ArcelorMittal Fact Book 2006

Transcription

ArcelorMittal
19, Avenue de la Liberté
L-2930 Luxembourg
Berkeley Square House
Berkeley Square
London W1J 6DA
www.arcelormittal.com
02 At a glance
04 Company Profile
08 Highlights
10 Market and Industry
12 Key Figures
13 Steel Consumption and Markets
15 Steel Production by Process
16 Apparent Consumption of
Finished Steel
18 Crude Steel Production
20 Selected Steel Import/Export
22 Steel Prices
28 Steel Producers and Industry
30 Operations
32 Group Structure
34 Key Operating Subsidiaries
36 Strong Track Record of
Successful Integration
38 2006 Monthly Highlights
40 Board of Directors
44 The Group Management Board
46 Management Committee
50 Corporate Governance –
Board Practices
54 Technology and Innovation
56 Integration Review
60 Environment
62 Communities – ArcelorMittal
Foundation
64 Corporate Social Responsibility
66 Shipment Breakdown
68 Production Breakdown
69 Mining Operations
70 Iron Ore Production Facilities
71 Raw Material Self Sufficiency
72 Number of Employees
73 Key Financial
and Operational Information
74 Main Industrial Assets
76 Flat Carbon Americas
78 Flat Carbon Europe
80 Long Carbon Americas
81 Long Carbon Europe
84 AACIS
86 Stainless
88 Production Facilities
90 USA, Burns Harbour
91 USA, Sparrows Point
92 USA, Cleveland
93 USA, Indiana Harbour
East and West
94 Canada, Dofasco / Hamilton
95 Mexico, Lázaro Cárdenas
96 Brazil, CST and Vega do Sul
97 Czech Republic, Ostrava
98 Romania, Galati
99 Poland, Krakow
100 Poland, Dabrowa
101 Spain, Gijón and Avilés
102 France, FOS
103 France, Dunkerque,
Mardyck and Montataire
104 France, Florange,
Mouzon and Dudelange
105 Germany, Bremen
106 Germany, Ekostahl,
Eisenhüttenstadt
107 South Africa, Vanderbijlpark
108 Kazakhstan, Temirtau
109 Ukraine, Kryviy Rih
110 Financials
112 Consolidated Statements
of Income and Cash Flows
113 Consolidated Balance Sheet
114 Share Price and Shareholding
116 Steel Sector and
Stock Market Performance
118 Share Information
122 Equity Analyst Coverage
124 Glossary and Safe
Harbour Statement
126 Glossary
128 Safe Harbour Statement
The financial information in the ArcelorMittal Fact Book 2006
has been prepared in accordance with International Financial Reporting Standards
as adopted by the European Union. This financial information does not contain
complete information related to the statutory account of Mittal Steel Company
N.V. A copy of the Dutch statutory accounts can be obtained free of charge
by contacting the registered office of Mittal Steel Company N.V., Hofplein 20,
15th floor, 3032 AC Rotterdam, The Netherlands, or by contacting the
ABN AMRO Service Desk at +31 (0)76 579 9455.
ArcelorMittal Fact Book 2006 01
ArcelorMittal is the number one steel
company in the world, with 320,000
employees in more than 60 countries.
Created from the merger between Arcelor
and Mittal Steel, the Group is the leader
in all major global customer segments,
including automotive, construction,
household appliances and packaging.
02 ArcelorMittal Fact Book 2006 – At a glance
At a glance
2006 has been a groundbreaking year for the steel industry.
It saw the creation of ArcelorMittal, the world’s first 100
million tonnes plus steel company in a merger which highlighted
the benefits of a more consolidated steel industry.
100
At a glance – ArcelorMittal Fact Book 2006 03
Company Profile
ArcelorMittal is the largest steel producer in the Americas,
Africa, and Europe, and it has a growing presence in Asia.
ArcelorMittal has steelmaking operations in 27 countries
on four continents, including 64 integrated, mini-mill
and integrated mini-mill steelmaking facilities. As of December 31,
2006, ArcelorMittal had approximately 320,000 employees.
ArcelorMittal’s steelmaking
operations have a high
degree of geographic
diversification. Approximately
35% of its steel is produced
in the Americas, approximately
48% is produced in Europe
and approximately 17% is
produced in other countries,
such as Kazakhstan, Algeria
and South Africa.
ArcelorMittal produces a broad range of
high-quality finished and semi-finished
carbon steel products. Specifically,
ArcelorMittal produces flat products,
including sheet and plate, long products,
including bars, rods and structural
shapes, and stainless steel products.
ArcelorMittal sells its products primarily in
local markets and through its centralized
marketing organisation to a diverse range of
customers in approximately 187 countries,
including the automotive, appliance,
engineering, construction and machinery
industries.
ArcelorMittal operates its business in six
reportable operating segments: Flat Carbon
Americas; Flat Carbon Europe; Long Carbon
Americas and Europe; Asia, Africa and CIS;
Stainless Steel; and ArcelorMittal Solutions
and Services (trading and distribution).
ArcelorMittal’s steelmaking operations have
a high degree of geographic diversification.
Approximately 35% of its steel is produced
in the Americas, approximately 48% is
produced in Europe and approximately
17% is produced in other countries, such
as Kazakhstan, Algeria and South Africa. In
addition, ArcelorMittal’s sales are balanced
both geographically and between developed
and developing markets, which have
different characteristics.
ArcelorMittal has access to high-quality and
low-cost raw materials through its captive
sources and long-term contracts. In 2006,
on a pro forma basis after giving effect
to the acquisition of Arcelor (assuming
full production of iron ore at Dofasco
for captive use), approximately 45% of
ArcelorMittal’s requirements of iron ore and
approximately 9% of its coal requirements
were supplied from its own mines or
from long-term contracts at many of its
operating units. ArcelorMittal is actively
developing its raw material self-sufficiency,
including through recent initiatives to gain
or expand access to iron ore sources in
Liberia, Ukraine and Senegal. In addition,
ArcelorMittal is the world’s largest producer
of direct reduced iron, or DRI, which is
a scrap substitute used in the mini-mill
steelmaking process, with total production
on a pro forma basis of approximately 9.3
million tonnes in 2006. ArcelorMittal’s
DRI production satisfies all of its mini-mill
input requirements. ArcelorMittal is one of
the world’s largest producers of coke, a
critical raw material derived from coal, and
it satisfies approximately 76% of its coke
needs. ArcelorMittal’s facilities have good
access to shipping facilities, including its
eleven deep-water port facilities and its
railway sidings.
ArcelorMittal’s pro forma net income for the
twelve months ended December 31, 2006,
after giving full-year effect to its acquisition
of Arcelor, was $8.0 billion, or $5.76
per share, as compared with pro forma
net income of $8.3 billion, or $5.97 per
share, for the year ended December 31,
2005. ArcelorMittal’s net income for the
year ended December 31, 2006 was $6.1
billion, or $5.29 per share, as compared
with net income of $3.8 billion, or $4.80
per share, for the year ended December
31, 2005. As of December 31, 2006,
ArcelorMittal had shareholders’ equity of
$50.2 billion, total debt of $26.6 billion
and cash and cash equivalents, including
restricted cash, of $6.1 billion.
Competitive Strengths
We believe that the following factors
contribute to our success in the global steel
industry:
Scale and scope of operations
ArcelorMittal is the world’s largest steel
producer. We have an annual production
capacity of approximately 138 million
tonnes of crude steel for the year ended
December 31, 2006, and in 2006 we
shipped approximately 110.5 million tonnes
of steel on a pro forma basis. We are the
largest producer of steel in the Americas,
Africa and Europe, and we have a growing
presence in Asia. In 2006, we significantly
increased our size by acquiring Arcelor,
which was the world’s second-largest steel
producer by production volume at that
time. We have operations in each country
party to the North American Free Trade
Agreement, or NAFTA, and in many member
states of the European Union, which
facilitates the free trade of goods between
such countries. In addition, certain of our
operating units have access to markets
experiencing above average growth in steel
consumption. The combination of our
local, regional and international distribution
provides us with a global manufacturing and
marketing presence, and we use our scale
and global presence to achieve significant
cost savings and operational efficiencies in
production, procurement and marketing.
Integrated business model focused
on low-cost production.
We believe that our access to relatively
low-cost raw materials, efficient use of
steelmaking facilities, global procurement
strategy and implementation of overall
company-wide knowledge management
practices make us one of the lowest cost
steel producers in each of the regions in
which we operate. Many of our operating
units are strategically well located to
access low-cost raw materials, such as
iron ore in Kazakhstan, Mexico, Brazil and
Ukraine, and natural gas in Trinidad and
Tobago. Our operations also have strong
vertical integration as a result of our
captive sources of raw materials, such as
iron ore, coal and coke, and our access
to owned infrastructure, such as deepwater port facilities and railway sidings.
We believe that our degree of raw material
integration provides us with a competitive
advantage through our ability to better
monitor the quality of our raw materials and
through reduced exposure to the volatility
of raw material spot market prices. Our
downstream integration through AM3S
enables us to service our markets and
customers more directly. In addition, we
seek to maximize operational efficiencies by
implementing strict cost management and
targeting capital investments to achieve
lower costs of production at each of our
facilities. As a result, we believe that we are
well positioned to manage the cyclicality of
the steel industry.
Diverse product portfolio and strong
customer relationships
We produce a diversified portfolio of
products to meet a wide range of
customer needs across all steel consuming
industries, including the automotive,
appliance, engineering, construction and
machinery industries. We sell our products
in local markets and through our centralized
marketing organisation to customers in
approximately 187 countries. We believe
that our diversified product offering
enables us to build strong relationships
with our customers, which include many
of the world’s major automobile and
appliance manufacturers. Our research and
development facilities in North America and
Europe help to strengthen our relationship
with our customers as we work with them
to meet their evolving product needs.
Proven expertise in steel acquisitions
and turnarounds.
Our senior management team has
proven expertise in successfully acquiring
and integrating operations and turning
around underperforming assets within
tight timeframes. We utilize a disciplined
approach to investing and have teams
from different business units across our
company responsible for evaluating any
new asset, conducting due diligence and
monitoring integration and post-acquisition
performance. Since our inception in
1989, we have grown through a series of
acquisitions and by improving the operating
performance and financial management
at the facilities that we have acquired. In
particular, we seek to improve acquired
businesses by eliminating operational
bottlenecks, addressing any historical
under-investments and increasing acquired
facilities’ capability to produce higher
quality steel. We introduce focused capital
expenditure programs, implement companywide best practices, balance working
capital, ensure adequate management
resources and introduce safety and
environmental improvements at acquired
facilities. We believe that these operating
and financial measures have reduced
conversion costs of production, increased
productivity and improved the quality of
steel produced at these facilities.
Company Profile
ArcelorMittal’s success has been built on a consistent strategy
that emphasises size and scale, vertical integration, product
diversity, continuous growth in higher value products and a strong
customer focus. We intend to continue to play a leading role
in the consolidation of the global steel industry and to be the
global leader in the steel industry.
Business improvement through
company-wide knowledge management
program.
Knowledge sharing and implementing
best practices is an integral part of our
management philosophy. Through our
global Knowledge Management Program
(“KMP”), we share, develop and utilize
our knowledge and experience across our
facilities to accelerate improvement in
business performance. The KMP covers all
key functional areas, such as procurement,
marketing and health and safety, as well
as the main steps in steel production and
processing. The KMP includes ongoing
detailed benchmarking, regular technical
meetings and information-sharing at the
corporate, regional and operating levels
and inter-plant expert and operational
support to drive performance improvement.
The KMP enables each business unit to
benefit from the scale and reach of our
global presence and to have access to the
best practices and experience within our
company. We believe that the KMP provides
a differentiating advantage to our business
performance by continuously contributing to
reduced procurement and conversion costs
and enhanced productivity and profitability.
Research and Development.
Our research and development facilities
in Europe and North America help to
strengthen our relationship with our
customers as we work with them to
meet their evolving product needs and
developing new steel solutions. Our
research and development centers support
our business units in process improvement
and innovation to produce the best quality
steel at the lowest cost and environmental
impact. ArcelorMittal’s expanded size has
helped it to increase and strengthen the
number of research partnerships in which
it is involved with world-class scientific and
technical universities. Common research
work on projects dealing with automotive
steel and manufacturing processes through
the Global Strategic Alliance with Nippon
Steel has continued.
Strong financial profile.
We believe that our strong financial position
and cash flow generation, as illustrated
by our corporate investment grade credit
ratings, enable us to take advantage of
acquisition and investment opportunities.
We currently have corporate investment
grade credit ratings of “BBB” from Standard
& Poor’s, a division of The McGraw-Hill
Companies, Inc., and from Fitch Ratings,
and a senior implied rating of “Baa3”
from Moody’s Investors Service Ltd.
As of December 31, 2006, we had
cash and cash equivalents (including
short-term investments and restricted
cash) of $6.1 billion and total debt
of $26.6 billion. In addition, including
our operating subsidiaries, we had
available borrowing capacity of $9.0 billion
at December 31, 2006.
a supplier’s ability to deliver worldwide the
same products of consistent quality. We
will continue to invest in our assets and
capabilities in emerging economies in order
to meet the needs of these markets. In
regions where we have a relatively limited
presence (such as China and India), we
will look at acquisition opportunities or
greenfield possibilities to complete our
global footprint.
Experienced management team led by our
founder, Mr. Lakshmi N. Mittal.
Worldwide steel demand is driven by growth
in developing economies, namely BRICET
countries. Our acquisition strategy over
recent years has given us a leading position
in Africa, Central and Eastern Europe,
South America and Central Asia to benefit
from this growth. We are also building our
presence in China and India. As these
economies develop, local customers
will require increasingly advanced steel
products as market needs change. We will
continue to transfer capability for higher
quality products from our operations in
developed markets to our operations in
developing markets to enable us to grow
with these changing needs.
ArcelorMittal is led by Mr. Lakshmi N.
Mittal, Chairman of the Board of Directors
and Chief Executive Officer and founder of
the ArcelorMittal, who is supported by a
strong and experienced central and local
management team.
Business Strategy
ArcelorMittal’s success has been built on
a consistent strategy that emphasizes size
and scale, vertical integration, product
diversity, continuous growth in higher value
products and a strong customer focus. We
intend to continue to play a leading role
in the consolidation of the global steel
industry and to be the global leader in the
steel industry. Key elements of our strategy
are to:
Consolidate our leadership position
in high quality products into a global
customer platform.
We have established a reputation for
producing high quality steel products for the
most demanding applications. We intend to
continue to partner with our key customers
in research and development activities and
in assisting them in their product design
initiatives to ensure that we remain a
supplier of preference for them.
Customers for high quality steel products,
which today are primarily based in mature
economies, are becoming increasingly
global and expanding their capacities in
developing countries to serve rising local
demand. These globalizing customers value
Utilize our existing geographic
diversification and strong position in high
quality products in mature economies to
capture future growth in Brazil, Russia,
India, China, Eastern Europe and Turkey
(“BRICET”) countries.
Maintain a high degree of product
diversification.
A global steel producer must be able to
meet the needs of different markets. Steel
consumption and product requirements
clearly differ between mature economy
markets and developing economy markets.
Steel consumption in mature economies is
weighted towards flat products and a higher
value-added mix, while developing markets
utilize a higher proportion of long products
and commodity grades. To meet these
diverse needs, we plan to maintain a high
degree of product diversification. We also
plan to seek opportunities to increase the
proportion of our product mix consisting of
higher value-added products.
Maintaining strong, long-term customer
relationships.
ArcelorMittal intends to continue to focus
on the development and maintenance of
long-term relationships with its customers.
ArcelorMittal has entered into long-term
framework agreements with key customers,
in particular in the flat steel segment. For
example, we provide just-in-time inventory
management for our leading U.S. and
European, based automotive industry
clients.
With more than 25% of the worldwide
market share of flat steel sheets for the
automotive industry, ArcelorMittal is a
strategic partner for the major original
equipment manufacturers (“OEMs”) and
develops a capability to build long-term
relationships with them based on longterm contracts, early vendor involvement,
contributions to global OEM platforms and
common value-creation programs.
The global industrial footprint of
ArcelorMittal, combined with a capability
to deploy the same standards on different
continents, allows ArcelorMittal to assist
the major OEMs in their international
developments.
Achieve cost leadership and operational
excellence across the product range.
Cost leadership is essential in the steel
industry. To maintain this, we intend to
utilize our scale and global presence to
achieve greater production efficiencies,
operational synergies and cost savings
across our business. Specifically, we plan
to:
• Develop and maintain a cost-competitive
supply base. Our size and geographic
scope give us access to local, regional
and global suppliers and enable us to
continue to develop and secure high
quality and cost competitive supplies.
We plan to pursue these opportunities by
adopting global and regional commercial
procurement strategies and by executing
these strategies on either a local or
centralized basis as appropriate.
• Maximize the operational efficiency
and effectiveness of our plants. We
plan to continue to invest in technology
and process development in order to
lower production costs and improve
performance. We utilize and adapt a
wide range of steelmaking technologies,
depending upon local conditions, for raw
material and energy supplies. In addition,
we seek to protect and enhance
our competitiveness through our
knowledge management and continuous
improvement programs and by looking
for opportunities for facility optimisation
and specialisation on a product basis.
• Practice capital management discipline.
The steel industry is capital intensive.
Therefore, we promote capital
management discipline to improve our
capital efficiency. We plan to continue to
focus our capital expenditure programs
on eliminating production bottlenecks
and improving product capabilities to
meet the requirements for higher valueadded products. Where appropriate, we
utilize our in-house design, engineering
and fabrication capabilities to reduce the
capital cost of projects.
• Continue to invest in low-cost semifinished capacity. We have some of
the most cost-competitive steelmaking
operations in the world at its facilities
in South Africa, Brazil, Ukraine and
Kazakhstan. We intend to increase
capacity at these facilities, which can
advantageously supply slabs and other
semi-finished products to downstream
facilities in North America and Europe.
require. As we grow, the investment in
our research and development activities
becomes leveraged over a larger asset
base. This should allow further investment
in order to accelerate innovation. As part of
our research and development strategy, we
intend to continue to promote and develop
our relationships with public research
institutes and universities.
Maintain a high level of vertical integration
to hedge against price fluctuations of raw
materials.
We intend to build the world’s most
admired steel institution with leading
management, social, human resources
and corporate sustainability policies. In
doing so, we plan to attract, develop and
retain the best possible management
talent. We intend to maintain an open and
performance-oriented culture designed to
encourage managers at all levels to act like
entrepreneurs, to assume accountability,
to make decisions in the best interest of
ArcelorMittal and to support one another in
all efforts to improve continuously.
Upstream integration allows steel
companies to hedge against supply-side
constraints and price fluctuations for key
raw materials. We intend to increase
selectively our access to and ownership of
low-cost raw material supplies, particularly
in locations adjacent to or accessible from
our steel plant operations.
Enhance our research and development
leadership to drive innovation and growth.
We intend to continue to invest in our
research and development capabilities to
ensure we can develop and deliver the
high-end products that our key customers
Own and manage distribution channels
in key geographic regions.
Downstream integration is a key element
of our strategy to build a global customer
franchise. In high-value products,
downstream integration allows steel
companies to be closer to the customer
and capture a greater share of valueadded activities. As our key customers
globalize, we intend to invest in valueadded downstream operations, such as
steel service centers and downstream
operations, such as our building and
construction support unit services serving
the construction industry. In addition,
we intend to continue to develop our
distribution network in selected geographic
regions. These downstream and distribution
activities should allow us to benefit from
better market intelligence and better
manage inventories in the supply chain to
reduce volatility and improve working capital
management.
Build a world-class organisation to
implement the strategy.
Highlights
Highlights
ArcelorMittal pro forma figures (unaudited)
88,576 (+10.5%)
2006
2005
Sales
(million US$)
80,171
110.5 (+7.4%)
2006
2005
Shipments
(million tonnes)
102.9
15,272 (+2.1%)
2006
EBITDA
(million US$)
14,959
2005
2006
11,824 (+1.5%)
2005
11,648
2006
5.76 (-3.7%)
2005
Operating income
(million US$)
Basic Earnings per share
(US$ per share)
5.97
Sources : ArcelorMittal.
Shipments 2006
1. Asia and Africa 2. Americas 3. Europe Total 2006
%
20,309
38,838
51,357
110,504
18%
35%
47%
100%
1
2
HRC price – US (US dollars per metric tonnes)
HRC price – German (US dollars per metric tonnes)
HRC price – Far East (US dollars per metric tonnes)
Sources : ArcelorMittal.
