L. N. Mittal : The New inspiration for india inc., ushers in a new era in globalization

Prof. Arindam Chaudhuri
Hony. Dean, Centre For Economic Research and Advanced Studies, IIPM

[July, 2006]

June 15, 1950, in Rajasthan, within Sadulpur town, District Churu, is born the world's fourth richest individual. Of course, he's not the world's fourth richest when he is born; he's not even rich... In fact, he's penniless! And so is his joint family of 20, which thrives on poverty, and on a prayer and hope. June, 1969, in Calcutta, from the elite St. Xavier's College, passes out one of the world's most perseverant & passionate Indians. And his family is penniless no more... In fact, they've started a small-scale scrap dealing outfit in Calcutta, which he expands subsequently with an overseas investment in a small steel mill in Indonesia. June, 1994, sees the passionate individual breaking away from his family in pursuit of transforming his business into the world's largest steel manufacturer. But it takes him more than a decade of buying dysfunctional plants across the globe at low costs, and integrating them into an astoundingly synergistic value chain. The world, of course, has no idea about the coming storm, but surprisingly, elitist Indians, and even the so-called high ground elitist steel manufacturers of India refuse to give recognition & respect to his efforts. June, 2006, in Luxembourg, acquiring Arcelor Steel, is born again the world's fourth richest, and one of the most perseverant & passionate Indians, and of course, the world's largest steel manufacturer... In fact, he's much more than that; he's a leader bent on defeating ridiculously xenophobic western world perspectives of demeaning third world ambitions. Welcome to the new corporate world order, re-written by Lakshmi Narayan (nee Niwas) Mittal.

The West blamed him of producing poor quality steel, and described his company as an “Indian” company. As a matter of fact, during the Arcelor deal negotiations, Mittal was regularly meted out second class treatment, and slapped with racist comments; ranging from his being accused of having “a grammar problem” (by the French Finance Minister, Theirry Breton), trying to purchase Arcelor using legacy Indian “monkey money” from his “family business specialising in buying obsolete installations” (by Guy Dolle, CEO Arcelor), to being ridiculed by the Luxembourg Prime Minister, Jean-Claude Juncker, who thundered, “This hostile bid calls for a reaction that is as hostile,” and to being castigated as being visionless in the French Parliament by their Industry Minister, Francois Loos, “We are opposed to the success of Mittal's public offer for Arcelor...,” as Arcelor is a “flower of the European economy.” Guy Dolle went one step ahead, and berated Mittal's steel as being cheap “eau de cologne,” as compared to Arcelor's steel being “perfume,” and also publicly foul-mouthed L. N. Mittal's son Aditya, who's on the board of Mittal Steel! (It obviously must be hard for the West to accept the idea of L. N. Mittal holding 86% shares of Mittal Steel, as well as his owning a proud $128 million house in Kensington Palace Gardens and throwing a $55 million wedding bash for his daughter at the Palace of Versailles with Kylie Minogue performing in the wedding. We realise it all must be too much of a cocktail for the western world to accept, especially from a “bad grammared” Indian).

For Mittal, the Arcelor deal is not just a personal triumph, but it also tells the beginning of new realities in the world of globalisation, where Indian & Chinese companies are rampantly entering into overseas M&A deals, introducing new cultures in acquired firms, and in fact, retrenching legacy “white” employees en masse. The western world had no problems earlier when US firms were taking over European companies, and vice versa. But now, their racist malevolence is clearly evident in the refusal to China National Oil Co. by US government to take over Unocal, a US petro-major; in the racist hysteria that arose when Haier (of China) unsuccessfully bid for Maytag (a leading American appliance firm), or even when Dubai Ports of UAE was ridiculed by US Congressmen for trying to take over six US ports. The fact is that the West has to get used to the new reality of Chinese & Indian companies taking over their organisations. While in 2005, India Inc. invested $4.3 billion in 136 M&A deals overseas, the figure for this year till June 8, 2006, is already a whopping $6 billion for just 50 M&A deals. And guess which continent accounted for over half the deals? Europe! The xenophobic world has tried, and hard, to ignore us... They can't now... not anymore as long as Indians get inspired by the fighting spirit of global corporate leaders like L. N. Mittal !

Our previous column on “STUDENTS AGAINST CORRUPTION & KICKBACKS : SACK, A Movement That Can  Further The Cause Of Youth For Equality” received tremendous feedback from the readers. Every month, India: Today & Tomorrow reaches around 125 lac urban house holds, with approximately 750 lac readership, perhaps the highest ever in the world! You can log on to www.iipm.edu/itt.html to read our previous articles. Your feedback is important. Send your feedback at: feedback@iipm.edu or to Prof. Arindam Chaudhuri, IIPM Tower, B-27, Qutab Institutional Area, New Delhi - 110 016. The views expressed above are solely of the author. IIPM does not necessarily share the same opinion.