Mittal’s Rs 40K cr plant for Orissa
THIRTY YEARS ago when Lakshmi Mittal set out from Kolkata to acquire a 65,000-tonne steel plant in Indonesia, he requested Biju Patnaik, the then Orissa chief minister, to inaugurate it.
The Kalinga Bull had close ties to Indonesia (it was Biju Patnaik who named Sukarno's daughter, Sukarnoputri). As things turned out, the steel plant went on to make huge profits and the acquisition was to become a hallmark of Mittal's later business strategy: acquire loss-making, often state-owned plants, inject them with cutting-edge technology and management skills, and put them in the black.
Back in India, flush with his successful bid for Arcelor, it seemed fitting that Mittal would return to Orissa, to Biju Patnaik's youngest son Naveen who is the present chief minister, and return the favour. At a press conference, the steel titan announced plans to set up a Rs 40,000 crore, 12-million-tonne steel plant to come up in two phases in Orissa.
When Naveen Patnaik said he could not fly to Delhi to meet the potential investor, Mittal flew to Bhubaneswar from London, cancelling prior appointments in Kazakhstan.
Ironically, Biju Patnaik had tried - unsuccessfully -- to convince another London-based NRI, Swaraj Paul, to invest in his state. Mittal's Rs 40,000-crore investment plans could be for Naveen Patnaik the fulfilment of his father's dream. Sources close to the chief minister say he is serious about making Orissa an investment hub in the country. For Mittal, too, Orissa is a serious opportunity. He has built his empire on acquisitions; this will be his first greenfield venture.
Orissa's gain could also be Jharkhand's loss. Mittal was candid about his disappointment at the slow place of allotment of land and mines in Jharkhand. But he denied that he was pulling out of the state. "The position in Jharkhand is not as satisfactory as we would like it to be," he said. "It'll be difficult to say we're pulling out of Jharkhand. We're keeping both our options open."
On a thanksgiving mission to India for its support during the Arcelor takeover, Mittal said the success of ONGC-Mittal Energy in Nigeria should be explored with other public-sector enterprises. "We're ready to work with the Steel Authority of India Limited if the opportunity arises," he said.
He denied plans for a hostile takeover of TISCO. "Don't expect to see fireworks in the near future," said his son Aditya who is the chief financial officer of Mittal Steel.
On Arcelor, Mittal said the merger of Mittal Steel and Arcelor would put the company five-seven years ahead of the competition. He allayed fears that investments in India could result in job losses in the West. "Our expansion in India will not have any repercussions on employment elsewhere," he said. "We're investing here to be partners in growth."
Meanwhile, the ONGC-Mital Energy Ltd (OMEL) combine is considering investing over $6 billion in setting up a refinery, a power plant and railway lines in Nigeria.
The investments are part of a mega deal between OMEL and the Nigerian government, wherein the joint-venture company will create the infrastructure and the African company will give it oil blocks.
And is he on the way to becoming the next Warren Buffett or Bill Gates in philanthropy? "I'm still very young. I've still a few years work to do before I can consider it," he said. But if Orissa is any indication, Mittal has a way of never forgetting.