600
561
449
ArcelorMittal operations (thousands of metric tonnes)
Shipments of steel products**
102,866 Change year/year
ArcelorMittal financials (millions of US dollars)
Sales
EBITDA***
14,959 Operating income
11,648 Financing costs – net
(1,257) Net income
Net cash provided by operating activities
Net cash used in investing activities
Cash and Short-term investments
Property, plant and equipment Total assets
Short-term debt
Long-term debt – net of current portion
Shareholders’ equity
ArcelorMittal financials per share (US dollars)
ArcelorMittal average share price
29.32
Book value per share
Basic earnings per share
5.97
Change year/year
ArcelorMittal ratios
EBITDA margin
18.7%
Operating margin
14.5%
Interest cover ****
9.3
3
2005*
Steel markets
World steel production (millions of metric tonnes)
1,129.6
Change year/year
Sources : ArcelorMittal, IISI, CRU and NYSE.
* Pro forma.
** Some intercompany shipments are not eliminated.
*** EBITDA defined as operating income plus depreciation.
**** Operating income / financing cost.
2006*
1,239.5
9.7%
642
583
478
110,504
7.4%
88,576
10.5%
15,272
11,824
(1,328)
7,973
(3.5%)
10,825
(4,775)
6,146
54,696
112,166
4,922
21,645
42,127
35.45
30.42
5.76
(3.5%)
17.2%
13.3%
8.9
10 ArcelorMittal Fact Book 2006 – Market and Industry
Market and Industry – ArcelorMittal Fact Book 2006 11
Market and Industry
Looking forward, I am optimistic about the future. Economic indicators
are positive and steel demand growth is expected to remain at between
3 – 5% per year for the foreseeable future. Consolidation should continue,
improving the overall health of the industry and enabling us to take
further steps towards creating a more sustainable environment.
China remains the greatest challenge, but encouragingly current indicators
demonstrate that Chinese exports are beginning to fall. Additionally
it is important that the Chinese steel market, which remains highly fragmented,
also starts to consolidate in order to be able to manage supply and
demand more effectively. The Chinese government has voiced its support
for consolidation and I would hope we will see a move in this direction
over the next few years.
Lakshmi N. Mittal,
President and Chief Executive Officer
35
%
Key Figures
Steel Consumption and Markets
Steel consumption by end-user market in OECD
Global steel market in 2006*:
850 billion US dollars
World crude steel production in 2006*:
1,240 million metric tonnes
World leader in 2006*:
ArcelorMittal
6 7 8 1
1.
2.
3.
4.
5.
6.
7.
8.
5
4
3
2
Construction
Automotive
Shipbuilding
Packaging
Mechanical and Industrial machinery
Oil and Gas
Rails
Other
44%
19%
3%
4%
22%
5%
2%
2%
Source : ArcelorMittal estimates.
* Source : ArcelorMittal estimates and IISI.
World crude steel production 2006 in millions of metric tonnes
Steel consumption by region
1600
8 1
7
1200
2
6
800
3
400
5
0
1950
Source : IISI.
1958
1966
1974
1982
1990
1998
2006
Source : IISI.
4
1.
2.
3.
4.
5.
6.
7.
8.
European Union
Russia and Other Europe
North America
South America
China
Japan
Other Asia
RoW
16%
7%
14%
3%
32%
7%
14%
6%
Steel Consumption and Markets
Steel Production by Process
continued
World steel market by product 2006
Crude steel production by process and region 2006
Millions of metric tonnes
3 1
1. Long 2. Flat 3. Tube 44%
54%
2%
2
Sources : IISI and ArcelorMittal estimates.
Production
European Union
CIS and Other Europe
NAFTA
Central and South America
Africa
Middle East
China
India
Japan
Rest of Asia
Oceania
World
197.9
156.5
130.3
46.3
18.3
15.1
422.7
44.0
116.2
85.6
8.7
1,241.5
Basic Oxygen Furnace
Electric Arc Furnace
Open Hearth Furnace
59.5%
54.3%
42.7%
59.1%
40.1%
14.6%
87.0%
47.3%
74.0%
43.1%
80.7%
65.5%
40.5%
27.3%
57.3%
39.7%
59.9%
85.4%
13.0%
50.5%
26.0%
56.9%
19.3%
32.1%
0.0%
18.4%
0.0%
1.2%
0.0%
0.0%
0.0%
2.6%
0.0%
0.0%
0.0%
2.4%
Source : IISI.
Crude steel production, trades and markets in 2006 (in millions of metric tonnes)
Crude steel production by process 2006
3 1
9
121
2
5
18
130
8
10
9
Source : IISI.
234
11
202
15
2
4
44
6
423
4
6
46
18
7
Source : IISI.
Crude steel production
Trade flow
1
9
1. Basic Oxygen Furnace 2. Electric Arc Furnace 3. Open Hearth Furnace 66%
32%
2%
Apparent Consumption of Finished Steel
Apparent Consumption of Finished Steel
Annual apparent consumption of finished steel
Quarterly apparent consumption of finished steel
Thousands of metric tonnes
1996
1997
1998
1999
2000
2001
2002
2003
Germany
27,689 30,249 31,857 31,536 33,640 31,809 30,730 30,586
Change year/year
-14%
9%
5%
-1%
7%
-5%
-3%
0%
France
13,218 14,372 15,328 16,318 17,318 16,135 17,018 16,206
Change year/year
-4%
9%
7%
6%
6%
-7%
5%
-5%
Italy
21,478 24,674 26,315 26,090 27,156 26,606 26,966 29,403
Change year/year
-19%
15%
7%
-1%
4%
-2%
1%
9%
UK
10,015 10,323 10,972 10,454
9,914 10,441
9,827
9,835
Change year/year
-2%
3%
6%
-5%
-5%
5%
-6%
0%
Spain
10,791 13,296 15,724 17,564 17,910 18,841 19,578 20,397
Change year/year
-16%
23%
18%
12%
2%
5%
4%
4%
Europe
123,208 137,609 148,681 148,526 154,754 153,745 154,686 157,019
Change year/year
-13%
12%
8%
0%
4%
-1%
1%
2%
USA
87,741 94,042 101,767 991,27 102,222 90,061 91,272 89,933
Change year/year
7%
7%
8%
-3%
3%
-12%
1%
-1%
Canada
12,835 14,969 15,705 16,131 17,548 15,066 15,649 15,388
Change year/year
1%
17%
5%
3%
9%
-14%
4%
-2%
100,576 109,010 117,472 115,258 119,769 105,128 106,921 105,321
USA and Canada
Change year/year
6%
8%
8%
-2%
4%
-12%
2%
-1%
Brazil
12,230 12,983 14,932 14,062 16,000 14,461 16,173 14,374
Change year/year
0%
6%
15%
-6%
14%
-10%
12%
-11%
Japan
74,793 77,990 65,062 64,797 73,007 68,472 67,953 70,391
Change year/year
0%
4%
-17%
0%
13%
-6%
-1%
4%
China
88,864 90,143 97,010 111,138 118,059 143,688 179,490 226,388
Change year/year
10%
1%
8%
15%
6%
22%
25%
26%
South Korea
34,056 34,400 21,494 29,245 33,719 33,639 38,622 39,291
Change year/year
7%
1%
-38%
36%
15%
0%
15%
2%
Taiwan
17,733 21,581 20,331 19,591 20,254 16,801 19,521 19,012
Change year/year
-11%
22%
-6%
-4%
3%
-17%
16%
-3%
Asia
242,926 251,339 221,566 245,673 269,307 287,463 334,951 385,552
Change year/year
4%
3%
-12%
11%
10%
7%
17%
15%
CIS
24,318 27,049 28,060 30,900 28,514 31,115 31,278 37,232
Change year/year
16%
11%
4%
10%
-8%
9%
1%
19%
World
593,454 634,342 625,940 659,362 701,902 709,279 764,587 827,801
Change year/year
0%
7%
-1%
5%
6%
1%
8%
8%
Source: CRU.
2005
2006
32,007 31,611
5%
-1%
16,835 16,000
4%
-5%
29,825 29,464
1%
-1%
10,395
8,662
6%
-17%
22,003 21,643
8%
-2%
167,935 161,508
7%
-4%
2004
35,644
13%
16,632
4%
25,261
-14%
9,982
15%
24,813
15%
186,840
16%
103,512 90,523 102,982
15%
-13%
14%
16,796 16,062 17,326
9%
-4%
8%
120,308 106,585 120,308
14%
-11%
13%
15,610
9%
16,758 17,138
7%
2%
72,515 73,623 73,093
3%
2%
-1%
259,180 313,992 363,463
14%
21%
16%
41,394 40,039 44,576
5%
-3%
11%
21,744 19,337 18,418
14%
-11%
-5%
429,116 482,418 539,028
11%
12%
12%
40,006
7%
45,065 48,413
13%
7%
911,445 960,6861,072,239
10%
5%
12%
3Q05
4Q05
1Q06
Germany
8,345
8,111
7,293
Change year/year
3%
7%
-13%
France
4,419
4,152
3,230
Change year/year
0%
-8%
-13%
Italy
8,132
7,762
6,454
Change year/year
15%
2%
-3%
UK
2,449
2,144
1,880
Change year/year
-7%
-21%
-27%
Spain
5,625
5,689
4,954
Change year/year 1%
-3%
2%
Europe42,706 40,857 37,552
Change year/year
3%
-6%
-6%
USA
23,411 22,490 21,607
Change year/year
-5%
-16%
-21%
Canada 3,974
4,048
3,825
Change year/year
-3%
-6%
-6%
USA and Canada27,385 26,538 25,432
Change year/year -4%
-15%
-19%
Brazil 4,245
4,166
4,175
Change year/year 9%
1%
3%
Japan
18,231 18,691 18,126
Change year/year
4%
3%
-1%
China
69,662 76,704 82,660
Change year/year
9%
25%
27%
South Korea
9,920 10,890
9,392
Change year/year
2%
-2%
-6%
Taiwan
5,107
5,213
4,615
Change year/year
-1%
-11%
-16%
Asia 111,590 120,512 123,593
Change year/year
6%
15%
15%
CIS
10,492
9,901 12,381
Change year/year
5%
8%
19%
World 232,574 238,291 240,699
Change year/year
5%
6%
5%
7,862
-1%
4,199
1%
7,116
-16%
2,190
-12%
5,375
-6%
40,393
-7%
8,457
1%
4,348
-2%
7,688
-5%
2,445
0%
5,909
5%
44,278
4%
9,472 8,430 9,285
17%
16%
18%
4,797 3,591 3,896
16%
11%
-7%
8,632 7,983 8,646
11%
24%
22%
2,391 2,525 2,621
12%
34%
20%
6,455 5,951 6,498
13%
20%
21%
48,985 45,455 48,122
20%
21%
19%
23,014
-8%
4,215
-3%
27,229
-7%
26,020
11%
4,513
14%
30,533
11%
27,322 26,915 22,725
21%
25%
-1%
4,744 4,151 3,918
17%
9%
-7%
32,066 31,066 26,643
21%
22%
-2%
4,172
18%
3,364
-21%
Source: CRU.
1Q05
2Q05
2Q06
4,528
9%
3Q06
4,901
17%
4Q06
4,345
4%
18,574 18,181 17,913 18,296 18,703
0%
0%
-4%
1%
1%
84,966 83,427 93,008 91,024 96,004
24%
20%
21%
10%
13%
9,837
9,764 11,632 11,811 11,369
-7%
-2%
7%
26%
16%
4,401
4,119
4,671 4,854 4,774
-16%
-19%
-10%
5%
8%
126,723 125,145 137,084 135,701 141,098
13%
12%
14%
10%
11%
12,291 11,577 11,949 12,478 12,409
19%
10%
21%
1%
1%
249,122 253,077 273,893 269,584 275,685
6%
9%
15%
12%
11%
Crude Steel Production
Crude Steel Production
Annual crude steel production by country/region
Quarterly crude steel production by country/region
1996
1997
1998
1999
2000
2001
2002
2003
Germany
39,821 45,007 44,046 42,061 46,361 44,803 44,939 44,657
Change year/year
-5%
13%
-2%
-5%
10%
-3%
0%
-1%
France
17,623 19,773 20,127 20,202 21,025 19,396 19,977 19,676
Change year/year
-3%
12%
2%
0%
4%
-8%
3%
-2%
Italy
24,453 25,491 25,798 24,898 26,298 26,461 25,070 26,799
Change year/year
-12%
4%
1%
-3%
6%
1%
-5%
7%
UK
18,136 18,543 17,286 16,516 15,022 13,575 11,618 13,074
Change year/year
3%
2%
-7%
-4%
-9%
-10%
-14%
13%
Spain
12,432 13,739 14,821 14,919 15,813 16,503 16,633 16,283
Change year/year
-10%
11%
8%
1%
6%
4%
1%
-2%
Europe
177,118 192,192 193,707 184,209 195,027 189,626 189,177 195,771
Change year/year
-7%
9%
1%
-5%
6%
-3%
0%
3%
USA
94,240 97,226 97,294 96,328 100,711 89,710 91,975 91,339
Change year/year
1%
3%
0%
-1%
5%
-11%
3%
-1%
Canada
14,745 15,354 15,931 16,185 16,761 15,276 15,971 15,713
Change year/year
3%
4%
4%
2%
4%
-9%
5%
-2%
108,985 112,580 113,225 112,513 117,472 104,986 107,946 107,052
USA and Canada
Change year/year
1%
3%
1%
-1%
4%
-11%
3%
-1%
Brazil
25,239 26,151 25,761 24,998 27,815 26,719 29,685 31,147
Change year/year
1%
4%
-1%
-3%
11%
-4%
11%
5%
Latin America
49,767 52,066 51,605 51,095 55,918 51,822 56,441 59,716
Change year/year
5%
5%
-1%
-1%
9%
-7%
9%
6%
Japan
98,803 104,543 93,548 94,195 106,444 102,867 108,009 110,516
Change year/year
-3%
6%
-11%
1%
13%
-3%
5%
2%
China
98,908 107,313 114,135 123,705 126,317 143,137 179,718 219375
Change year/year
6%
8%
6%
8%
2%
13%
26%
22%
South Korea
38,903 42,554 39,895 41,041 43,109 43,852 45,207 46,310
Change year/year
6%
9%
-6%
3%
5%
2%
3%
2%
Taiwan
12,416 16,056 16,903 15,413 17,408 17,340 18,222 18,763
Change year/year
6%
29%
5%
-9%
13%
0%
5%
3%
Asia
294,018 319,326 312,260 323,965 346,265 362,734 414,616 466,366
Change year/year
2%
9%
-2%
4%
7%
5%
14%
12%
CIS
76,521 78,685 73,809 83,731 95,706 98,253 100,068 106,299
Change year/year
1%
3%
-6%
13%
14%
3%
2%
6%
World
735,811 785,908 775,072 785,845 841,588 838,944 897,109 962,620
Change year/year
0%
7%
-1%
1%
7%
0%
7%
7%
Source: IISI.
2005
2006
46,374 44,523
4%
-4%
20,769 19,480
6%
-6%
28,359 29,254
6%
3%
13,847 13,280
6%
-4%
17,634 17,953
8%
2%
205,185 199,400
5%
-3%
2004
47,223
6%
19,865
2%
31,192
7%
13,958
5%
18,184
1%
210,830
6%
98,522 93,216 98,539
8%
-5%
6%
16,304 15,469 15,454
4%
-5%
0%
114,826 108,685 113,993
7%
-5%
5%
32,909
6%
63,888
7%
31,619 30,910
-4%
-2%
62,783 62,655
-2%
0%
112,717 112,472 116,229
2%
0%
3%
280,069 352,811 421,456
28%
26%
19%
47,523 47,772 48,543
3%
1%
2%
19,535 18,546 20,209
4%
-5%
9%
543,091 627,621 716,017
16%
16%
14%
113,118 113,002 119,571
6%
0%
6%
1,059,791 1,126,621 1,231,406
10%
6%
9%
1Q05
2Q05
Germany
11,649
Change year/year
0%
France
5,113
Change year/year
-3%
Italy
7,595
Change year/year
9%
UK
3,257
Change year/year
-3%
Spain
4,515
Change year/year 12%
Europe 51,854
Change year/year
2%
USA
24,103
Change year/year
1%
Canada
4,008
Change year/year -3%
USA and Canada 28,111
Change year/year
0%
Brazil
7,940
Change year/year 0%
Latin America 15,543
Change year/year
0%
Japan
27,763
Change year/year
1%
China
77,658
Change year/year
24%
South Korea
11,802
Change year/year
1%
Taiwan
4,858
Change year/year 0%
Asia 144,490
Change year/year
14%
CIS
27,691
Change year/year
0%
World 272,005
Change year/year
7%
11,247
-3%
5,038
-8%
7,562
4%
3,556
-4%
4,835
-2%
50,884
-5%
22,805
-7%
4004
0%
26,809
-6%
7,988
-2%
16,147
3%
28,964
3%
89,255
36%
11,984
0%
4,832
1%
157,914
22%
28,032
1%
284,307
9%
Source: IISI.
4Q05
1Q06
10,426 11,201
-10%
-2%
4,356
4,973
-10%
-4%
6,562
7,535
0%
0%
3,155
3,312
-8%
-1%
4,156
4,447
-2%
1%
46,141 50,521
-6%
-2%
22,486 23,822
-11%
-5%
3,578
3,879
-13%
-4%
26,064 27,701
-11%
-4%
7,717
7,974
-9%
-3%
15,327 15,766
-7%
-2%
27,832 27,913
-1%
-3%
91,432 94,466
28%
18%
11,547 12,439
1%
0%
4,415
4,441
-8%
-12%
158,387 166,831
17%
10%
27,634 29,645
-3%
1%
278,530 291,778
5%
5%
3Q05
11,253
-3%
5,209
2%
7,847
3%
3,487
7%
4,105
-9%
51,800
0%
12,071 11,889 12,010
7%
14%
7%
5,437 4,469 4,750
8%
3%
-4%
7,980 7,166 8,199
6%
9%
9%
3,668 3,442 3,361
3%
9%
1%
5,090 4,271 4,718
5%
3%
6%
55,088 50,847 53,095
8%
10%
5%
2Q06
3Q06
24,669
2%
3,778
-6%
28,447
1%
25,991 25,334 22,545
14%
13%
-5%
4,020 3,987 3,669
0%
11%
-5%
30,011 29,321 26,214
12%
12%
-5%
7,187
-9%
14,949
-4%
7,292
-9%
15,197
-6%
8,293
7%
16,300
6%
4Q06
8,138
2%
16,209
3%
28,009 28,974 29,080 30,166
1%
0%
4%
8%
92,517 106,264 108,953 113,722
19%
19%
19%
20%
11,645 12,264 12,161 12,473
-1%
2%
5%
0%
4,590
5,210 5,255 5,154
-6%
8%
19%
16%
161,864 178,586 182,074 193,493
12%
13%
15%
16%
28,225
2%
30,431 30,157 30,758
9%
9%
4%
288,826 312,617 311,534 318,429
6%
10%
12%
9%
Selected Steel Import/Export
Selected Steel Import/Export
Annual selected steel import/export
Quarterly selected steel import/export
1998
1999
2000
2001
2002
2003
2004
China**
Import
12,380 17,040 18,110 19,370 26,650 43,050 33,130
Change year/year
-6%
38%
6%
7%
38%
62%
-23%
Export
357
5,250
7,760
6,300
7,020
8,410 20,280
Change year/year
-23% 1371%
48%
-19%
11%
20%
141%
Balance
-12,023 -11,790 -10,350 -13,070 -19,630 -34,640 -12,850
US**
Import
41,520 35,730 37,956 30,080 32,684 22,989 35,807
Change year/year
33%
-14%
6%
-21%
9%
-30%
56%
Export
5,519
5,426
6,529
6,144
6,010
8,220
7,933
Change year/year
-9%
-2%
20%
-6%
-2%
37%
-3%
Balance
-36,001 -30,304 -31,427 -23,936 -26,674 -14,769 -27,874
European Union*
Import
15,828 11,108 14,239 15,436 14,270 15,444 16,965
Change year/year
-4%
-30%
28%
8%
-8%
8%
10%
Export
15,997 14,560 16,640 17,246 17,824 20,301 21,256
Change year/year
0%
-9%
14%
4%
3%
14%
5%
Balance
169
3,452
2,402
1,810
3,554
4,857
4,291
Japan**
Import
5,263
5,158
5,564
4,500
3,685
3,691
4,508
Change year/year
-22%
-2%
8%
-19%
-18%
0%
22%
Export
27,623 28,092 31,448 32,366 38,551 37,199 36,055
Change year/year
6%
2%
12%
3%
19%
-4%
-3%
Balance
22,360 22,934 25,884 27,866 34,866 33,508 31,547
Source: Eurofer, AISI, JISF, Chinese CGA.
* Finished steel.
