Interview with Lakshmi Mittal
The Financial Express
27.01.2005
Davos, Switzerland, Mittal Steel, soon to be the world's biggest steel producer, expects a stable market for the metal in 2005 and is looking at further acquisitions, its chairman and CEO said on Thursday.
Lakshmi Mittal confirmed he was interested in buying a stake in Turkey's Eregli Demir Celik (Erdemir), which the government plans to sell this year.
His group -- which has emerged as a leading consolidator in the steel industry -- was also looking at assets being privatised in Poland and the Czech Republic, Mittal told Reuters on the fringes of the World Economic Forum in Davos.
Steel prices have as much as doubled in the past year on booming demand, particularly from China, leading to some fears of a correction.
But Mittal said he expected a good balance between supply and demand to continue in 2005, with the Chinese curbing excessive investment in the sector.
"I see a stable environment, unless there is some big terrorist issue or other catastrophe," he told Reuters on the fringes on the World Economic Forum in Davos.
"I see 2005 as a stable year for steel production. There's been a good balance in the supply and demand ... There is no hard landing in China. Last year they took an active decision to reduce investment in the steel industry and slow down new investments."
EMPIRE BUILDING
Indian-born Mittal has built his empire by picking up underperforming assets around the world.
In 2004 he merged his LNM Holdings and Ispat International NV and agreed to buy International Steel Group Inc of the United States. When that deal is completed in the first quarter of this year, Mittal Steel will outstrip current global leader Arcelor in terms of output.
Mittal said he expected futher consolidation in the steel sector, with his company playing a leading role.
Earlier this month Mittal gained a foothold in the Chinese market through the $314 million purchase of a stake in China's eighth largest player, Hunan Valin Steel Tube & Wire Co. Ltd.
The acquisition was the first sizeable investment by a non-Chinese steelmaker in an established Chinese steel company.
Looking ahead, Mittal is eyeing Turkey and eastern Europe.
"We have expressed interest in Erdemir in Turkey, and in Poland and Czech Republic," he said.
Other companies reported to be chasing the Erdemir stake include Arcelor and two Russian steelmakers Novolipetsk and Severstal.
The Turkish government has appointed a group of advisers to look into the sale of the state's 46.12 per cent stake in Erdemir, the country's biggest steelmaker. The sale is part of a privatisation backed by the International Monetary Fund.
REUTERS
