 2005 Laxmi Mittal signed on MoU with Jharkhand government to open the way for setting up a steel plant. The proposed plant will have annual capacity of 12 million tonnes production with an investment of about Rs. 40,000 crores. It was also decided to take up the projects of development of iron ore mines and power plants.
To address the social concerns Laxmi Mittal has promised to found a Mittal Township. For Technological advancement Mittal agreed to set up an ultramodern technical institute. Jharkhand government on its part promised to provide basic facilities and raw material. His projects would generate employment, revenues, services, educational facilities and general human resources development. It will put this tribal majority state on the path of progress.
Collaboration with ONGC
Mittal Group is investing capital in sectors other than steel as well. The energy has been their choice sector. In Jharkhand Mittals have collaborated with ONGC (Oil and Natural Gas Corporation) to enter the field. The two groups have formed two companies, ONGE-Mittal Energy and ONGE-Mittal Energy Services.
In the companies ONGC holds 49.88% share and Mittal steel had 48.02% The rest of the 2% have been bought by State Bank of India. In the share division the government played no role and neither shall it interfere in future. Laxmi Mittal has clarified in the very beginning—”Mittal Steel is active in many countries where there are oil reserves. The governments of those countries want us to handle their oil business. One of the aims of Mittal Steel and ONGC would be to ensure the availability of energy to Indian needs.”
To prospect for the energy resources the new company has started participating in bidding abroad. From Nigerian government the company has got oil mining licence. In this mining project basic structure $ 6 billion would be invested and the company will set up oil refinery having 1.80 lac barrel per day capacity. The refined oil will be exported. A power plant based on coal and gas proposed by the company has been sanctioned. To address the social concerns these joints companies shall develop Petro Training Institute and human resources development and worker welfare schemes will also be undertaken.
Increasing demand for oil and arrogant attitude of the OPEC (Oil producing countires) has made search for new energy resources a necessity. India imports 70% of its energy needs which takes away a big slice of its exports earnings. In Nigeria ONGC—Mittal joint venture hopes to mine 6,50,000 barrels of oil each day. The government has given permission to the company to export 1.2 lac barrels of crude oil a day. This joint venture is prospecting in 22 other countries amongst which are USA, China, Canada, England, Bosnia,
S. Africa, Poland, France, Germany and Romania where Mittal Steel has strong presence. So, there is great possibilities of Hydrocarbon business for the company.
Social concerns
L.N. Mittal has been conscious about his social duties and corcens. In this respect he had a great administration for Bill Gates who had turned into an global philanthropist. Mittal appreciates his humanitarian views. Inspired by Bill Gates Mittal too is seriously engaged in adderssing his social responsibilities by undertaking human welfare works.
With cooperation of Rajasthan government L.N. Mittal has set up ‘Institute of Informotion Technology’ in a rural area called Rupa ke Nagal. His social welfare works are overseen by L.N. Mittal Foundation. A township is also coming up. A big hostel is also being constructed with modern facilities and sports arenas. The foundation is in the care of able hands and its members are all well known persons.
L.N. and Usha Mittal Foundation
This organisation is active in the fields of education, social rehabilitation and economic development. The foundation has set up ‘Usha Mittal Institute of Technology’ in Mumbai and Business Education Institute in Hyderabad that specially cater to the needs of education of girls. The girl are being trained in technology and business management. In Rajasthan the foundation is doing following works:
❑ Contribution to women’s empowerment.
❑ Monetary help to economically weak students of merit. Helping handicapped children through financial and educational aid.
❑ Arranging water for famine affected rural areas of Rajasthan and providing fodder for their cattle.
❑ Providing information to farmers on agriculture improved seeds and fertilizers.
The foundation comes forward with needed help whenever some natural calamity strikes. It set up a hospital during Gujarat earthquake. Aid was provided for rehabilitaion when Tsunami hit coastal rigions in S. India.
Mittal championship trust
The trust gives financial incentives to Indian sports persons and creates basic sports infrastructure and facilities. It has the benefit of the special attention of Amit Bhatia the son-in-law of L.N. and Usha Mittal. New sporting talents are being nursed in view of the 2012 olympics. The advisory body of the trust has some well known names like Bobby George, Pulela Gopichand, Narayan Kartikeyan, Mahesh Bhupati etc.
Special attention is being paid to swimming, boxing and archery. L.N. and Amit have been sports lovers and they hope their efforts may help India win some medals in 2012 olympics to be held in London, the home town of Mittals.
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