** Semi-finished and finished steel.
2005
2006
27,130 18,910
-18%
-30%
27,510 52,070
36%
89%
380 33,160
32,110 45,273
-10%
41%
9,393 9,728
18%
4%
-22,717 -35,545
16,290 26,122
-4%
60%
22,430 21,957
6%
-2%
6,140 -4,165
5,466 4,642
21%
-15%
32,374 34,937
-10%
8%
26,908 30,296
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
China**
Import
6,370
7,630
7,090
6,040
4,710
4,910 4,870
Change year/year
-46%
-18%
13%
7%
-26%
-36%
-31%
Export
8,050
8,350
5,400
5,710
7,360 12,820 14,560
Change year/year
324%
109%
-3%
-35%
-9%
54%
170%
Balance
1,680
720
-1,690
-330
2,650
7,910 9,690
US**
Import
8,324
8,479
7,180
8,127 11,221 11,371 12,377
Change year/year
23%
-4%
-31%
-18%
35%
34%
72%
Export
2,586
2,181
2,215
2,411
2,460
2,518 2,380
Change year/year
23%
12%
19%
19%
-5%
15%
7%
Balance
-5,738
-6,298
-4,965 -5,716
-8,761
-8,853 -9,997
European Union*
Import
5,369
4,252
2,899
3,770
5,212
6,471 6,841
Change year/year
55%
1%
-33%
-24%
-3%
52%
136%
Export
5,033
5,690
5,684
6,023
5,446
5,327
5286
Change year/year
-11%
3%
15%
17%
8%
-6%
-7%
Balance
-336
1,438
2,785
2,253
234
-1,144 -1,555
Japan**
Import
1,488
1,518
1,220
1,240
1,161
1,133 1,094
Change year/year
32%
44%
13%
-1%
-22%
-25%
-10%
Export
8,629
8,501
7,851
7,392
8,119
8,892 9,016
Change year/year
-15%
-3%
-8%
-14%
-6%
5%
15%
Balance
7,141
6,984
6,631
6,152
6,959
7,759 7,922
Source: Eurofer, AISI, JISF, Chinese CGA.
* Finished steel.
** Semi-finished and finished steel.
4Q06
4,420
-27%
17,330
204%
12,910
10,304
27%
2,370
-2%
-7,934
7,598
102%
5,898
-2%
-1,700
1,254
1%
8,910
21%
7,656
Steel Prices
Steel Prices
Annual steel prices, Americas
Quarterly steel prices, Americas
Metric tonnes
2003
2004
2005
2006
Metric tonnes
4Q05
1Q06
2Q06
3Q06
4Q06
Latin America Slab Export (USD/t)
229
227
206
200
223
170
212
240
Change year/year
-1%
-1%
-9%
-3%
12% -24%
25%
13%
Latin America Billet Export (USD/t)
188
212
198
160
175
169
194
245
Change year/year
n/c
13%
-7% -20%
10%
-3%
15%
26%
HRC US Domestic (USD/short ton)
345
342
304
292
301
224
323
290
HRC US Domestic (USD/t)
380
377
335
322
332
246
356
320
Change year/year
-1%
-1% -11%
-4%
3% -26%
44% -10%
CRC US Domestic (USD/short ton)
460
460
416
404
411
314
427
386
CRC US Domestic (USD/t)
508
507
458
445
453
347
471
426
Change year/year
-1%
0% -10%
-3%
2% -23%
36% -10%
HDG US Domestic (USD/short ton)
506
533
495
439
428
350
433
397
HDG US Domestic (USD/t)
558
588
546
484
471
386
478
437
Change year/year
-4%
5%
-7% -11%
-3% -18%
24%
-8%
Plate US Domestic (USD/short ton)
397
416
404
331
341
291
324
332
Plate US Domestic (USD/t)
438
458
446
365
376
320
357
366
Change year/year
n/c
5%
-3% -18%
3% -15%
12%
2%
Wire rod US Domestic (USD/short ton)
310
345
325
272
293
285
308
320
Wire rod US Domestic (USD/t)
342
380
359
300
323
314
339
353
Change year/year
n/c
11%
-6% -16%
8%
-3%
8%
4%
Merchant bars US Domestic (USD/short ton)
301
331
344
302
314
248
253
299
Merchant bars US Domestic (USD/t)
331
365
380
333
347
274
279
330
Change year/year
n/c
10%
4% -12%
4% -21%
2%
18%
Sections US Domestic (USD/short ton)
355
362
375
311
367
324
329
322
Sections US Domestic (USD/t)
392
399
413
343
405
358
363
355
Change year/year
n/c
2%
4% -17%
18% -12%
1%
-2%
452
88%
415
-8%
465
12%
367
-29%
463
1%
538
66%
493
37%
371
52%
348
-6%
387
11%
608
671
109%
544
600
-11%
582
642
7%
696
767
80%
631
695
-9%
675
744
7%
735
810
85%
677
747
-8%
770
848
14%
Latin America Slab Export (USD/t)
517
460
325
360
Change year/year
47%
2%
-33%
-27%
Latin America Billet Export (USD/t)
367
355
338
333
Change year/year
7%
-12%
-10%
-9%
HRC US Domestic (USD/short ton)
632
533
461
550
HRC US Domestic (USD/t)
696
587
509
606
Change year/year
37%
-13%
-34%
-16%
CRC US Domestic (USD/short ton)
710
617
556
640
CRC US Domestic (USD/t)
783
680
613
705
Change year/year
32%
-11%
-30%
-15%
HDG US Domestic (USD/short ton)
757
655
603
695
HDG US Domestic (USD/t)
834
722
665
766
Change year/year
38%
-9%
-30%
-14%
653
720
97%
743
819
14%
782
862
5%
535
590
67%
562
619
5%
564
622
0%
503
555
68%
525
579
4%
586
646
12%
526
580
63%
582
641
11%
650
717
12%
Sources: CRU and ArcelorMittal estimates.
1996
1997
1998
1999
2000
2001
2002
Plate US Domestic (USD/short ton)
Plate US Domestic (USD/t)
Change year/year
Wire rod US Domestic (USD/short ton)
Wire rod US Domestic (USD/t)
Change year/year
Merchant bars US Domestic (USD/short ton)
Merchant bars US Domestic (USD/t)
Change year/year
Sections US Domestic (USD/short ton)
Sections US Domestic (USD/t)
Change year/year
Sources: CRU and ArcelorMittal estimates.
1Q05
2Q05
776
856
58%
742
818
19%
585
645
39%
330
-10%
382
8%
550
606
-13%
594
655
12%
640
705
-10%
410
21%
621
685
35%
685
755
11%
425
28%
563
621
2%
717
790
29%
659
726
3%
703
775
-7%
783
863
20%
826
911
37%
765
843
10%
690
761
-4%
765
843
-3%
765
843
-1%
777
856
5%
797
878
15%
790
871
3%
547
603
-8%
545
601
-7%
545
601
-7%
550
606
-3%
591
652
8%
570
628
5%
509
561
-5%
553
610
0%
560
617
7%
580
639
13%
608
670
19%
598
659
8%
540
595
-3%
620
683
7%
620
683
6%
640
706
10%
670
739
24%
670
739
8%
570
628
6%
524
578
25%
514
567
2%
583
643
32%
3Q05
583
643
11%
Steel Prices
Steel Prices
Annual steel prices, Europe*
Quarterly steel prices, Europe*
Metric tonnes
2003
2004
2005
2006
Metric tonnes
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
CIS Slab Export (USD/t)
192
189
166
145
174
132
183
237
Change year/year
-21%
-2% -12% -12%
20% -24%
39%
29%
CIS Billet Export (USD/t)
220
210
185
155
162
144
165
215
Change year/year
-14%
-4% -12% -16%
4% -11%
15%
31%
HRC German Domestic (EUR/t)
259
271
269
236
317
258
276
309
HRC German Domestic (USD/t)
325
306
301
251
293
231
261
350
Change year/year
-25%
-6%
-2% -17%
17% -21%
13%
34%
CRC German Domestic (EUR/t)
372
395
361
314
435
349
367
397
CRC German Domestic (USD/t)
466
446
404
334
402
312
347
450
Change year/year
-20%
-4%
-9% -17%
20% -22%
11%
30%
HDG German Domestic (EUR/t)
411
442
461
375
472
362
374
414
HDG German Domestic (USD/t)
515
483
517
399
436
324
355
468
Change year/year
-20%
-6%
7% -23%
9% -26%
10%
32%
Plate German Domestic (EUR/t)
396
408
355
272
347
381
362
396
Plate German Domestic (USD/t)
496
461
398
289
319
341
343
449
Change year/year
-15%
-7% -14% -27%
10%
7%
1%
31%
Wire rod German Domestic (EUR/t)
235
264
237
224
254
245
264
292
Wire rod German Domestic (USD/t)
295
298
265
238
235
220
250
331
Change year/year
-15%
1% -11% -10%
-1%
-7%
14%
32%
Merchant bars German Domestic (EUR/t)
240
267
280
262
286
293
308
333
Merchant bars German Domestic (USD/t)
301
302
314
279
264
263
291
377
Change year/year
-10%
1%
4% -11%
-5%
-1%
11%
30%
Sections German Domestic (EUR/t)
293
302
312
284
315
310
318
350
Sections German Domestic (USD/t)
367
342
350
302
291
278
301
397
Change year/year
-13%
-7%
2% -14%
-4%
-4%
8%
32%
1996
450
90%
378
-16%
382
1%
283
-43%
290
-41%
390
-9%
447
46%
400
41%
345
60%
337
-2%
381
13%
410
27%
425
28%
443
551
58%
448
561
2%
463
583
4%
486
619
28%
480
619
29%
528
657
46%
551
688
5%
560
705
2%
585
746
23%
569
734
23%
538
670
43%
558
697
4%
642
809
16%
694
885
45%
681
879
42%
493
613
37%
618
770
26%
648
816
6%
661
843
18%
690
890
27%
435
540
63%
378
472
-13%
424
534
13%
453
577
43%
442
570
27%
393
489
30%
415
515
5%
523
659
28%
549
699
42%
549
709
27%
495
616
55%
509
634
3%
552
694
9%
CIS Slab Export (USD/t)
493
428
307
Change year/year
32%
-3%
-38%
CIS Billet Export (USD/t)
353
338
323
Change year/year
18%
-1%
-12%
HRC German Domestic (EUR/t)
519
475
396
HRC German Domestic (USD/t)
681
599
483
Change year/year
58%
14%
-17%
CRC German Domestic (EUR/t)
618
585
496
CRC German Domestic (USD/t)
810
737
606
Change year/year
55%
19%
-13%
HDG German Domestic (EUR/t)
626
587
501
HDG German Domestic (USD/t)
821
739
612
Change year/year
54%
17%
-14%
Plate German Domestic (EUR/t)
651
646
584
Plate German Domestic (USD/t)
854
814
713
Change year/year
68%
46%
10%
Wire rod German Domestic (EUR/t)
449
353
331
Wire rod German Domestic (USD/t)
589
445
404
Change year/year
49%
-25%
-29%
Merchant bars German Domestic (EUR/t)
400
385
403
Merchant bars German Domestic (USD/t)
525
485
491
Change year/year
15%
2%
1%
Sections German Domestic (EUR/t)
564
487
469
Sections German Domestic (USD/t)
740
614
573
Change year/year
51%
7%
-14%
582
742
30%
584
753
23%
Sources: CRU, TEX report, Metal Bulletin and ArcelorMittal estimates.
* Currency conversion based on average exchange rate.
1997
1998
1999
2000
2001
2002
1Q05
2Q05
333
-10%
309
-13%
403
480
-28%
413
497
-27%
503
598
-24%
430
541
22%
476
572
9%
513
610
-17%
649
816
0%
373
449
-24%
470
559
5%
663
834
13%
593
713
-16%
378
450
-26%
575
722
-2%
530
637
-22%
590
701
-5%
474
596
-1%
513
617
-24%
520
618
-23%
382
13%
520
653
35%
510
613
-17%
531
668
9%
Steel Prices
Steel Prices
Annual steel prices, Asia*
Quarterly steel prices, Asia*
Metric tonnes
2003
2004
2005
2006
HRC Japan Domestic (000’ JPY/t)
43.4
48.0
48.0
41.8
41.6
37.9
39.1
48.4
HRC Japan Export (USD/t)
334
334
283
243
297
216
238
320
HRC Far East Market (USD/t)
311
312
260
220
274
205
265
343
Change year/year
-17%
0% -17% -15%
25% -25%
30%
29%
CRC Japan Domestic (000’ JPY/t)
59.5
62.2
60.6
54.6
53.9
48.4
46.6
63.4
CRC Japan Export (USD/t)
487
457
373
340
387
300
320
446
CRC Far East Market (USD/t)
465
436
352
319
365
275
338
460
Change year/year
-12%
-6% -19%
-9%
15% -25%
23%
36%
HDG Japan Domestic (000’ JPY/t)
92.1
99.1 101.6 100.6 101.3
95.8
94.3
98.7
HDG Japan Export (USD/t)
592
600
527
502
553
503
490
523
HDG Far East Market (USD/t)
494
501
428
403
454
369
404
531
Change year/year
-11%
2% -15%
-6%
13% -19%
9%
32%
Plate Japan Domestic (000’ JPY/t)
44.5
47.2
48.6
43.1
41.1
38.6
37.3
44.6
Plate Japan Export (USD/t)
455
430
382
345
375
378
370
370
Plate Far East Market (USD/t)
313
288
240
203
233
196
249
341
Change year/year
n/c
-8% -17% -15%
15% -16%
27%
37%
Wire rod Japan Domestic (000’ JPY/t)
48.9
51.1
49.3
37.5
35.8
41.6
42.5
39.4
Wire rod Japan Export (USD/t)
399
383
333
291
293
303
300
300
Wire rod Far East Market (USD/t)
340
323
274
231
233
226
238
310
Change year/year
n/c
-5% -15% -16%
1%
-3%
6%
30%
Merchant bars Japan Domestic (000’ JPY/t)
42.4
41.2
36.7
31.4
32.0
35.0
37.7
45.2
Merchant bars Japan Export (USD/t)
383
323
287
271
299
267
250
254
Merchant bars Far East Market (USD/t)
359
300
264
248
276
239
245
315
Change year/year
-9% -16% -12%
-6%
11% -13%
2%
29%
Sections Japan Domestic (000’ JPY/t)
38.5
38.4
35.7
32.4
34.5
36.3
38.3
45.7
Sections Japan Export (USD/t)
386
363
288
252
289
283
270
329
Sections Far East Market (USD/t)
375
352
277
241
278
231
258
342
Change year/year
-5%
-6% -21% -13%
16% -17%
12%
33%
1996
67.1
496
460
34%
74.2
629
449
-2%
67.8
539
478
6%
70.4
603
541
18%
89.7
729
592
9%
81.0
627
598
1%
105.0
694
587
10%
116.6
829
627
7%
116.6
725
699
11%
70.2
528
458
34%
83.2
642
461
1%
79.7
627
536
16%
57.0
488
425
37%
68.3
579
390
-8%
74.5
600
418
7%
66.1
494
346
10%
70.0
501
432
25%
69.6
460
456
5%
71.6
509
533
56%
76.3
555
484
-9%
75.7
561
498
3%
1997
1998
1999
2000
2001
2002
Metric tonnes
HRC Japan Domestic (000’ JPY/t)
HRC Japan Export (USD/t)
HRC Far East Market (USD/t)
Change year/year
CRC Japan Domestic (000’ JPY/t)
CRC Japan Export (USD/t)
CRC Far East Market (USD/t)
Change year/year
HDG Japan Domestic (000’ JPY/t)
HDG Japan Export (USD/t)
HDG Far East Market (USD/t)
Change year/year
Plate Japan Domestic (000’ JPY/t)
Plate Japan Export (USD/t)
Plate Far East Market (USD/t)
Change year/year
Wire rod Japan Domestic (000’ JPY/t)
Wire rod Japan Export (USD/t)
Wire rod Far East Market (USD/t)
Change year/year
Merchant bars Japan Domestic (000’ JPY/t)
Merchant bars Japan Export (USD/t)
Merchant bars Far East Market (USD/t)
Change year/year
Sections Japan Domestic (000’ JPY/t)
Sections Japan Export (USD/t)
Sections Far East Market (USD/t)
Change year/year
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
79.1
567
502
6%
77.0
650
482
3%
71.1
650
402
-8%
69.6
650
412
-10%
67.9
483
388
-23%
68.0
552
528
10%
67.4
600
525
31%
67.7
520
472
15%
88.1
750
524
0%
85.4
750
513
-5%
82.2
563
507
-24%
81.0
603
660
-1%
80.4
700
653
25%
80.6
640
573
12%
117.3
850
562
-3%
117.5
850
598
-3%
116.8
657
556
-16%
116.9
703
692
1%
116.1
750
777
38%
116.5
790
770
29%
82.2
650
447
0%
81.7
650
437
-8%
79.9
700
428
-10%
79.9
593
550
14%
79.4
613
577
29%
79.6
600
590
35%
71.2
600
382
-9%
75.0
600
380
-3%
74.8
600
360
-9%
73.3
600
437
8%
74.4
600
447
17%
75.4
600
427
12%
69.1
460
447
7%
69.3
460
420
1%
69.2
460
393
-6%
69.9
460
463
4%
69.5
460
487
9%
69.7
460
480
14%
75.8
530
480
-9%
75.6
530
447
-18%
75.9
530
427
-16%
76.0
553
513
3%
75.4
580
530
10%
75.7
580
520
16%
91.8
667
665
21%
93.5
750
665
21%
115.2
767
662
16%
116.3
850
687
18%
84.5
617
478
2%
84.5
650
482
8%
61.7
550
395
-10%
65.2
567
405
-10%
71.1
533
417
-3%
70.6
550
446
-1%
77.1
580
508
2%
76.6
580
500
-10%
Steel Producers and Industry
Steel Producers and Industry
Top steel producer in 2006
Top steel producer 2006 in million metric tonnes crude steel output
Rank
Company
Country
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
ArcelorMittal*
Nippon Steel
JFE
POSCO
Anben
Baosteel
US Steel
Nucor
Tangshan
Corus Group
Riva
Severstal
ThyssenKrupp
Evraz
Gerdau
Jiangsu Shagang
Wuhan
Sumitomo
SAIL
Techint
Luxembourg
Japan
Japan
Korea
China
China
U.S.
U.S.
China
U.K.
Italy
Russia
Germany
Russia
Brazil
China
China
Japan
India
Argentina
Sources: Metal Bulletin – ArcelorMittal estimates.
* Pro forma Arcelor, Dofasco.
ArcelorMittal
Nippon Steel
JFE
POSCO
Anben
Baosteel
US Steel
Nucor
Tangshan
Corus Group
million metric tonnes crude steel output
118.0
33.7
32.0
31.2
22.6
22.5
21.3
20.3
19.1
18.3
18.2
17.6
16.8
16.1
15.6
14.6
13.8
13.6
13.5
12.8
0
20
40
Sources: Metal Bulletin – ArcelorMittal estimates.
* Pro forma Arcelor, Dofasco
60
80
100
120
30 ArcelorMittal Fact Book 2006 – Operations
Operations
The ArcelorMittal merger has created a steel company with an unrivalled
geographical footprint. Three times the size of its nearest competitor,
ArcelorMittal has steel plants on four continents and a presence in over
60 countries, enjoying regional leadership in North and South America,
Western Europe, Eastern Europe, CIS and Africa.
60
Operations – ArcelorMittal Fact Book 2006 31
Group Structure
ArcelorMittal
Flat Carbon Americas
Flat Carbon Europe
Long Carbon Americas
and Europe
Asia, Africa, Commonwealth
of Independent States and
Balkans (AACIS)
Stainless
CST
Dofasco
Acería Compacta
de Bizkaia
Arcelor Atlantique
et Lorraine
Acindar
Arcelor Bergara
Mittal Steel
Annaba
Mittal Steel
Kryviy Rih
Acesita
Mittal Steel
Lázaro Cárdenas
Mittal Steel USA
Arcelor Bremen
Arcelor
Eisenhüttenstadt
Arcelor Madrid
Arcelor Olaberría
Mittal Steel
Liberia
Mittal Steel
South Africa
Ugine and Alz
France
Arcelor España
Arcelor
Méditerranée
Arcelor Profil
Luxembourg
Arcelor Rodange
Mittal Steel
Temirtau
Sonasid
Arcelor Steel
Belgium
Cockerill Sambre
Belgo
Mittal Canada
Industeel Belgium
Industeel France
Mittal Steel
Hamburg
Mittal Steel
Hochfeld
Mittal Steel Galati
Mittal Steel
Ostrava
Mittal Steel Point
Lisas
Mittal Steel
Ruhrort
Mittal Steel
Poland
Arcelor Piombino
Mittal Steel USA
Arcelor Huta
Warszawa
Mittal Steel
Poland
Mittal Steel
Ostrava
ArcelorMittal Steel Services
and Solutions (AM3S)
Ugine and Alz
Belgium
Arcelor Auto
Processing France
Arcelor
Construction
France
Arcelor
International
America
PUM Service
D’Acier
Ravené Schäfer
Key Operating Subsidiaries
Subsidiary (full legal name)
Companhia Siderúrgica de Tubarão S.A.
Dofasco Inc.
Mittal Steel Lázaro Cárdenas S.A. de C.V.
Mittal Steel USA Inc.
Flat Carbon Europe
Aceria Compacta de Bizkaia, S.A.
Arcelor Atlantique et Lorraine SAS
Arcelor Bremen GmbH
Arcelor Eisenhüttenstadt GmbH
Arcelor España S.A.
Arcelor Méditerranée SAS
Arcelor Steel Belgium N.V.
Arcelor Piombino S.p.a.
Cockerill Sambre S.A.
Industeel Belgium S.A.
Industeel France S.A.
Mittal Steel Galati S.A.
Mittal Steel Ostrava a.s.
Mittal Steel Poland S.A.
Long Carbon Americas and Europe
Acindar Industria Argentina de Aceros S.A.
Arcelor Bergara, S.A.
Arcelor Huta Warszawa Sp.z.o.o.
Arcelor Madrid, S.L.
Arcelor Olaberría, S.L.
Arcelor Profil Luxembourg S.A.
Arcelor Rodange S.A.
Belgo Siderurgia S.A.
Mittal Canada Inc.
Mittal Steel Hamburg GmbH
Mittal Steel Hochfeld GmbH 2
Mittal Steel Ostrava a.s.
Mittal Steel Point Lisas Ltd.
Mittal Steel Poland S.A.
Mittal Steel Ruhrort GmbH 2
Mittal Steel USA Inc.
Registered office
Percentage ownership
Av. Brigadeiro Eduardo Gomes, 930, Jardim Limoeiro, 29163-970 Serra
Espirito Santo, Brazil
1330 Burlington Street East, L8N 3J5 Hamilton, Ontario, Canada
Fco. J. Mujica No. 1-B, Apartado Postal No. 19-A, C.P. 60950
Cd. Lázaro Cárdenas, Michoacan, Mexico
1 South Dearborn, Chicago, IL 60603, USA
67.41%
6, Chavarri, 48910 Sestao, Vizcaya, Spain
1 à 5, rue Luigi Cherubini, 93200 St Denis, France
Auf Den Delben 35, D-28237 Bremen, Germany
Werkstr. 1, D-15890 Eisenhüttenstadt, Brandenburg, Germany
Residencia La Granda, 33418 Gozon, Asturias, Spain
Avenue de l’Yser, 24, 1040 Brussels, Belgium
Via S.Egidio nr.16, 50123 Firenze, Italy
Rue Trasenster, 21, 4102 Seraing, Belgium
Rue de Châtelet, 266, 6030 Charleroi, Belgium
Strada Smardan nr. 1, Galati, Romania
Vratimovska 689, 707 02 Ostrava-Kunčice, Czech Republic
Ul. Chorzowska 50, 40-121 Katowice, Poland
99.72%
100%
99.88%
100%
99.72%
100%
99.82%
99.79%
100%
100%
100%
99.65%
84.47% 1
99.48% 1
2739, Estanislao Zeballos, B1643 AGY Buenos Aires, Argentina
6, C/Ibarra, 20570 Bergara, Spain
UL.Kasprowicza 132, 01-949 Warszawa, Poland
Ctra. De Toledo KM 9,200, 28021 Madrid, Spain
Carretera Nacional Madrid – Irun S/N, 20212 Olaberría, Spain
66, rue de Luxembourg, 4221 Esch sur Alzette, Luxembourg
1, rue de l’Industrie, BP 24, 4801 Rodange, Luxembourg
1115, avenida Carandai, 24° Andar, 30130-915 Belo Horizonte- MG, Brazil
4000, route des Aciéries, Contrecoeur, Québec J0L 1C0, Canada
Dradenaustrasse 33, D-21129 Hamburg, Germany
Wörthstrasse 125, D-47053 Duisburg, Germany
Vratimovska 689, 707 02 Ostrava-Kunčice, Czech Republic
Mediterranean Drive, Point Lisas, Couva, Trinidad and Tobago
Ul. Chorzowska 50, 40-121 Katowice, Poland
Vohwinkelstrasse 107, D-47137 Duisburg, Germany
1 South Dearborn, Chicago, IL 60603, USA
44.38% 3
99.72%
100%
99.72%
99.72%
99.82%
79.70%
67.41% 5
100%
100%
100%
84.47% 1
100%
99.48% 1
100%
100%
5
100%
100%
100%
Subsidiary (full legal name)
AACIS
Mittal Steel Annaba Spa
OJSC Mittal Steel Kryviy Rih
Mittal Steel Liberia Limited Mittal Steel South Africa Ltd.
JSC Mittal Steel Temirtau
Société Nationale de Sidérurgie, S.A.
Stainless Steel
Acesita S.A.
Ugine & Alz Belgium N.V.
Ugine & Alz France S.A.
AM3S
Arcelor Auto Processing France SAS
Arcelor Construction France S.A.
Arcelor International America, LLC
Produits d’Usines Métallurgiques
Pum-Station Service Acier S.A.
Ravené Schäfer GmbH
Represents the percentage of shares to which
Mittal Steel has title or that are subject to an
executed agreement providing for their transfer to
Mittal Steel at a fixed price and future date.
2
Mittal Steel Ruhrort and Mittal Steel Hochfeld are
together referred to as Mittal Steel Duisburg.
1
Registered office
Percentage ownership
Sidi Amar, El-Hadjar Complex, B.P. 2055 Annaba 23000, Algeria
1 Ordzhonikidze Street, Kryviy Rih, 50095 Dnepropetrovsk Oblast, Ukraine
401, Ocean View Apartments, UN Drive, Monrovia, Liberia
Main Building, Room N3/5, Delfos Boulevard, Vanderbijlpark, 1911, South Africa
Republic Ave., 1, 101407 Temirtau, Karaganda Region, Republic of Kazakhstan
Route Nationale n° 2, Km 18, BP 551, Al Aarroui, Morocco
Avenida Joao Pinheiro, 580, Centro, 30130-180 Belo Horizonte, Minas Gerais, Brazil
Avenue de l’Yser, 24, 1040 Brussels, Belgium
70%
93.77%
70%
52%
100%
32.34% 4
57.32%
99.82%
100%
Route de Saint Leu d’Esserent, 60160 Montataire, France
Immeuble Hermès, 20, rue Jacques Daguerre, 92500 Rueil Malmaison, France
350 Hudson Street, 4th floor, New York, New York 10014, USA
100%
100%
100%
1 & 3, place Max Rousseaux, 51076 Reims Cedex, France
Gutenbergstrasse 11, D-33790 Halle, Germany
100%
100%
Acindar Industria Argentina de Aceros S.A.
is controlled by Arcelor Brazil, a subsidiary
of Mittal Steel.
4
Société Nationale de Sidérurgie, S.A.
is controlled by Nouvelles Sidérurgies Industrielles,
a subsidiary of Mittal Steel.
3
On 4 June ArcelorMittal increased it stake
in Arcelor Brasil to 96.6% of the company.
ArcelorMittal intends to redeem all of the
remaining shares through a tender squeeze out
process as permitted by Brazilian regulations.
5
Strong Track Record of Successful Integration
Hunan Valin
Trinidad
Ispat International
Sibalsa
Karmet
Sidbec
Alfasid
Hamburg
Sidex
LNM
Jones & Laughlin
Jones & Laughlin
Kryvorizhstal
Youngstown Sheet & Tube
Ruhrort
Novahut
Republic
Hochfeld
PHS
Bethlehem
Inland
Hunedoara
Lukens
Unimetal
BH Steel
Acme
Iscor
Arbed
LTV
ISG
Bethlehem
National Steel
Weirton Steel
Korf Group
Georgetown
CST
Arcelor Brazil
Belgo
Arbed
Belgo
Bremen
Acindar
Sidmar
Dofasco
Aceralia
Aristain
Aceralia
UCIN
Velasco
Usinor
Sacilor
Usinor
Ugine
Cockerill/EkoStahl
Huta Warsawa
Acesita
Sonasid
Sicartsa
2006 Monthly Highlights
January 2006
June 2006
Historic moment for the
Global Steel Industry
Historic agreement to create
the No.1 Global Steel Company
2006 has been a very exciting and challenging year
for ArcelorMittal. The new company has been at the forefront
of the consolidation process, leading the industry through
mergers and acquisitions.
The year starts with the historic launch
of the Mittal Steel offer to the shareholders
of Arcelor to create the world’s first
100 million tonne plus steel producer.
The aim of increasing globalisation
and consolidation, necessary in the steel
industry, defines the deal and sets the
pace for the industry.
Creating the world’s largest steel
company, Mittal Steel and Arcelor
reach an agreement to combine the
two companies in a merger of equals.
The terms of the transaction were
reviewed by the Boards of Arcelor and
Mittal Steel which each recommended
the transaction to their shareholders.
The combined Group, domiciled
and headquartered in Luxembourg,
is named ArcelorMittal.
February 2006
Expansion and strong results
Creating the world’s largest steel
company, Mittal Steel and Arcelor
reach an agreement in June 2006
to combine the two companies
in a merger of equals. The terms
of the transaction were reviewed
by the Boards of Arcelor and Mittal
Steel which each recommended
the transaction to their shareholders.
Mittal Canada completes the acquisition
of three Stelco subsidiaries, the Norambar
and Stelfil plants, located in Quebec,
and the Stelwire plant in Ontario.
Stelfil and Stelwire will add 250,000
tonnes of steel wire to the company’s
annual production capacity, providing
a wider product mix to better meet
customers’ needs.
Arcelor acquires a 38.41% stake
in Laiwu Steel Corporation, in China.
Laiwu Steel Corporation is China’s
largest producer of sections and beams,
and will further boost its operational
excellence thanks to this partnership.
It is still awaiting approval with the
Beijing authorities.
April 2006
Renewal after Hurricane Katrina
and new galvanized line
Out of the devastation of Hurricane
Katrina, arose a revitalised Mississippi
youth baseball field, rebuilt with the
help of Mittal Steel USA and Arcelor.
The companies provide money
towards the purchase of lighting
fixtures and steel cross bar support.
It also arranges for and donates the
labour costs for their installation.
Mittal Steel USA places a new line
into operation in Cleveland to provide
top-quality galvanized sheet steel to
automakers and other demanding
customers. The new line is designed
to produce in excess of 630,000 tonnes
of corrosion-resistant sheet annually,
using the hot-dip galvanizing process.
May 2006
US clears the way for bid
Mittal Steel announces US antitrust
clearance for the Arcelor bid and
the approval of the offer documents
by European regulators. The acceptance
period starts in Luxembourg, Belgium
and France on 18 May 2006 (some
days later for Spain and the United
States) and lasts until 29 June 2006.
Arcelor contributes to the first
anti-seismic school building in Izmit
(Turkey), where a school building
had been destroyed by an earthquake
in 1999.
Demonstrating the commitment
to extend markets in developing
nations, a strategic partnership between
ArcelorMittal and SNI (Société
Nationale d’Investissement) is concluded
concerning the development of Sonasid.
This consolidates and develops the
position of Sonasid on the Moroccan
market, allowing the company to benefit
from the transfer of ArcelorMittal’s
technologies and skills in the Long
Carbon Steel product sector.
ArcelorMittal acquires Sicartsa,
the leading Mexican long steel producer.
Sicartsa is a fully integrated producer
of long steel with an annual production
capacity of about 2.7 million tonnes,
and with production facilities in Mexico
and Texas. This combination of Sicartsa
with Mittal Steel Lázaro Cárdenas
leads to the creation of Mexico’s largest
steel producer with an annual capacity
of 6.7 million tonnes.
ArcelorMittal signs a Memorandum
of Understanding for the Greenfield
project in Orissa, India. The aim is to
set up steelmaking operations in the
Keonijhar District. The integrated steel
plant should have a total annual capacity
of 12 million tonnes. This would include
captive mining facilities, captive power
supply, water supply infrastructure and
other facilities including setting up
townships for employees.
ArcelorMittal announces new
dividend policy, under which it will pay
out 30% of net income annually.
The first slab in the new continuous
caster in Dabrova has been produced
and represents a key step of the successful
restructuring of ArcelorMittal Poland.
Other projects had been achieved earlier,
such as the relining of a blast furnace
in September 2006, the commissioning
of the new colour coating line in Huta
Florina. The start-up of a new hot strip
mill in Krakow is foreseen in the first
half of 2007.
93.7% of Arcelor shareholders
tender their shares to Mittal Steel.
ArcelorMittal says EBITDA will be
higher in 2007 than in 2006.
ArcelorMittal confirms Value Plan
up to 2008.
February 2007
December 2006
ArcelorMittal announces its first set
of pro forma full year results.
September 2006
New dividend policy
Deals, deals, deals!
ArcelorMittal sells Thüringen
long carbon steel plant to Grupo
Alfonso Gallardo for €591 million,
as part of Mittal Steel’s commitments
to the European Commission.
ArcelorMittal and the Government
of Liberia conclude the review
of the Mining Development Agreement.
With this agreement giving access
to iron ore mining, with capacity
of 15 million tonnes a year, the Liberian
Government and ArcelorMittal will
be partners in jumpstarting economic
recovery and development for Liberia.
The US$1 billion investment will
bring around 3,500 direct jobs and
15,000 to 20,000 indirect jobs.
ArcelorMittal sells the Italian long
carbon steel production Travi e
Profilati di Pallanzeno and San Zeno
Acciai to Duferco for €117 million,
as part of Mittal Steel’s commitment
to the European Commission.
Recent events
ArcelorMittal signs various agreements
with the State of Senegal in West Africa,
to develop iron ore mining in the
Faleme region of South East Senegal.
With an expected investment of
approximately US$2.2 billion, the project
will encompass the development of the
mine, the building of a new port near
Dakar and the development of about
750km of rail infrastructure. The mine
should start production in 2011.
ArcelorMittal signs partnership agreement
for a seamless tube-mill in Saudi Arabia.
June 2007
Recent events
ArcelorMittal acquired the remaining
outstanding shares in Arcelor Brasil S.A.
through a mandatory tender offer for
a total consideration of approximately
US$5.4 billion of which approximately
US$3.7 billion in cash and 27.0 million
ArcelorMittal shares, elevating its stake to
96.6% of the company.
ArcelorMittal, the world’s leading
steel company, launched its brand
identity and design.
01
Board of Directors
02
ArcelorMittal’s Board of Directors is composed
of 18 members, responsible for the overall supervision
of the company. Twelve of its members were appointed
equally by Arcelor and Mittal Steel. There are three shareholder
representatives and three employee representatives.
The Board is truly international in character.
Joseph Kinsch (01), 73, is the Chairman
of ArcelorMittal’s Board of Directors.
At the helm of Luxembourg-based
steelmaker Arbed, he has been one
of the key consolidators of the world
steel industry of the last decades,
first by reshaping Arbed’s strategy and
steering its growth, notably in Europe
and Brazil, then by assuming a significant
role in the three-way merger of European
steel companies which resulted in Arcelor,
and recently by negotiating a merger
of equals between Arcelor and Mittal
Steel. Mr. Kinsch joined Arbed in 1961
at its Burbach (Saar, Germany) plant.
A year later, he moved to the company’s
headquarters in Luxembourg. There,
he held various financial (accounting and
finance) and industrial (steel processing)
positions. Mr. Kinsch was a member
of the Group’s Management Board from
1980 to 1991, became CEO in 1992
and Chairman of the Board of Directors
in 1993. In 2002, at the creation
of Arcelor, he was chosen to chair the
Board of Directors of the new company.
Joseph Kinsch holds a Master degree
in Economics and is a Doctor of Laws
h.c. He is the Honorary Consul of
Brazil in Luxembourg. His merits as an
entrepreneur have been widely recognised
throughout the world.
Lakshmi N. Mittal (02), 56, is the
President of the Board of Directors
and Chief Executive Officer of Arcelor
Mittal. He is the founder of Mittal
Steel and has been responsible for its
strategic direction and development.
He is widely recognised for the role
he has played in restructuring the steel
industry towards a more consolidated
and globalised model. He is also a
non-executive Director of Mittal Steel South
Africa, an executive committee member
of the International Iron and Steel Institute,
a member of the Foreign Investment
Council in Kazakhstan, the International
Investment Council in South Africa, the
World Economic Forum’s International
Business Council, a Director of ICICI Bank
Ltd and is on the Advisory Board of the
Kellogg School of Management in the
United States. At the end of 2006,
Mr. Mittal was named Man of the Year
by the Financial Times, Business
Person of 2006 for The Sunday Times,
Gewinner 2006 for Die Welt,
and Newsmaker of the Year for Time
magazine. He was awarded Fortune
magazine’s ‘European Businessman
of the Year 2004’ and was named
‘Entrepreneur of the Year’ by the Wall
Street Journal in 2004. He was previously
named Steel Maker of the Year in 1996
by New Steel, a leading industry publication
and was awarded the 8th honorary
Willy Korf Steel Vision Award, the highest
recognition for worldwide achievement
in the steel industry. Mr. Mittal has
been nominated for the 2007 Dwight D.
Eisenhower Global Leadership Award.
Vanisha Mittal Bhatia (03), 26,
was appointed as a member of the
LNM Holdings Board of Directors
in June 2004. Mrs. Vanisha Mittal
Bhatia was appointed to Mittal Steel’s
Board of Directors in December
2004. She has a Bachelor of Arts
degree in Business Administration
from the European Business School
and has completed corporate internships
at Mittal Shipping, Mittal Steel Hamburg
GmbH and an Internet-based venture
capital fund. She is the daughter of
Mr. Lakshmi N. Mittal.
Narayanan Vaghul (04), 70, has 49
years of experience in the financial
sector and has been the Chairman
of Industrial Credit and Investment
Corporation of India for 16 years and
of ICICI Bank Ltd. for the last two years.
Prior to that, he was Chairman of the
Bank of India and Executive Director
of the Central Bank of India. He was
chosen as the Businessman of the Year
in 1992 by Business India, a leading
Indian publication, and has served
as a consultant to the World Bank,
the International Finance Corporation
and the Asian Development Bank.
Mr. Vaghul was also a visiting Professor
at the Stern Business School at New York
University. Mr. Vaghul is Chairman of
the Indian Institute of Finance Management
and Research and is also a Board member
of various other companies, including Wipro
Ltd., Mahindra & Mahindra Ltd., Nicholas
Piramal India Ltd., Apollo Hospitals Ltd.
and Himatsingka Seide Ltd.
Wilbur L. Ross, Jr. (05), 69, was the
founder of ISG which merged with
LNM to create Mittal Steel in 2004.
Mr. Ross is the Chairman and Chief
Executive Officer of WL Ross & Co LLC,
a merchant banking firm, a position
he has held since April 2000. Mr. Ross
is also the Chairman and Chief Executive
Officer of WLR Recovery Fund L.P.,
WLR Recovery Fund II L.P., Asia Recovery
Fund, Asia Recovery Fund Co-Investment,
Nippon Investment Partners and Absolute
Recovery Hedge Fund. Mr. Ross is also
the general partner of WLR Recovery
Fund L.P., WLR Recovery Fund II L.P.,
Asia Recovery Fund and Absolute Recovery
Hedge Fund. Mr. Ross is also Chairman
of Ohizumi Manufacturing company
in Japan, Chairman of International Textile
Group, International Coal Group and of
Marquis Who’s Who Inc., in the United
States and Chairman of Insuratex Ltd.,
in Bermuda. Mr. Ross is a Board member
of the Turnaround Management Association,
Nikko Electric Co. in Japan, Tong Yang
Life Insurance Co. in Korea and of Syms
Corp., Clarent Hospital Corp. and News
Communications Inc. in the United States.
He is also Director of IAC Acquisition
Corporation Ltd. in the United Kingdom,
Compagnie Européenne de Wagons
SARL in Luxembourg, Oxford Automotive
in Denmark and Safety Components
International in the United States.
He is Director of the Japan Society
and of the Yale School of Management.
Mr. Ross is also a member of the Business
Roundtable. Previously, Mr. Ross served
as the Executive Managing Director at
Rothschild Inc., an investment banking
firm, from October 1974 to March 2000.
Mr. Ross was also Chairman of the
Smithsonian Institution National Board.
03
04
05
06
07
08
Lewis B. Kaden (06), 64, has
approximately 38 years of experience
in corporate governance, dispute mediation,
labour and employment law and economic
policy. He is currently Vice Chairman
and Chief Administrative Officer of Citigroup
Inc. Prior to that, he was a partner
at the law firm of Davis Polk & Wardwell,
and served as Counsel to the Governor
of New Jersey, as a Professor of Law
at Columbia University and as Director
of Columbia’s Centre for Law and Economic
Studies. He has served as a Director
of Bethlehem Steel Corporation for
ten years and is currently Chairman
of the Board of Directors of the Markle
Foundation. He is a member of the Council
on Foreign Relations and the moderator
of the Business-Labor Dialogue.
Mr. Kaden is a graduate of Harvard
College and of Harvard Law School.
He was the John Harvard Scholar at
Emmanuel College, Cambridge University.
François H. Pinault (07), 70, is the
founder and former President of the
Artemis Group and PPR. The Artemis
Group is a €25 billion global investment
holding company including 42% of the
listed company PPR. PPR includes retail
brands, such as FNAC, La Redoute,
Le Printemps, Conforama and luxury
brands, such as Gucci Group, which
includes Gucci, Bottega Veneta, Yves
Saint Laurent, Boucheron and Balenciaga.
Artemis also owns Chateau Latour
vineyard in France and Christie’s auction
house. Mr. Pinault also owns insurance
and media businesses and holds minority
shares in the French group Bouygues.
Mr. Pinault serves on the Board of Directors
for Financière Pinault and Artemis.
09
José Ramón Álvarez Rendueles (08),
66, has extensive experience in
the financial, economic and industrial
sectors. He was former Governor
of the Bank of España and President
of the Bank Zaragozano. He is President
of the Board of Directors of Arcelor
España, Peugeot España and Pirelli
España. He is professor of public finance
at the Universidad Autónoma de Madrid,
the President of the Prince of Asturias
Foundation and a Director of Gestavisíon
Telecinco S.A.
Sergio Silva de Freitas (09), 63,
has 40 years of experience in the financial
sector. He is President of the Board
of Directors and of the Audit, Appointments
and Remunerations Committees of Arcelor
Brasil. After several years spent in high
ranking positions in important financial
institutions in London and in Washington,
he became Senior Vice President of Banco
Itaù and is now member of the International
Advisory Board of Banco Itaù, Sao Paulo,
Brazil. He has a Bachelor’s degree in
Electrical Engineering from Escola Nacional
de Engenharia da Universidade Brasil.
10
Board of Directors
11
12
13
14
15
16
17
continued
Georges Schmit (10), 53,
is Director General at the Ministry
of the Economy and Foreign
Trade and a Member of the Board
of Economic Development of the
Grand-Duchy of Luxembourg. He is
also Vice Chairman of the Société
Nationale de Crédit et d’Investissement
(SNCI) and of the « Entreprise des
Postes et Télécommunications »,
Luxembourg and a Director of SES
Global S.A., of Banque et Caisse
d’Epargne de l’Etat, Luxembourg,
and of Paul Wurth S.A. Since 2000,
he has been the representative of
Luxembourg on the Enterprise Policy
Group, an advisory body to the European
Commission. Mr. Schmit holds a Master
of Arts degree in Economics from the
University of Michigan.
Edmond Pachura (11), 72, has
40 years of experience in the
industrial sector. He is Chairman
of the Union des Négociants en Aciers
Spéciaux (UNAS), Paris. Previously,
he was Director of Renault and CEO
of Sollac. Mr. Pachura has also been
a member of the Board of Directors
of Charbonnages de France since 1997
and of the SNCF (Société Nationale
des Chemins de Fer) since 1998.
Michel Angel Marti (12), 59,
is a representative of the
employees. He is former Secretary
of the Conféderation Française
Démocratique du Travail (CFDT)
union, Broye, France.
Manuel Fernández López (13), 60,
is a representative of the employees.
He is also Secretary General
of the Metal, Construcción y Afines
de UGT union; Federación Estatal
(M.C.A.-U.G.T.); Madrid, Spain.
John O. Castegnaro (15), 61,
is a representative of the employees.
He is a member of the Luxembourg
Parliament and Honorary Chairman
of trade union Onhofhängege
Gewerkschaftsbond Lëtzebuerg (OGB-L).
Jean-Pierre Hansen (14), 58,
is Vice Chairman of the Executive
Committee and Senior Executive Vice
President of Suez, and is responsible
for Operations. He entered the
electricity and gas sector in 1975.
Since 1 January 2005, Mr. Hansen
has been Vice Chairman and CEO
of Electrabel, a role he previously held
from 1992 to March 1999. Since March
1999, he has also held the position
of Chairman of the Executive Committee
of Electrabel. He is also CEO of
Suez-Tractebel, Chairman of Fabricom
and Director of Distrigas, Fluxys, AGBAR
and ACEA, Vice Chairman of the Federation
of Enterprises in Belgium, and Associate
Professor of Economics at the UCL
and at the École Polytechnique (Paris).
Mr. Hansen holds a Master’s degree
in Electrical Engineering, a degree
in Economics and a Doctorate
in Engineering.
Antoine Spillmann (16), 43, is a
representative of Corporación JMAC
B.V. After several years spent in different
banks, mainly in the United Kingdom,
he is now Asset Manager and executive
partner at the firm Bruellan, an asset
management company based in Geneva.
H.R.H. Prince Guillaume de Luxembourg
(17), 43, worked for six months
at the International Monetary Fund
in Washington, US and spent two years
at the Commission of European
Communities in Brussels. He studied
at Oxford University and graduated from
Georgetown University in the United States.
Romain Zaleski (18), 73, graduated
from the Ecole Polytechnique
and from the Ecole des Mines de Paris
(Mining School). He then served
as a technical consultant in the public
service, in particular at the Ministry
of Industry. After leaving the public service,
he was appointed as a Managing Director
in several groups related to industry
and to banking. In 1984, he settled in Italy
and dedicated himself to the reorganisation
and the development of Carlo Tassara
SpA group, a leading company operating
in the sectors of heavy industry, steel
industry, ironworks, metallurgy and
production of electric power. He led the
Carlo Tassara group to its current position,
with the holding of interests in the
banking sector in Mittel, Banca Intesa,
Banca Lombarda and Generali, as well
as in the industrial sector, in Eramet and
in Mittal Steel. Managing Director of
the Carlo Tassara group and of Banca
Lombarda, one of the top ten Italian banks,
from 2003 to 2005, Mr. Zaleski was
also Chairman of Italenergia Bis, a holding
company of the Edison group, the second
largest producer of electric power in Italy.
18
The Group Management Board
The strategic direction of the business is the responsibility
of a six-strong Group Management Board (GMB), formed in August 2006.
The GMB members were appointed by the Board of Directors,
and is headed by Lakshmi N. Mittal as Chief Executive. Its composition
reflects the Group’s new structure, which is divided into five key segments.
Roland Junck, Member of the Group
Management Board, Advisor to the CEO
Roland Junck was previously a member
of the Group Management Board
of Arcelor with responsibility for the
global Long Carbon Steel and Wire Drawing
business and for China. He started his
career with Arbed in 1980 in the rolling
mills at Dudelange, before moving to
Esch-Schifflange in 1985. In 1993,
Mr. Junck was named General Manager
of TrefilArbed Bissen, being appointed
Managing Director in 1996. He was named
Senior Vice President of Aceralia in
1998 and was a member of the Arbed
Group Management Board from 1999
to 2002 when he was appointed Senior
Executive Vice President of the newly
created Arcelor. Mr. Junck graduated
from the Federal Polytechnic in Zurich
and earned an MBA from Sacred Heart
University of Luxembourg.
Aditya Mittal, CFO, Member of the
Group Management Board, Responsible
for Flat Products Americas
Aditya Mittal is Chief Financial Officer
of ArcelorMittal with additional responsibility
for Flat Products Americas and for Merger
and Acquisitions. Prior to the merger to
create ArcelorMittal, Aditya Mittal held the
position of President and CFO of Mittal
Steel from October 2004 to 2006.
He joined Mittal Steel in January 1997
and has held various finance and
management roles within the company.
In 1999, he was appointed Head of
Mergers and Acquisitions for Mittal Steel.
In this role, he led the company’s
acquisition strategy, resulting in Mittal
Steel’s expansion into Central Europe,
Africa and the United States. These
acquisitions included Kryvorizhstal in
Ukraine, Polskie Huty Stali in Poland, Nova
Hut in Czech Republic, Sidex in Romania,
Annaba in Algeria, Iscor in South Africa,
and International Steel Group in the US.
In addition to his Merger and Acquisition
responsibilities, Aditya Mittal was involved
in post-integration, turnaround and
improvement strategies. This led to Mittal
Steel emerging as the world’s largest and
most global steel producer, growing its
steelmaking capacities fourfold.
From left to right:
Malay Mukherjee,
Aditya Mittal,
Roland Junck,
Lakshmi N. Mittal,
Gonzalo Urquijo,
Michel Wurth.
As CFO of Mittal Steel, he also initiated
and led Mittal Steel’s offer for Arcelor to
create the first 100 million tonne plus steel
company. Aditya Mittal holds a Bachelor’s
degree of Science in Economics with
concentrations in Strategic Management
and Corporate Finance from the Wharton
School in Pennsylvania from which he
graduated magna cum laude. Aditya Mittal
is the son of Mr. Lakshmi N. Mittal.
Malay Mukherjee, Member of the Group
Management Board, Responsible for
Asia and Africa, Mining, Stainless
Malay Mukherjee has over 30 years
of experience in a variety of technical
and commercial functions in the steel
industry, including iron ore mining, project
implementation, materials management
and steel plant operations. He joined
the LNM Group in 1993 from the Steel
Authority of India, where his last position
was as Executive Director (Works) at the
Bhilai Steel Plant, the largest integrated
steel plant in India, with a production
capacity of approximately four million
tonnes. Mr. Mukherjee has a Master’s
degree in Mining from the USSR State
Commission in Moscow and a Bachelor
of Science degree from the Indian Institute
of Technology in Kharagpur, India.
Mr. Mukherjee has completed an advanced
Management Programme conducted
by the Commonwealth Secretariat in joint
association with University of Ottawa,
Canada and the Indian Institute of
Management, Ahmedabad. Mr. Mukherjee
joined Ispat Karmet in 1996 from Ispat
Mexicana where he was Managing Director.
He joined Ispat Europe as President
and CEO in June of 1999. Formerly the
President and Chief Operating Officer
of Ispat International N.V., Mr. Mukherjee
became Chief Operating Officer of
Mittal Steel in October 2004. Mr.
Mukherjee is a recipient of the MECON
Award from the Indian Institute of Metals.
Gonzalo Urquijo, Member of the Group
Management Board, Responsible
for Long Products, Distribution and
Wire Drawing
Gonzalo Urquijo, previously Senior
Executive Vice President and Chief
Financial Officer of Arcelor, was responsible
for Finance, Purchasing, IT, Legal
Affairs, Investor Relations, Arcelor Steel
Solutions and Services, and other activities.
Mr. Urquijo also held several other
positions within Arcelor and in this sector,
including Deputy Senior Executive Vice
President and Head of the functional
directorates of distribution. Until the
creation of Arcelor in 2002, when he
became Executive Vice President of
the Operational Unit South of the Flat
Carbon Steel sector, Mr. Urquijo was CFO
of Aceralia. Between 1984 and 1992,
he held a variety of positions at Citibank
and Crédit Agricole before joining Aristrain
in 1992 as CFO and later becoming
Co-Chief Executive Officer. Mr. Urquijo
graduated in Economics and Political
Science from Yale University and holds
an MBA from the Instituto de Empresa
in Madrid.
Michel Wurth, Member of the Group
Management Board, Responsible
for Flat Products Europe, Global Auto,
Plates and R&D
Michel Wurth was previously Vice President
of the Group Management Board and
Deputy CEO of Arcelor, and was responsible
for Flat Carbon Steel Europe and Auto,
Flat Carbon Steel Brazil, Coordination
Brazil, Coordination Heavy Plate, R&D
and NSC Alliance. The merger of Aceralia,
Arbed and Usinor leading to the creation
of Arcelor in 2002 saw Mr. Wurth appointed
as Senior Executive Vice President and
CFO of Arcelor, with responsibility over
Finance and Management by Objectives.
Mr. Wurth joined Arbed in 1979 and held
a variety of positions, including Secretary
of the Board of Directors, Head of the
Arbed subsidiary Novar and Corporate
Secretary, before joining the Arbed Group
Management Board and becoming Chief
Financial Officer in 1996. He was named
Executive Vice President in 1998.
Mr. Wurth holds a Law degree from the
University of Grenoble, a Political Science
degree from the Institut d’Etudes Politiques
de Grenoble and a Master of Economics
from the London School of Economics.
Management Committee
All GMB members also sit on a strong Management Committee,
active since early September 2006 and responsible for regional
or sectoral organisations and Group-level functions such as Purchasing,
Marketing and Performance Enhancement. The new structure is both
lean and flat. It aims to create an organisation that is at once inventive
and adaptable, with clear accountability at every level. Above all,
it aims to foster an entrepreneurial spirit that will keep ArcelorMittal
ahead of its competitors.
Bhikam Agarwal
Executive Vice President,
Responsible for Financial Controlling
and Reporting
Alain Bouchard
Responsible for Purchasing Function
on Worldwide Basis
Bhikam Agarwal has been the Managing
Director, Controlling of Mittal Steel
and has over 30 years of experience
in steel and related industries. He has
held various senior executive positions
within Mittal Steel and was previously
Chief Financial Officer after its formation
at Ispat International. He has been
responsible for the financial strategy
of Mittal Steel and has been a coordinator
of its prior activities in the capital markets.
Mr. Agarwal has also led the finance and
accounting functions of Ispat International
across all its operating subsidiaries.
Alain Bouchard has been Arcelor’s
Executive Vice President Purchasing
since 2004. Prior to that, he was in
charge, at Arcelor and Usinor, of the
Cockerill-Sambre works in Liège (Belgium)
and at Sollac Lorraine. From 1993
to 1999, he held various positions
in production planning, customer services,
information systems-information technology,
and reengineering of support functions
within Usinor’s Flat Carbon Steel
business in Paris. From 1989 to 1993,
he worked at Usinor’s Fos-sur-Mer plant,
after joining the IRSID Steel Research
and Development Institute in 1973.
Mr. Bouchard is an IT engineer, a graduate
of the Ecole Nationale Supérieure
d’Informatique et Mathématiques
Appliquées de Grenoble, and a Physics
engineer, with a degree from Ecole
Nationale Supérieure de Physique
de Grenoble.
Roeland Baan
Responsible for South and Central Africa
and Pipes and Tubes
Roeland Baan has been Chief Executive
Officer of Mittal Steel Europe. He joined
Mittal Steel from the global conglomerate
SHV Holdings, which lists metals
recycling among its non-core activities.
There he spent eight years as a member
of the Energy Divisions Executive
Committee and was responsible for
developing and executing its strategy across
a number of key regions, including Europe,
South America and the Mediterranean
rim. Prior to that, Mr. Baan spent 16 years
with Shell, where he held a number
of positions worldwide. He has a Master’s
degree in Economics from Vrije Universiteit
in Amsterdam.
José Armando Campos
Responsible for Flat South America
Davinder Chugh
Senior Executive Vice President,
Responsible for Shared Services
José Armando Campos was the President
and officer in charge of the Flat Steel
Business Area at Arcelor Brasil and
President and CEO of CST since 1997.
Prior to that, he worked in mining
development and metallurgical areas
at the Companhia Vale do Rio Doce
from 1974 to 1992. Mr. Campos
has been a member of the Brazilian
Metallurgy and Materials Society since
1972 and the Board of Directors of
the Brazilian Business Council for
Sustainable Development. Mr. Campos
is also a member of the Board of Directors
of Acesita. He is a Mining Engineer,
with a degree from the Federal University
of Ouro Preto.
Davinder Chugh, previously CEO of Mittal
Steel South Africa, has over 25 years
experience in the steel industry, particularly
in materials purchasing, logistics,
warehousing and shipping. Mr. Chugh
also was Commercial Director at Mittal
Steel from 2002 to 2006. Before joining
Mittal Steel South Africa, he was Vice
President of purchasing at Mittal Steel
Europe. Mr. Chugh has been with the
company since 1995 and successfully
integrated the materials management
functions at newly acquired plants in
Hamburg, Duisburg, France, Romania
and Algeria. Prior to this, he held several
senior positions at the Steel Authority
India Limited in New Delhi, India. He holds
Degrees in Science and Law and has a
Master’s degree in Business Administration.
Narendra Chaudhary
Responsible for Carbon Steel Asia,
Mediterranean, Black Sea Basin
and Balkans
Narendra Chaudhary was appointed
CEO of Mittal Steel’s Ukrainian operation
in January 2006. Prior to that,
Mr. Chaudhary was Director, Operations
and Maintenance for Mittal Steel. Mr.
Chaudhary joined Mittal Steel in 1993
at its Mexican operations and has held
a number of positions at Mittal Steel since
then, including as CEO of Mittal Steel
Galati in Romania and CEO of Mittal Steel’s
operations in Kazakhstan. Mr. Chaudhary
possesses over 39 years of experience
in a variety of technical and managerial
functions in the steel industry. He worked
at Steel Authority of India Limited
plants in various capacities for 28 years.
Mr. Chaudhary has a Bachelor’s degree
in Engineering from Bihar Institute
of Technology, India.
Christophe Cornier
Responsible for Flat Europe
Christophe Cornier has been responsible
for Arcelor’s Flat Products activities in
Europe and for its worldwide automotive
sector since December 2005, when he
was appointed member of the Arcelor’s
Management Committee. In June 2005,
he was appointed Head of Arcelor’s Client
Value Team. At the creation of Arcelor
in 2002, he was named Executive Vice
President of FCS Commercial Auto. Before
that, he was CEO of Sollac Méditerranée.
In 1998, he was appointed CEO of La
Magona, after joining Sollac Packaging
as Managing Director in 1993. In 1985
he joined Usinor, where he was Business
Development Director and Chief Controller
of Sollac. He began his career within the
French Ministry of Industry, which he left as
a Deputy Director. Mr. Cornier is a graduate
of the Ecole Polytechnique and the Ecole
des Mines, in Paris.
Philippe Darmayan
Responsible for ArcelorMittal Steel Solutions
and Services (AM3S)
Philippe Darmayan has been Executive
Vice President in charge of Arcelor Steel
Solutions and Services (A3S) since
January 2005. Before that, he was
CEO of Ugine & ALZ. A graduate of French
business school HEC, Philippe Darmayan
joined Arcelor to lead the transformation
of Ugine & ALZ in 2002. Before,
he held various management positions
in the aluminium businesses of Pechiney
Group, which he joined in 1996, and
was a plant Director and Managing
Director of Franco-Belge de Fabrication de
Combustibles, a subsidiary of Framatome.
Bernard Fontana
Responsible for Human Resources
Bernard Fontana joined Arcelor as Senior
Vice President of Human Resources,
Flat Products Europe in 2004. A graduate
of Ecole Polytechnique, one of France’s
leading engineering schools, he was hired
by French chemical group SNPE in 1986,
where he managed various production sites
and business units as well as its North
American branch, eventually becoming
deputy CEO. With the merger of ArcelorMittal
in 2006, he was appointed as Executive
Vice President of Global Automotive
business, which he successfully led. He
has taken over the responsibility of Human
Resources in June 2007.
Management Committee
continued
Jean-Yves Gilet
Responsible for Stainless Steel Worldwide
Sudhir Maheshwari
Responsible for Finance and M&A
Carlo Panunzi
Responsible for Long Americas
Gerhard Renz
Responsible for Long Europe
Lou Schorsch
Responsible for Flat Americas
André van den Bossche
Responsible for Marketing
Jean-Yves Gilet has been advisor to
the CEO with responsibility for Arcelor’s
Stainless Steel business worldwide
since December 2005, in charge
of preparing and implementing the
strategic reorganisation of this business.
Prior to that, he was Senior Executive
Vice President of Arcelor, in charge
of the Stainless Steel Sector, a position
he held since the creation of Arcelor
in 2002. In 1999, he became a member
of the Usinor executive committee.
In 1998, he was named Chairman and
CEO of Acesita in Brazil. He joined Usinor
in 1990 and, between 1991 and 1998,
he held management positions at Imphy,
Ugine-Savoie and Sprint Métal Stainless
businesses. Prior to that, he was Cabinet
Head for the Regional Development
and Minister in France. Mr. Gilet,
an engineering graduate of the Ecole
Polytechnique (Corps des Mines),
began his career in 1981 at the Industry
Ministry, before joining DATAR, the regional
development agency.
Sudhir Maheshwari was previously the
Managing Director, Business Development
and Treasury of Mittal Steel and has
20 years of experience in steel and related
industries. He was the Chief Financial
Officer of LNM Holdings from January
2002, until its merger with Ispat
International in December 2004. He has
played an integral role in all the recent
acquisitions by Mittal Steel, including
turnaround and integration activities,
and in various corporate finance
and capital market projects, including
the initial public offering in 1997.
He also held the positions of Chief Financial
Officer at Mittal Steel Europe, Mittal Steel
Germany and Mittal Steel Point Lisas,
and was Director of Finance and
Mergers and Acquisitions at Mittal Steel.
Mr. Maheshwari has worked for Mittal
Steel for 18 years. Mr. Maheshwari
is an Honours Graduate in Accounting
and Commerce from St Xavier’s College,
Calcutta and a Fellow Member of the
Institute of Chartered Accountants and the
Institute of Company Secretaries in India.
Carlo Panunzi was previously Senior
Executive Vice President of Arcelor
Brasil, in charge of Long Products
and Distribution. In 2002, Carlo
Panunzi became the President of Belgo
Mineira, a company he had joined
in 1999 and where he was, among other
positions, Managing Director
of the Piracicaba plant in the State
of São Paulo. Before that, he held
several positions at Arbed, which he
joined in 1973 as an engineer at the
Differdange plant’s rolling line.
Gerhard Renz has been the
Chief Operating Officer of Mittal Steel
Europe and has over 32 years
of experience in the steel industry.
Mr. Renz formerly worked as the
Managing Director of Mittal Steel
Hamburg. He is a Board Member
of Verein Deutscher Eisenhüttenleute,
Wirtschaftsvereinigung Stahl and
the European Iron and Steel Institute.
He holds a Bachelor’s degree
in Engineering.
Lou Schorsch was elected in August
2006 as President and Chief Executive
Officer of Flat Americas. Previously,
he had been Chief Executive Officer of
Mittal Steel USA since the merger between
Mittal Steel and ISG in October 2004.
Prior to that, Dr. Schorsch was the
President and Chief Executive Officer
of Ispat Inland where he was responsible
for significant improvements in its
operational performance. Dr. Schorsch
has over 25 years of experience in
consulting and managerial roles primarily
relating to the steel industry. Prior to joining
Ispat Inland in October 2003, he held
various senior positions in the consulting
and e-commerce sectors. Most recently,
he was President and Chief Executive
Officer of GSX.Com and Principal at
McKinsey & Company, where he worked
from 1985 until 2000. While at McKinsey,
he was a co-leader of its metals
practice. Dr. Schorsch has published
numerous articles in such publications
as Business Week and Challenge and
has also co-authored a book on steel
entitled “Upheaval in a Basic Industry”.
André van den Bossche has been
Arcelor’s Executive Vice President
Commercial Worldwide Optimisation since
2005. Prior to that, he was Managing
Director of Arcelor’s Flat Carbon Steel
commercial organisation from 2002
to 2005, Managing Director at the
Aceralia Sidstahl Ibérica and Sidstahl
sales organisations, from 1995 to 2001,
and Sales Director at TradeArbed
Luxembourg from 1986 to 1995.
At Sidmar (Ghent), which he joined
in 1970, he was Vice President of the
Commercial and Customer Relations
Department, General Manager of the
cold rolling mill and production and
management engineer at the cold rolling
mill. Mr. van den Bossche is a civil
engineer graduated from the Universities
of Louvain and Ghent.
Michael Pfitzner
Responsible for Commercial Coordination
Michael Pfitzner joined Mittal Steel as
Director of Marketing in February 2006.
He has over 25 years of extensive industry
experience in commercial functions
with several steel companies namely
Mannesmann, Saarstahl, ThyssenKrupp
Stainless and Salzgitter. At Salzgitter,
where he worked for nearly 5 years,
Mr. Pfitzner was a member of the
Executive Board responsible for Sales
and Distribution. Mr. Pfitzner has
a degree in Economics from the University
of Bonn, Germany.
Michael G. Rippey
Responsible for USA
Michael Rippey was elected in August
2006 as President and Chief Executive
Officer of Mittal Steel USA. Previously,
he had been the Mittal Steel’s Executive
Vice President, Sales and Marketing, since
April 2005, with direct responsibility for
all sales and marketing of light flat-rolled
and plate products. Mr. Rippey had been
Executive Vice President, Commercial,
and Chief Financial Officer at Ispat Inland,
since January 2004 and an Officer
of Mittal Steel USA since June 1998.
He has a Bachelor’s degree in Marketing
from Indiana University, Bloomington;
a Master’s degree in Banking and Finance
from Loyola University, Chicago; and
a Master of Business Administration from
the University of Chicago.
Bill Scotting
Responsible for Performance Enhancement
Bill Scotting joined Mittal Steel
in September 2002 to lead its
Performance Enhancement activities.
Formerly an Associate Principal at McKinsey
& Company, Mr. Scotting has 20 years
of experience in the steel industry
in technical, operations management
and consulting roles. He has also held
positions at BHP Steel, Pioneer Concrete
(UK), Mascott Partnership and CRU
International. Mr. Scotting holds a Bachelor
of Science (Metallurgy) degree from
the University of Newcastle in Australia,
where he was awarded the Australasian
Institute of Metallurgy Prize for Metallurgy,
and an MBA (with distinction) from Warwick
Business School in the United Kingdom.
Corporate Governance – Board Practices
The following summarises aspects of
Mittal Steel’s Board Practices and corporate
governance practices more generally.
Board of Directors, Group Management
Board and Management Committee
of Mittal Steel
Mittal Steel / Arcelor Memorandum
of Understanding
The Memorandum of Understanding
provides that each of Mittal Steel,
Arcelor and ArcelorMittal will be governed
by a “Board of Directors”and a
“Management Board”, subsequently
renamed “Group Management Board”.
Mittal Steel, the Significant shareholder
and Arcelor entered into a Memorandum
of Understanding on 25 June 2006
(the “Memorandum of Understanding”
or “MOU”), on the basis of which Arcelor’s
Board of Directors recommended Mittal
Steel’s offer for Arcelor and pursuant
to which, among other things, the parties
agreed on certain corporate governance
matters relating to the combined group.
In particular, the Memorandum of
Understanding includes certain special
governance mechanisms designed to
promote the integration of Mittal Steel
and Arcelor during an initial three-year
transitional period beginning as from
1 August 2006, which period is referred
to herein as the Initial Term. Mittal
Steel and Arcelor agreed to change and
unify their respective corporate governance
structures and rules until Mittal Steel
is merged into Arcelor in accordance with
the MOU, following which the surviving
entity, which will be the parent company
of the group, will be renamed. It is
currently expected that the surviving entity
will be renamed “ArcelorMittal”, and this
name is used in the summary herein.
Since the implementation of the
Memorandum of Understanding, Mittal
Steel has been governed by a Board of
Directors and a Group Management Board.
Until Mittal Steel is merged into Arcelor,
the composition and operation of each
of Mittal Steel’s and Arcelor’s Board of
Directors, Group Management Board and
Management Committee will be identical.
further provides that during the Initial
Term, the Board of Directors of each
of Arcelor, Mittal Steel and ArcelorMittal will
have the following characteristics:
• Each initial Board of Directors would
be composed of 18 non-executive
members, the majority of whom
would be independent.
• Six members would be nominated
by Mittal Steel, three of whom would
be independent.
• Six members would be from the
(then-existing) Arcelor Board of Directors.
• Three members would be from
the (then-existing) Arcelor Board
of Directors representing then-existing
Arcelor major shareholders.
• An additional three members would
be employee representatives.
In addition, during the Initial Term,
the Board of Directors will appoint one
director as Chairman and one director
as President of the Board of Directors.
Mr. Joseph J. Kinsch is currently the
Chairman of the Board of Directors
of Arcelor, while Mr. Lakshmi N. Mittal
is currently the President of the Board
of Directors and CEO of Arcelor. Following
the merger of Mittal Steel into Arcelor,
Mr. Kinsch shall be the Chairman of the
Board of Directors of ArcelorMittal and Mr.
Mittal shall be the President of the Board
of Directors and CEO of ArcelorMittal.
In addition, the Memorandum of
Understanding provides that upon the
retirement of Mr. Joseph Kinsch, Mr.
Lakshmi N. Mittal would become the
Chairman of ArcelorMittal and Mr. Joseph
Kinsch would propose the successor
President, who shall be an independent
director or a former employee of Arcelor.
The proposed successor President will
serve as President for so long as he
or she is a director and the Significant
shareholder has agreed to vote for his
or her renewal as a director, except in case
of gross negligence or willful misconduct
in the exercise of his or her functions
as director or in the event that the
Appointments, Remuneration and Corporate
Governance Committee vetoes his or her
nomination. Moreover, upon retirement,
death or incapacity of Mr. Lakshmi N.
Mittal, he shall be replaced by any other
representative designated by the Significant
shareholder from time to time.
On 5 November 2006, Mr. Roland Junck
resigned as Chief Executive Officer
of Mittal Steel in the interest of Mittal Steel
and its stakeholders. Mr. Junck
has since remained a member of the Group
Management Board. On the same date,
Mr. Lakshmi N. Mittal was appointed
a member of the Group Management Board
and Chief Executive Officer of Mittal Steel
and Mr. Mittal resigned as a member
of the Appointments, Remuneration and
Corporate Governance Committee.
Mr. Mittal has remained as Chairman
of the Board of Directors. Effective the
same date, Mr. Sergio Silva de Freitas was
appointed by the Board of Directors as Mr.
Mittal’s successor on the Appointments,
Remuneration and Corporate Governance
Committee. The proposal to appoint
Mr. Mittal as Chief Executive Officer
of Mittal Steel and Arcelor was unanimously
approved by the Boards of Directors
of Mittal Steel and Arcelor. As a
consequence, the Board of Directors has
one “executive” director, instead
of being composed exclusively of
“non-executive” directors. The General
Meeting of Shareholders of Mittal Steel
will be asked to ratify this appointment
at the first General Meeting of Shareholders
to be held in 2007.
The Board of Directors is in charge
of the overall management of Mittal
Steel. The Board of Directors is currently
comprised of 17 “non-executive” directors
and one “executive” director. The Chairman
and Chief Executive Officer of Mittal Steel,
Mr. Lakshmi N. Mittal, is the sole
“executive” director.
provides that the directors will be elected
and removed by the General Meeting
of Shareholders, by a simple majority
of votes cast. Except as specifically
described below, no shareholder will have
special rights to nominate, elect or remove
directors. All directors will be elected
by the General Meeting of Shareholders
for three-year terms. Following the Initial
Term, and subject to the provisions
of ArcelorMittal’s Articles of Association,
the Significant shareholder will be entitled
to representation on ArcelorMittal’s
Board of Directors in proportion to
its shareholding.
The Group Management Board is entrusted
with the day-to-day management of Mittal
Steel. Mr. Lakshmi N. Mittal, the Chief
Executive Officer, is the Chairman of the
Group Management Board. The members
of the Group Management Board are
appointed and dismissed by the Board
of Directors. As the Group Management
Board is not a corporate body created
by Dutch law or Mittal Steel’s Articles
of Association, the Group Management
Board exercises only the authority granted
to it by the Board of Directors. Any
references in Mittal Steel’s Articles of
Association to the “managing board”
are references to its Board of Directors.
In establishing Mittal Steel’s strategic
direction and corporate policies, Mr.
Lakshmi N. Mittal is supported by members
of our senior management, who have
substantial professional and worldwide steel
industry experience. Some of the members
of our senior management team are also
members of the Group Management Board.
The Group Management Board is assisted
by a Management Committee comprised
of the members of the Group Management
Board and 20 other senior executives.
The Management Committee discusses
and prepares group decisions on matters
of group-wide importance, integrates
the geographical dimension of the Group,
ensures in-depth discussions with Mittal
Steel’s operational and resources leaders
and shares information about the situation
of the Group and its markets.
Operation of the Board of Directors
The required quorum for meetings of the
Board of Directors is a majority of the
directors, including at least the Chairman,
the President and a majority of the
independent directors being present or
represented.
Each director has one vote and no director
has a casting vote. Decisions of the
Board of Directors are made by a majority
of the directors present and represented
at a quorate meeting, except as otherwise
required by Dutch law.
During the Initial Term, the agenda
of each meeting of the Board of Directors
will be jointly agreed by the Chairman
and the President of the Board of Directors
and will include any matters proposed
to be included on the agenda jointly by the
Chairman and the President. In the event
of a disagreement, the Chairman and the
President will work together to try to resolve
any such disagreement. After the expiration
of the Initial Term, the Chairman and
the President will use their reasonable
best efforts to agree on the agenda.
Director Independence
Thirteen of the 18 members of the Board
of Directors are independent. A director
is considered to be “independent”
if (a) he or she is independent within the
meaning of the Listed Company Manual
of the New York Stock Exchange, Inc.,
which is referred to as the Listed Company
Manual, as it may be amended from time
to time, or any successor provision, subject
to the exemptions available for foreign
private issuers with respect to the director
independence requirements under the
Listed Company Manual, and (b) he or she
is unaffiliated with any shareholder owning
or controlling more than two percent of the
total issued share capital of Mittal Steel.
For these purposes, a person is deemed
affiliated to a shareholder if he or she is an
executive officer, a director who also is an
employee, a general partner, or a managing
member of such shareholder.
Separate Meeting of
Non-executive Directors
The non-executive members of the Board
of Directors schedule meetings without
the presence of management. There is
no minimum number of meetings that the
non-executive directors must hold per year.
During 2006, the non-executive directors
of Mittal Steel held three meetings separate
from the executive director(s). The presiding
independent director at each of these
meetings was chosen at the meeting.
Communications with the
Board of Directors
Pursuant to a process adopted by the
Board of Directors, a shareholder or any
other person may send communications
directly to the Board of Directors through
Mittal Steel’s website at http://www.
mittalsteel.com/dynamic/dynamicdefault.
asp?id=questionable.
Significant Shareholder Right
of Opposition and Right of Board
Representation
provides that during the Initial Term,
with respect to Board of Directors’
decisions that require shareholders
approval, the Significant shareholder
will vote in accordance with the position
expressed by the Board of Directors, unless
the Significant shareholder opposes any
such position, in which case the Significant
shareholder can vote as it wishes, subject
to the following requirements. During
the Initial Term, if Mr. Lakshmi N. Mittal
opposes any decision of the Board
of Directors on a matter that does not
require shareholders approval and that was
not proposed by him, Mr. Lakshmi N. Mittal
will have the right to request that such
action first be approved by a shareholders’
meeting, and the Significant shareholder
will have the right to vote at such meeting
as it sees fit. The Board of Directors will
not approve any action that has been
rejected by such shareholders’ meeting.
further provides that during the Initial Term,
and subject to the Significant shareholder
owning or controlling at least 15% of the
outstanding share capital of Mittal Steel
or ArcelorMittal, the Significant shareholder
is entitled to elect to Mittal Steel’s or
ArcelorMittal’s Board of Directors, as the
case may be, up to (and not more than)
six directors, including three directors
who are affiliated (directly or indirectly)
with the Significant shareholder and three
independent directors. Following the Initial
Term, and subject to the provisions
of Mittal Steel’s or ArcelorMittal’s Articles
of Association, as the case may be, the
Significant shareholder will be entitled
to representation on Mittal Steel’s or
ArcelorMittal’s Board of Directors, as
the case may be, in proportion to its
shareholding.
Board of Directors’ Committees
Following the implementation
of the Memorandum of Understanding,
the Board of Directors has two
committees: an Audit Committee
and an Appointments, Remuneration
and Corporate Governance Committee.
Corporate Governance – Board Practices
continued
The Appointments, Remuneration and
Corporate Governance Committee
is required to meet at least twice a year.
Its two predecessors, the Mittal Steel
Nomination Committee and the Mittal
Steel Remuneration Committee,
were also required to meet twice
a year. During 2006, each of these three
committees met three times.
Governance Following the Initial Term
Audit Committee
The Audit Committee is composed
of four independent directors, with
independence defined as set out above
and also in Rule 10A-3 under the Exchange
Act. The members are appointed by the
Board of Directors. The Audit Committee
makes decisions by a simple majority
with no member having a casting vote.
The primary function of the Audit
Committee is to assist the Board
of Directors in fulfilling its oversight
responsibilities by reviewing:
• the financial reports and other financial
information provided by Mittal Steel
to any governmental body or the public;
• Mittal Steel’s system of internal control
regarding finance, accounting, legal
compliance and ethics that the Board
of Directors and members of
management have established; and
• Mittal Steel’s auditing, accounting and
financial reporting processes generally.
The Audit Committee’s primary duties and
responsibilities are to:
• serve as an independent and objective
party to monitor Mittal Steel’s financial
reporting process and internal controls
system;
• review and appraise the audit efforts of
Mittal Steel’s independent accountants
and internal auditing department;
• provide an open avenue of
communication among the independent
accountants, financial and senior
management, the internal auditing
department and the Board of Directors;
• approve the appointment and fees of the
independent auditors; and
• monitor the independence of the
external auditors.
The current members of the Audit
Committee are: Messrs. Narayanan Vaghul,
José Rámon Álvarez-Rendueles, Wilbur L.
Ross and Edmond Pachura, all of whom are
independent under Mittal Steel’s Corporate
Governance guidelines, the NYSE standards
and the Dutch Corporate Governance Code.
The Chairman of the Audit Committee is
Mr. Vaghul, who has significant experience
and financial expertise. Mr. Vaghul is the
Chairman of ICICI Bank, a company that is
listed on the NYSE and the Mumbai Stock
Exchange. Mr. Álvarez-Rendueles, as former
Governor of the Bank of España and former
President of the Bank Zaragozano, also
has significant experience and financial
expertise. Both Mr. Ross and Mr. Pachura
have considerable experience in managing
companies’ affairs.
The charter of the Audit Committee is
available at http://www.mittalsteel.com/
Investor+Relations/Corporate+Governance.
The Audit Committee is required to meet
at least four times a year. During 2006,
the Audit Committee met nine times,
five of which were physical meetings
and four of which were meetings held
by teleconference.
Appointments, Remuneration and
Corporate Governance Committee
Until 30 October 2006, the Board of
Directors had a Nomination Committee
and a Remuneration Committee. As of
30 October 2006, these two committees
have been replaced by the Appointments,
Committee.
Corporate Governance Committee is
comprised of four directors, all of whom are
independent, as were all directors in the
two predecessor committees. The members
are appointed by the Board of Directors.
Corporate Governance Committee makes
decisions by a simple majority with no
member having a casting vote.
The Board of Directors has established the
Governance Committee to:
• determine on its behalf and on behalf
of the shareholders within agreed terms
of reference Mittal Steel’s framework
of remuneration and compensation,
including stock options for the
Chief Executive Officer and the Chief
Financial Officer of Mittal Steel, the
members of the Group Management
Board and the members of the
Management Committee;
• consider any appointment or
reappointment to the Board of Directors
at the request of the Board of Directors;
• provide advice and recommendations
to the Board of Directors on such
appointment; and
• develop, monitor and review corporate
governance principles applicable to
Mittal Steel.
Corporate Governance Committee’s
principal responsibility in compensating
executives is to encourage and reward
performance that will lead to long-term
enhancement of shareholder value.
Corporate Governance Committee will,
at the request of the Board of Directors,
consider any appointment or reappointment
to the Board of Directors. It will provide
advice and recommendations to the Board
of Directors on such appointment. The
Governance Committee is also responsible
for developing, monitoring and reviewing
Corporate Governance principles applicable
to Mittal Steel.
The current members of the Appointments,
Committee are: Messrs. Joseph Kinsch,
Sergio Silva de Freitas, Lewis Kaden
and Jean-Pierre Hansen, all of whom are
independent under Mittal Steel’s Corporate
Governance guidelines, the NYSE standards
as well as the Dutch Corporate Governance
Code. The Chairman of the Appointments,
Committee is Mr. Kaden.
The charter of the Appointments,
Remuneration and Corporate
Governance Committee is available
at http:/ /www.mittalsteel.comInvestor+
Relations/Corporate+Governance.
provides that upon expiration of the Initial
Term, the parties to the MOU will review
ArcelorMittal’s corporate governance rules
described above in order to reflect the
best standards of corporate governance for
comparable companies and, in particular,
have them conform with the corporate
governance aspects of the NYSE listing
standards applied to non-US companies
and the applicable Luxembourg corporate
governance code or similar document.
The Chairman and the President shall consult
in the year prior to the end of the Initial Term
with a view to determining the identity of the
directors that could be recommended to the
Governance Committee.
Dutch and US Corporate Governance
In June 2001, Mittal Steel adopted
corporate governance guidelines in line with
best practices on corporate governance.
Mittal Steel has since continued to
monitor diligently new, proposed and
final US and Dutch corporate regulatory
requirements, and it will make adjustments
to its corporate governance controls and
procedures to stay in compliance with
these requirements on a timely basis.
Mittal Steel is committed to meeting the
corporate governance and requirements
under applicable current and proposed
SEC and New York Stock Exchange listing
standards and the laws of The Netherlands.
The Dutch Corporate Governance Code
was published on 9 December 2003.
During the Mittal Steel Annual General
Meeting of Shareholders held on 5 May
2004, the implications of the Dutch
Corporate Governance Code were
discussed with its shareholders and
certain proposed changes to Mittal Steel’s
Articles of Association to bring them
in line with the requirements of the
Dutch Corporate Governance Code were
approved by the shareholders.
Finally, Mittal Steel’s General Meeting
of Shareholders, in which the Significant
Shareholder can determine the outcome
of votes, also approved one deviation from
the Dutch Corporate Governance Code,
i.e., the separation of the posts of
Chairman and Chief Executive Officer, as it
approved that Mr. Lakshmi N. Mittal could
remain Mittal Steel’s Chairman and Chief
Executive Officer. Because this deviation
was approved by the General Meeting of
Shareholders, Mittal Steel is in compliance
with the Dutch Corporate Governance Code
and the relevant provisions of Book
2 of the Dutch Civil Code.
At the Mittal Steel Annual General Meeting
of Shareholders held on 26 May 2005,
the shareholders approved an amendment
to Mittal Steel’s Articles of Association
stipulating a clear division of responsibility
for setting a remuneration policy for the
Board of Directors and individual members
of the Board of Directors between the
Board of Directors, the Remuneration
Committee (since then replaced by the
Governance Committee, as described
above) and shareholders. In addition,
the Mittal Steel Articles of Association were
updated to reflect changes in Dutch law.
Each year the Board of Directors will
submit for approval by the General Meeting
of Shareholders a proposal regarding
the arrangements for the remuneration
in the form of shares or rights to acquire
shares. The proposal will at least set out
the maximum number of shares or rights
to subscribe for shares to be granted to
the members of the Board of Directors
and the applicable criteria for such grant
or for any change thereto. A lack of
approval by the general meeting
of shareholders of such proposal will not
affect the representative authority of the
Board of Directors in connection with
the grant of rights to subscribe for shares.
In accordance with the Dutch Corporate
Governance Code, non-executive members
of the Board of Directors will not receive
any share options, and no options have
been awarded after 2002.
Finally, on 30 June 2006, the General
Meeting of Shareholders of Mittal Steel
resolved to amend Mittal Steel’s Articles
of Association to eliminate all differences
between the rights attached to Mittal
Steel’s class A common shares and class
B common shares (except for the right
of the holders of the class B common
shares to convert their class B common
shares on a share-per-share basis into
class A common shares). Following the
implementation of the amendment,
which took effect on 7 September 2006,
all shareholders hold shares carrying
the same voting and economic rights;
each share one vote, irrespective of the
time it has been held. As a result of
the amendment, the holders of class B
common shares no longer have the right
to make a binding nomination for the
appointment of directors to the Board
of Directors. All directors are elected
by the General Meeting of Shareholders
to serve three-year terms by a simple
majority of the votes cast.
Process for Handling Complaints
about Accounting Matters
As part of the procedures of the
Board of Directors for handling
complaints or concerns about Mittal
Steel’s financial accounting, internal
controls and auditing issues, Mittal
Steel’s Code of Business Conduct
encourages all employees to bring such
issues to the Audit Committee’s attention.
Concerns relating to such issues
may be communicated through the
Mittal Steel website at http://www.
mittalsteel.com/dynamic/dynamicdefault.
asp?id=questionable.
During 2006, employees reported
no complaints of this nature.
Internal Assurance
Mittal Steel has an Internal Assurance
function. Until 19 December 2006,
the function was solely the responsibility
of the Director Internal Assurance,
who reported to the Audit Committee.
Since 19 December 2006, the
Director-Internal Assurance of Mittal Steel
was made jointly responsible for the
function along with the Head of Internal
Audit at Arcelor. The function is staffed
by full time professional staff located
at each of the principal operating
subsidiaries and at the corporate level.
Recommendations and matters relating
to internal control and processes are
made by the Internal Assurance function,
and their implementation is regularly
reviewed by the Audit Committee.
Independent recognised public
accounting firm Independence
The appointment and determination
of fees of the independent recognised
public accounting firm is the direct
responsibility of the Audit Committee.
The Audit Committee is further responsible
for obtaining annually a written statement
from the independent recognised
public accounting firms that their
independence has not been impaired.
The Audit Committee has also obtained
a confirmation from the principal
independent recognised public accounting
firm that none of its former employees
is in a position with Mittal Steel that may
impair the principal independent recognised
public accounting firm’s independence.
Ethics and Conflict of Interest
Ethics and conflicts of interest are governed
by Mittal Steel’s Code of Business Conduct.
The Code of Business Conduct sets out
standards for ethical behaviour that are to
be followed by all employees and directors
of Mittal Steel in the discharge of their
duties. They must always act in the
best interests of Mittal Steel and must
avoid any situation in which their personal
interests conflict, or could conflict,
with their obligations to Mittal Steel.
As employees, they must not acquire any
financial or other interest in any business
or participate in any activity that could
deprive Mittal Steel of the time or
the attention needed to devote to the
performance their duties. Any behaviour
that deviates from the Code of Business
Conduct is to be reported to the employee’s
supervisor, a member of the management,
the head of the legal department
or the head of the internal audit/internal
assurance department. The Code
of Business Conduct is available at http://
www.mittalsteel.com/Investor+Relations/
Corporate+Governance.
Technology and Innovation
Research and Development plays a key role in Arcelor
Mittal’s strategy to lead innovation in the world of steel.
The Group employs 1,200 researchers in 13 research
centres around the world. In 2006, US$185 million was
spent on research. Two-thirds of this amount was focused
on the development of new products and solutions for
the Group’s customers.
The Research and Development
taskforce set up 14 working groups
to integrate the two companies’
impressive R&D capabilities – each
one co-headed by a Mittal Steel
and an Arcelor researcher. They
covered the full spectrum of process
and product research.
Where the R&D budget was allocated:
Flat Carbon: 81%
Stainless Steel: 7%
Long Carbon: 6%
Plates: 5%
Others: 1%
The merger has added a new dimension
to the R&D effort by widening the range
of potential applications for existing
technical know-how and permitting
the better use of this expanded R&D
resource in order to accelerate project
work. In 2006, a number of cooperation
projects were initiated between the Arcelor
and Mittal Steel R&D teams throughout
the world. One example: in the automotive
field, hot stamping steel is now being
produced in the US while martensitic steel
- used in key safety-critical applications is being transferred to Europe.
Process R&D
In 2006, process research focused on:
• The development of models for
optimising the use of raw materials
and energy;
• The modelling of the Group’s processes
from raw materials to finished products
to improve industrial performance;
• Improved recycling of by-products such
as sludge, dust and steel slag. Special
attention is being paid to the recovery
of expensive zinc;
• The use of ground tyres as a carbon
additive in electric furnaces. Now
validated, the process makes the electric
furnace an even cleaner production
process than before;
• The start of the second phase of the
ULCOS (Ultra Low CO2 Steelmaking)
programme. Co-financed by the
European Union and the 48 partners
engaged in the programme, ULCOS
is aimed at finding new production
processes that drastically reduce
emissions of CO2 and other greenhouse
gases. Five technologies were selected
for Phase II experimentation.
Automotive R&D
Integration Quick Wins in R&D
The automotive industry constantly seeks
to reduce cost, improve passive safety,
reduce vehicle weight and increase
durability through even better corrosion
resistance. The combined efforts of
ArcelorMittal have achieved a number
of advances in these areas:
The Research and Development taskforce
set up 14 working groups to integrate the
two companies’ impressive R&D capabilities
– each one co-headed by a Mittal Steel
and an Arcelor researcher. They covered
the full spectrum of process and product
research. About 20 “quick wins” have
already been identified, the following four
of which are particularly significant:
• The range of high strength and high
deformability steel has been improved
and extended – through, for instance,
Dual Phase, TRIP (Transformation
Induced Plasticity), and hot stamping
steel. Major research has been carried
out on new metallurgical concepts,
carbon steel and stainless steel, making
it possible to consider marketing steel
– in the short and medium term –
with very high elasticity and plasticity,
and capable of the very high energy
absorptions necessary for crash test
qualification.
• In the field of corrosion resistance, the
first tests of ultra high surface quality
zinc coating by hot galvanizing for use on
visible parts have aroused considerable
customer interest.
• In the field of mufflers, Ugine & Alz
has worked to develop F18 MNb, a
new type of stainless steel providing
better resistance to oxidation at high
temperatures, necessary as a result of
increased exhaust gas temperatures.
F18 MNb facilitates good catalysis.
• In long products, new steel for
truck crankshafts and valve springs
have been developed, with high
mechanical properties and improved
fatigue resistance, in order to
increase performance and achieve
a lighter weight.
Further R&D is focused on industrial
applications – most notably flat carbon
steel, electrical steel, special plates
and stainless steel – and construction
and civil engineering.
• Production of Usibor, an Arcelor
development for hot stamping which
offers top-of-range strength-to-weight
characteristics and corrosion resistance,
is to commence in the US following
trials early last year. Usibor has a
number of applications in the automotive
field – particularly for bumper and door
beams, A-pillars and B-pillars.
• Production of martensitic grades
developed by Mittal Steel in Chicago,
deployed by the auto industry in key
safety-critical applications such as roll
bars, will commence in Europe this year.
• Outifo software developed in Europe
to optimise the design of stamping
tools – reducing the need for
customers to engage in long and costly
test cycles – is being implemented
in the US. The software gives a
competitive advantage if they use
ArcelorMittal materials.
• Process improvements designed by the
former Arcelor process facilities are being
transferred to former Mittal Steel plants.
They include, for instance, processes
to reduce clogging in the continuous
caster – thereby improving quality and
delivering performance.
Integration Review
As the two leading consolidators in the global steel industry,
both Arcelor and Mittal Steel came to the merger with strong track records
of successful integration. Each was the product of a series of international
mergers and acquisitions that presented challenging organisational
and cultural issues. As a result of that common history, each had a group
of professionals highly experienced at integrating diverse businesses
and delivering anticipated merger gains.
Drawing on this experience, it was
agreed from the outset that speed was
of the essence in achieving a successful
integration. An ambitious timetable
was set for putting a new organisational
structure in place, unifying key functional
areas, and driving the process that would
capture the targeted synergies by the
end of year three. Quick wins were sought
that would make an immediate impact.
Some 80% of the integration process
was planned to be completed by the
middle of 2007 – when the integration
effort would largely be incorporated
into daily business.
All GMB members also sit on
a Management Committee of Executive
Vice Presidents, active since early
September 2006 and responsible for
regional or sectoral organisations and
Group-level functions such as purchasing,
marketing and Performance Enhancement.
Below that committee are just three
more tiers of management. The majority
of appointments down to Manager
level were announced by early-December.
Care was taken to ensure a balance
of appointments from the two
predecessor companies, whilst respecting
a “best of both” principle.
Organisation
The new structure is both lean and flat.
It is designed to avoid top-heavy
bureaucracies or functional ‘silos’
and deliver a clear line of sight in the
decision-making process. It aims to create
an organisation that is at once inventive
and adaptable, with clear accountability
at every level. Above all, it aims to foster
an entrepreneurial spirit that will keep
ArcelorMittal ahead of its competitors.
The new management structure was
put in place over the summer and autumn
of 2006 and is designed to create an
organisation that combines scale with
agility. At the very top is an 18-member
Board of Directors responsible for the
overall supervision of the company.
The majority of its members are
independent. There are three shareholder
representatives and three employee
representatives. The Board
is truly international in character.
The strategic direction of the business
is the responsibility of a six-strong Group
Management Board (GMB), members
appointed by the Board of Directors –
and which started to work together in early
August 2006. Headed by Lakshmi Mittal,
who assumes the role of Chief Executive,
its composition reflects the Group’s
new structure, which is divided into five
key segments.
Integration Process
An Integration Office was established
in September 2006 under co-heads
drawn from each predecessor company.
Supported by a strong team of managers
within the business segments, the
Integration Office assembled 20 taskforces
– which in turn ran 30 sub-taskforces –
to drive integration in each area.
With every business segment given
a target for the synergies it was expected
to achieve, the taskforces had the job
of confirming those targets ‘bottom up’,
work out where the opportunities lay,
propose concrete actions and put plans
in place to capture them.
The integration process is guided
by four simple principles:
• V
alue creation. The purpose is
to optimise ArcelorMittal, not individual
businesses. A mix of initiatives is
bringing both short-term cash gains and
fundamental multi-year improvements.
• Simplicity. Integration is part of daily
life, with line management accountable
for delivering the expected impact
– thereby fostering entrepreneurship
across the organisation. Synergies
and stand-alone improvement plans
have quickly been incorporated in
2007 budgets.
• Fast, yet sustainable. The integration
decision-making process runs in
parallel with ‘business as usual’.
Four core functions – budgeting/control,
capital expenditure planning, operational
control and human resources –
were integrated as quickly as possible
to ensure immediate and total control
of the ongoing business.
• Best of both. A forward-looking
organisational design has been
implemented with the best person
appointed for each job, irrespective
of passport, but with attention to
balance between the two companies.
The process has been transparent
and open, with full data sharing.
Similarly, best of both has been
applied in designing key management
processes.
Integration Review
continued
Throughout the process, the role
of the Integration Office has been
to coordinate, challenge and support
the taskforces (injecting urgency into
the process), provide a quality check
on their work and report back to the GMB.
It has also worked closely with Internal
Communications to ensure the progress
of the integration and Group aspirations
are communicated fully throughout the
organisation. An Intranet site, opened
in November 2006, was quickly followed
with a Web TV launch in January 2007.
Both have received excellent feedback.
The Integration Office has achieved
its goals and was wound down at
the end of March 2007, one quarter
ahead of the original schedule.
At the end of 2006, approximately
75% of the targeted US$1.6 billion
of synergies are now covered by action
plans. Taskforces and operational units
are finalising milestones and plans for
the remainder. The organisational structure
is in place and HR policies are being
finalised and implemented. The new
ArcelorMittal brand was unveiled in the
second quarter of 2007. Most taskforces
have merged back into the business
segments from which their members came,
though some – such as purchasing –
will have a continuing role for some
time to come.
Synergies
The planned merger synergies, worth
an annualised US$1.6 billion, are targeted
in three main areas: marketing and trading,
purchasing, and manufacturing and
process optimisation. In the final quarter
of 2006, merger-related synergies worth
an annualised US$269 million were
secured, mainly in the area of marketing
and trading. By the end of the first
quarter of 2007, the total of annualised
synergies reached US$573 million.
In addition to marketing and trading
synergies, it included some purchasing
benefits and the first gains from
manufacturing and process optimisation.
Rapid progress is being made in every area:
• Marketing and Trading. Brazilian
and Mexican slab sales are now
coordinated to provide one face to the
customer. Similarly, in Long Products,
on a continental basis, there is a
unified commercial organisation offering
harmonised pricing and a better service
to customers; logistics have been
transformed by switching sourcing
to the plant closest to the customer
wherever possible. Trading and
international sales have been
consolidated into ArcelorMittal
International, which now operates
a unified sales network with four
regional hubs.
In Global Automotive and Flat Carbon
Europe, organisational changes
to deliver ‘one face to the customer’
have improved market dynamics
and the recognition of value provided
by the Group. The transfer of key
technologies between Europe and the
US is allowing both regions to enhance
the range of advanced automotive
steel grades they offer.
• Purchasing. Merger synergies are
expected to have a significant impact
from the second quarter of 2007,
as supplier renegotiations and the
effects of global sourcing start to flow.
Increased intra-Group sourcing is already
delivering benefits. One example:
ArcelorMittal Steel Solutions and
Services is sourcing substantial tonnages
from the Group’s Eastern European
plants that were previously sourced
from third parties.
• Manufacturing and process optimisation.
Material benefits are expected
to start flowing in the second half
of 2007 as several factors combine.
The benchmarking of all plants and
processes, combined with the systematic
sharing of best practices, is having
a progressive impact on productivity
and efficiency. Plants with similar product
or process characteristics have been
‘twinned’ to ensure the rapid transfer
of best practices through the exchange
of experiences.
Plans to optimise plant output –
by refocusing production to specialise
on a given product area, thus achieving
the longest possible production
runs and avoiding duplicated investment
spending – are expected to have
an increasingly beneficial impact
from 2008 onwards. Specialisation
has already taken effect in the area
of slab manufacturing.
The integration process is on schedule
and set to deliver the anticipated synergy
gains within the forecasted time-frame.
US
$1.6
billion
annualised worth of planned merger synergies by 2008.
Environment
For ArcelorMittal, continuous improvement in its environmental
performance is a key element in its commitment towards
Sustainable Development. In order to achieve this, the company
has put in place a management system to take care of ArcelorMittal’s
impact on the environment, so as to ensure that environmental
aspects comply with legislation, monitor performance and develop
more environmentally-friendly methods of production.
The Group Environment Directorate
works closely in collaboration with the
regional production facilities to ensure
a consistent and coordinated approach
to ArcelorMittal environmental
performance across all operations.
In 2006, focus during the integration
phase has been on:
• Coordinating environmental
reporting and analysis;
• Implementing common policies
and action plans;
• Providing environmental framework
and guidance to production facilities;
• Supporting environmental
compliance activities; and
• Undertaking benchmarking
and trend analysis.
Investment
In 2006, more than US$120 million
was invested in environmental projects
around the Group, many of which
are ongoing. Examples include:
• In South Africa, the Vanderbiljpark
facility implemented a central wastewater
treatment resulting in a zero discharge
operation and drastically reducing the
fresh water intake by 60%.
• ArcelorMittal USA launched a
windmill farm project at a former steel
production facility in Lackawana,
New York. The first phase will involve
the erection of eight 2.5MW windmills
for a production capacity of around
57,000 MWh/y.
• In France, a flue gas flow treatment
at the sinter plant in Fos sur Mer was
successfully implemented. The process
reduces dust, sulphur dioxide (SO2)
and dioxins emissions.
• In Spain, the facilities in Olaberria,
Zumárraga and Bergara focused on
reducing their non-recovered residues.
The Electric Arc Furnace (EAF) slag
had previously been sent to landfill.
Joint work with the administration was
developed to change the standards for
use of EAF slag in road construction
and investment was made in a unique
slag treatment plant for the three
facilities for slag preparation for use
in road construction. This will be
operational in 2007 and will result
in a substantial reduction in
non-recovered residues.
Many of these investments and process
efficiencies have resulted in ArcelorMittal’s
production facilities receiving recognition
for their environmental performance.
Examples include:
• ArcelorMittal Gent, Belgium was awarded
the Environmental Charter
of East Flanders granted to companies
who demonstrate a continuous
improvement of their environmental
performance, compliance with legislation
being a prerequisite to be candidate.
• ACB in Bizkaia, Spain was one
of 12 companies nominated for the
European Business Awards for the
Environment. The prize, awarded
by the European Commission every
two years, acknowledges companies
for outstanding contributions
to sustainable development.
• The creation of an e-based
information exchange tool which
will provide up-to-date information
to environmental managers across
global operations on Environmental
legal framework; measurements;
best process techniques; cleaner
production; Biodiversity and studies.
Raising standards
Group operations comply with local
and legal regulatory requirements
and every effort is made to anticipate
new legislation by investing ahead
of its implementation. Any breaches
are recorded diligently and dealt with
promptly. Many operations are accredited
to ISO 14001 and ArcelorMittal is
committed to achieving 100% certification
of all production facilities. To deliver
this commitment, the Group has issued
mandatory application of ISO 14001
certification for all production facilities.
The Group is currently reworking the
compliance verification procedure building
on the strengths of the Arcelor and Mittal
Steel approaches. Going forward,
this compliance methodology will be
integrated into the global environmental
database that is currently being developed
to capture Group-wide data on air
emissions, water quality, CO2 and residues.
In March 2007, environmental managers
from all regional operations met as part
of ArcelorMittal’s internal Knowledge
Management Programme (KMP).
The focus was on drafting a Group-wide
Environment policy to be published later
in the year and the development
of key environmental objectives.
A process of identifying projects and experts
to boost Clean Development Mechanism /
Joint Implementation initiatives
through the Group was started in 2006
and common development strategy and
guidelines are now being established.
In addition, the second phase of the
Ultra Low CO2 Steelmaking (ULCOS)
programme has started. Co-financed
by the European Union and the 48 partners
engaged in the programme, ULCOS
aims at finding new production processes
that drastically reduce emissions
of CO2 and other greenhouse gases.
Five technologies have been selected
for the Phase II experimentation.
During 2006, ArcelorMittal has been
actively engaging in developing mechanisms
to ensure knowledge sharing across
the Group. A number of working groups
have been set up to ensure managers
are exposed to and transfer, current best
practice approaches. Examples include:
• A monitoring campaign focusing on
diffuse dust was initiated in 2006 in
order to quantify building diffuse dust
emissions in sinter plants, blast furnaces
and steelmaking plants. The objective
of the campaign is to improve the
knowledge on diffuse dust emissions and
to move facilities to take these emissions
into account in their progress plans.
In 2006 measurements were
made in Imphy, Bremen, Monlevade,
Acindar and Juiz de Fora.
• A biodiversity working group was created
to build on the best practice work of
many of our Brazilian and Western
European facilities. The objectives are
to better understand the ArcelorMittal
contribution and impact on biodiversity,
to compile a database on biodiversity,
and to recommend a Group-wide
response to the findings.
The importance of raising awareness
on environmental issues extends beyond
the production facilities and in 2006,
ArcelorMittal announced its US$2
million sponsorship of the China
Environmental Awareness Programme
(CEAP), launched 18 December in Beijing
by the United Nations Development
Programme (UNDP) and the Chinese
government. One of the programmes
in the partnership will contribute to the
provision of capacity building in
Clean Development Mechanism (CDM)
initiatives in 12 provinces in China,
as part of the implementation of the
Millennium Development Goals (MDG).
The three-year campaign will raise
awareness about environmental issues
through media campaigns built around
high-profile national events such
as the 2008 Beijing Olympics and
the Shanghai Expo in 2010.
2007 Priorities
Moving into 2007, ArcelorMittal
will continue to focus on completion
of the 2006 priority areas and
in addition will focus on:
• Ensuring all ArcelorMittal
production facilities are anticipating
and responding to upcoming
environmental legislation most
effectively. A Group-wide legislation
watch including Europe, USA and
China will be implemented
to make sure local issues and
initiatives are handled appropriately and
supported by knowledge of the most
environmentally efficient governments;
• Developing a Group-wide
communication strategy to handle
local issues and needs in regard
to regulations, process techniques,
measurements, cleaner production;
• Analysing the performance
results from environmental reporting
to detect potential improvement
opportunities and conduct
benchmarking and trend analysis.
Communities – ArcelorMittal Foundation
For ArcelorMittal, communities are essential to delivering its business strategy.
Acting responsibly does not simply mean donating goods and services,
or time, to specific projects – although this is happening everywhere the Group
operates. It also implies that ArcelorMittal has a wider interest and commitment
to ensure that the communities in which it operates prosper.
In the last quarter 2006, ArcelorMittal
decided to create a Foundation to show
the Group’s commitment to sustainability
in the local communities where it has
a presence. This Foundation would only
be formally incorporated in 2007.
Social Investment
During 2006, ArcelorMittal business
segments continued to engage in a wide
range of social investment initiatives,
providing extensive support in education,
healthcare, sports, enterprise and
cultural activities.
In 2006, ArcelorMittal contributed
US$47 million in charitable contributions,
sponsorship and to social investment
projects. An additional US$2.6 million
was contributed in the form of
in-kind contributions – products
and employee-time.
Examples of social investment
in 2006 include:
• In Brazil, an ambitious target set
in 2004 to register 250,000 people
as bone marrow donors was not
only met, but exceeded in 2006.
By the end of the year, the number
of donors registered topped 334,000.
Many thousands of people at the
Group’s Belgo, Vega do Sul and Acesita
plants are among those who have
volunteered in the last two-and-a-half
years. The Group’s support for bone
marrow transplant programmes goes
back to 1988. It has since contributed
to the development of stem cell donor
registers in France, Spain, Italy,
Belgium and Luxembourg.
• In the US, the Cleveland Ohio plant
(among others) played a large role
in the local community. Financial help
for a variety of causes –from the
United Way to Harvest for Hunger –
was supported by countless hours
of voluntary work by employees.
Other projects ranged from supporting
the Boys and Girls Clubs of Cleveland
(through a combination of money and
employee volunteering) to improving the
Cuyahoga River Valley environment.
• In China, the first set of scholarships
was granted in May 2006 under
a new scholarship programme for
students at Hunan Province’s Central
South University. The scholarships,
aimed at promoting creativity and
innovation, support 80 scholars a year
in undergraduate and post-graduate
programmes and a further 40 engaged
in doctoral and post-doctoral research.
• In Kazakhstan, extensive and broad
ranging social investment continued
in 2006, this included the donation
of 40 ambulances to the Karaganda
Ambulance Centre and sponsorship
of a wide range of sports and cultural
events for the City of Temirtau.
• In Europe, ArcelorMittal continued
its support for a range of locally driven
initiatives. This included support given
to sports and youth development
initiatives in Spain; funding of medical
equipment in the Czech Republic
and development of an educational
multi-media language laboratory
in Poland.
In 2006, ArcelorMittal contributed
US$47 million in charitable
contributions, sponsorship
and to social investment projects.
An additional US$2.6 million
was contributed in the form
of in-kind contributions – products
and employee-time.
Corporate Social Responsibility
Sustainable Steel means building a stable global institution with the resources
to deliver the products that customers want, while respecting the needs
of the communities in which ArcelorMittal operates. The challenge and
opportunity during the integration phase has been to identify the strengths,
best practices and areas for improvement in order to fulfill ArcelorMittal’s
commitment to Sustainable Development.
ArcelorMittal has grown rapidly over recent
years by acquiring steelmaking operations
around the world and has inherited a
wide range of values, principles and
management approaches to addressing
sustainability challenges. The challenge and
opportunity during the integration phase
has been to identify the strengths, best
practices and areas for improvement in
order to fulfill ArcelorMittal’s commitment
to Sustainable Development - including
the management of health, safety and
environmental issues, as well as those
areas covered by the developing Group CSR
strategy.
Given the company’s diversity, focus in
2006 has been on:
• Benchmarking global and regional
performance in CSR;
• Understanding the challenges and
initiatives of country operations;
• Responding to key stakeholders such as
Socially Responsible Investment (SRI)
Funds regarding the impacts of the
ArcelorMittal merger; and
• Developing a Group framework (strategy,
policies, standards and tools) to promote
the consistent treatment of Sustainable
Development throughout the company.
Even as ArcelorMittal develops its Group
Sustainable Development framework,
the country and regional operations have
demonstrated a continuing commitment
to social and environmental responsibility
within the communities in which the Group
operates. This commitment takes the
form of stakeholder engagement efforts,
community partnerships and community
development programmes.
Moving into 2007, activities at both Group
and country levels will be emphasised. For
the Group, the key elements of the Group
Sustainable Development framework will be
completed and reported on performance
by the end of 2007. ArcelorMittal will also
continue to respond to its key stakeholders,
in particular to gather feedback as
the company moves forward with this
framework. The Group will also continue
to support and develop programmes and
partnerships in its country operations.
To accomplish this, the investment placed
in communities through operations must
be conducted in a manner that is also
sensitive to the economic well-being of
those communities, the sustainability of
the resources used and the integral role of
ArcelorMittal’s products in society.
2006 Highlights
During the year, priority areas have
progressed:
• Completion of a 2006 CSR Country Level
Risk and Opportunity Register to better
understand the social challenges faced
by the communities and the company;
• Provision of a Group-wide environmental
framework and guidance to facilities;
• Assessment of sponsorship and social
investment activities across all business
units to inform the strategy of the newly
formed ArcelorMittal Foundation;
• Coordination of Group-wide
environmental reporting and analysis;
• Development and roll-out of a framework
to assess the organisational structures
in place in all regions to address CSR
impacts;
Evolving Sustainable
Development Framework
In a global Group such as ArcelorMittal, it
is the responsibility of the Group to provide
a consistent framework within which the
various country and regional operations can
continue to provide social and economic
benefit to the communities in which
they operate. Therefore, a Sustainable
Development framework is evolving and it
will provide consistent standards and values
in the form of tools and knowledge sharing,
whilst allowing operations to determine
what is most important in their own
communities. In 2006, this evolution has
centred on policy development, standards
development and the introduction of key
mechanisms to improve performance.
Policy Development
During 2006, ArcelorMittal has sought to
evolve the CSR policies and commitments
of Arcelor and Mittal Steel by integrating
best practice aspects from both to form an
ArcelorMittal CSR policy. This will address
the broad scope of CSR activities within
ArcelorMittal and will align with the Health
and Safety, Environment and Human
Resources policies. Together, these policies
will underpin the delivery of the Sustainable
Development strategy.
Following feedback from senior
management and regional business units, a
consultation exercise will be undertaken to
gauge stakeholder views on these policies.
We will also seek to align the ArcelorMittal
CSR policy to external international
voluntary standards and frameworks, such
as the United Nation Global Compact and
ILO (International Labour Organisation) as
appropriate. The ArcelorMittal Policy will be
published later in the year.
A CSR department has been created at
Group level to implement the strategy. A
member of the ArcelorMittal Board has
been assigned overall responsibility for
Sustainable Development. In addition,
a Vice President (VP) for Sustainable
Development has been appointed.
Reporting directly to the ArcelorMittal
Board, the VP will work closely with a newly
formed CSR committee which has been set
up with members of senior management to
oversee the strategic issues and decisions
in relation to this area.
Standards Development
To measure its success, ArcelorMittal has
developed a unique internal benchmarking
system designed to drive improvement in
CSR throughout the company. The system
assesses policies; forward planning;
allocation of responsibilities; internal
communication; external communication;
management systems and auditing. During
2006, it has been benchmarked through
many of ArcelorMittal global operations in
order to create a robust methodology that
is applicable across the range of socioeconomic conditions.
The benchmarking system has enabled
ArcelorMittal to measure the quality of
management processes and to build
an inventory of significant risks and
opportunities across the business.
Given the diverse history and economic
settings of ArcelorMittal operations, a
wide spectrum of performance exists and
appropriate goals are now being agreed to
drive improvement. In order to meet these
goals, consistent standards for responsible
practices will be established across the
business for each of the seven aspects
(policies, forward planning, allocation of
responsibilities, internal communication,
external communication, management
systems and auditing).
Introducing Key Mechanisms
to Improve Performance
The final focus of the evolving Sustainable
Development framework has been
developing specific mechanisms to improve
performance. Primarily, ArcelorMittal
has been actively engaged in developing
support tools that can be used at sites
covering various CSR aspects, as well as
building a community of CSR champions
across the business. Both will be crucial in
ensuring sufficient organisational capacity
to deliver a successful CSR programme.
We are also actively working towards
disclosure of comprehensive company
information on the company’s social and
environmental performance. Achieving this
goal will always be challenging in a complex
corporate environment – and doubly so
in ArcelorMittal, given its pace of growth.
In October 2006, the new Group started
to review the key performance indicators
and targets used across all departments
from both Arcelor and Mittal Steel. An
integrated team is currently developing
a road map for reporting by setting up
data collection streams across the Group
to gauge performance at a site level,
setting non-financial (economic, social
and environmental) targets and measuring
performance against these. ArcelorMittal
will publish a report later in the year on the
company’s non-financial performance and
Sustainable Development commitments.
Stakeholders – Dialogue, Engagement
and Partnership
Building and maintaining trust amongst the
many and varied stakeholder groups relies
upon action rather than words and much
of the detailed work is rightly led from
within country operations. Therefore, it is no
surprise that even as the Group Sustainable
Development Framework is being built,
the country operations have demonstrated
significant commitment to responsible
behaviour within their own communities.
Each site manager is responsible for
engaging with their local stakeholders
and partners, both internal and external.
ArcelorMittal also recognises that a multistakeholder approach offers the best hope
of increasing capacity to pre-empt, manage
and mitigate global risks.
Throughout 2006, engagement at sites
have been characterised by a wide range of
positive activities and initiatives. Examples
include:
• ArcelorMittal South Africa held regular
meetings with Municipal Authorities in
order to understand the needs of local
communities and will be building on
this by proactively setting up forums for
consultation with local communities,
even where no specific concerns have
been identified.
• ArcelorMittal Brasil continued its
systematic approach to stakeholder
dialogue through their Stakeholder
Engagement Programme, which has
included a mapping of key stakeholder’s
views to ensure that these are fed into
the business decision-making processes
on strategy and future projects.
At the Group level, these regional
engagement programmes are being built by
integrating the learning and best practice
elements into the Group Sustainable
Development Framework, which will include
a systematic assessment of stakeholders’
expectations around non-financial impacts.
The outcome of which will include a list
of material issues and areas of concern
for each stakeholder. Going forward,
ArcelorMittal will look to establish
systematic stakeholder dialogue at all levels
of the company to inform the development
of the ArcelorMittal strategy, policies and
public disclosure.
During 2006, the Group also implemented
many projects in partnership with
institutions and non-governmental
organisations (NGOs). Examples include:
• In Algeria, the company is working with
an environmental NGO, Association for
Protection of Environment and Fight
against Pollution (ANPEP) on several
projects in the Annaba area. These
have focused on increasing the green
belt around the plant and a local river
cleanup.
• In Brazil, the Environmental
Communication Programme (PCA) is
a long term partnership initiative with
primary, secondary and higher education
institutions in Great Vitória. Since
1997, the programme has focused
on improving environmental education
and awareness of sustainability to
students, teachers and educators. The
activities are developed in-line with
school curricula and include workshops;
guided visits to the plant and educational
vegetable gardens.
These types of projects will be increasingly
evaluated and pursued in a more strategic
manner. Moving forward, ArcelorMittal
will emphasise country partnerships that
match both the needs of the community
and society as well as the values of
ArcelorMittal.
2007 Sustainable
Development Priorities
Moving into 2007, ArcelorMittal has
established the following priorities in
Sustainable Development:
• Continue to support and develop
responsible social and environmental
practices within our country operations;
• Draft CSR policies and integrate these
with the existing Health and Safety,
Environment and Human Resources
Policies to develop the Sustainable
Development Policy Series;
• Continue to develop specific
mechanisms, tools and communication
networks to enhance the sharing of best
practice and to improve performance;
• Identify the Group’s top ten sustainability
issues and use these to agree and draft
the Sustainable Development strategy in
line with the overall business strategy;
• Continue to focus on communication
with key stakeholders such as
Socially Responsible Investment (SRI)
Funds whilst expanding stakeholder
engagement practices at Group and
country levels;
• Publicly report on Sustainable
Development performance by the end of
the year;
Develop more responsive products that
address the needs of current and future
society.
Shipment Breakdown
Shipment breakdown by segment
Shipment breakdown by segment and region
2005
Flat Carbon Europe
AACIS
Stainless
Total*
28,259
30,709
23,141
18,680
2,074
102,863
Sources : ArcelorMittal estimates.
* Figures exclude shipments from AM3S which are fully eliminated on consolidation.
Shipment breakdown by region
1
5
4
2
3
2006
%
1. North America
2. South America
3. Europe
4. Africa
5. Asia, CIS and others
Total
28,045
10,793
51,357
8,401
11,908
110,504
25%
10%
46%
8%
11%
100%
Shipment breakdown by product
3 4
1
1. Flat Products
2. Long Products
3. Pipes and Tubes
4. Stainless
Total
2
2006 %
71,410
35,605
1,262
2,227
110,504
65%
32%
1%
2%
100%
2006
29,960
33,111
24,897
20,309
2,227
110,504
2005
2006
North America
South America
Flat Carbon America
23,889
4,370
28,259
24,808
5,152
29,960
Flat Carbon Europe
30,709
33,111
North America
3,216
South America
4,523
Europe
15,402
23,141
Africa
7,988
Asia, CIS and others
10,692
AACIS
18,680
South America
649
Europe
1,425
Stainless
2,074
Total*
102,863
* Figures exclude shipments from AM3S which are fully eliminated on consolidation.
3,237
4,948
16,712
24,897
8,401
11,908
20,309
693
1,534
2,227
110,504
Production Breakdown
Mining Operations
Crude steel production by process and segment 2006
ArcelorMittal’s portfolio of mining assets geographically diversified
for reduced risk and close to steel plant to maximise synergies.
Basic Oxygen Furnace
Open Hearth Furnace
Total Crude Steel
27,042
36,493
7,102
15,353
548
86,538
4,479
2,002
17,519
3,501
2,042
29,543
–
–
–
1,900
–
1,900
31,521
38,495
24,621
20,754
2,590
117,981
Flat Carbon Europe
AACIS
Stainless Total
Canada Iron Ore
Production 15.3 Mt
Resources 1,421 Mt
Algeria Iron Ore
Production 1.9 Mt
Resources 133 Mt
Bosnia Iron Ore
Production 1.5 Mt
Resources 62 Mt
USA Iron Ore*
Production 5.3 Mt
Resources 365 Mt
Senegal Iron Ore***
Resources 750 Mt
Ukraine Iron Ore
Production 9.7 Mt
Resources 1,858 Mt
USA Iron Ore*
Production 2.9 Mt
Resources 170 Mt
Kazakhstan
Iron Ore
Production 4.9 Mt
Resources 2,613 Mt
USA Iron Ore**
Production 11.2 Mt
Crude steel production process breakdown
3 1
2
1. Basic Oxygen Furnace 2. Electric Arc Furnace 3. Open Hearth Furnace Total 2006
86,538
29,543
1,900
117,981
%
73%
25%
2%
100%
Mexico Iron Ore*
Production 2.9 Mt
Resources 330 Mt
Liberia Iron Ore***
Resources 1,454 Mt
Brazil Iron Ore**
Production 1.4 Mt
Resources 426 Mt
South Africa
Iron Ore**
Production 8.5 Mt
* Share of production.
** Strategic contract.
*** Under development.
Existing Mines
Existing Mines with expansion project
New projects
Iron Ore Production Facilities
Raw Material Self Sufficiency
Raw material production and consumption
Resources 2
(in millions of metric tonnes)
2006 Availability 3
(in millions of metric tonnes)
Kazakhstan
Lisakovski
Open Pit
Concentrate
100.00%
1,889
Kentube
Open Pit
Concentrate
100.00%
111
Atasu
Underground
Lump and Fines
100.00%
576
Atansore
Open Pit
Lump and Fines
100.00%
38
4.9
1.4
1.2
1.1
1.3
Mine
Type
Control 1
Product
Ukraine
Kryviy Rih
Open Pit
Kryviy Rih
Underground
Algeria Ouenza
Boukhadra
Mexico Pena 4
Sicartsa Canada QCM
Wabush 4
Lump and Fines
Lump and Fines
Open Pit
Open Pit
Lump and Fines
Lump and Fines
Open Pit
Open Pit
Pellets
Concentrate
Open Pit
Open Pit
USA Hibbing 4
Minorca
Open Pit
Open Pit
USA Cleveland Cliffs 5
Open Pit
South Africa 6 Sishen
Thabazambi
Open Pit
Open Pit
Brazil Andrade Open Pit
Concentrate and Pellets
Pellets
Pellets
Pellets
Control indicates shareholding stake owned by the
Group and/or long term agreements whereby iron
ore is available to the Group at cost plus basis
(unrelated to the market).
2
Unaudited mineral resource: measured and
indicated; Figures exclude Liberia (1,454M Mt)
and Senegal (750M Mt).
70.00%
83
70.00%
50
1.9
1.5
0.4
51.00%
6
51.00%
56
1.5
1.5
NA
60%
50.00%
90
100.00%
240
2.9
2.1
0.9
30%
100.00%
1,383
28.60%
38
15.3
14.1
1.2
62.30%
365
100.00%
170
8.2
5.3
2.9
4
11.2
NA
NA
8.5
5.8
2.6
426 1.4
CVRD
Concentrate, lumps, fine or pellet equivalent.
Includes own share of production and resources
wherever mines are owned or on shared basis.
5
Long term supply contract with Cleveland Cliff –
prices are formula based.
6
Long term agreement – prices on cost plus basis.
3
NA
Kumba
Kumba
Lump and Fines
142 53 37 39 10
9.7
7.8
1.9
Cleveland Cliffs
Lump and Fines
Lump and Fines
Consumption Iron Ore* Coal **
Coke
Scrap ***
DRI
1,835
23
Pellets
Total including strategic contracts
93.77%
93.77%
Open Pit
Open Pit / Underground
Bosnia Omarska
Buvac
1
Concentrate
Lump
65.5
Total production / generation
64 5
28 14 10
Raw material self sufficiency
100%
100%
90%
80%
70%
76%
50%
40%
45%
36%
20%
10%
9%
0
Iron Ore*
Coal**
Coke
Scrap***
* Assuming full production of iron ore at Dofasco for captive use; excluding Sicartsa mines production.
** Coal denoted only for steelmaking process and excludes steam coal for power generation.
*** Scrap excludes DRI, which the Company produces for internal consumption and in replacement of scrap.
DRI
External purchase
78
48
9
25
-
Number of Employees
Key Financial and Operational Information
Number of employees by segment (end of period, full time equivalent)
Pro forma key financial and operational information 2006
Segment
2005
2006
Flat Carbon Americas*
Flat Carbon Europe
AACIS Stainless
AM3S Others**
Total 37,829
72,948
41,325
154,101
13,679
11,055
3,322
334,259
36,700
67,238
40,893
148,291
11,542
11,560
3,354
319,578
Source: ArcelorMittal Estimates.
* Includes Dofasco.
** Includes corporate offices.
Number of employees by geographical location (end of period, full time equivalent)
7
Group
1
6
2
5
4
Source: ArcelorMittal Estimates.
3
1. EU 15 2. Rest EU (EU25) 3. Other European Countries 4. North America 5. South America 6. East Asia 7. Africa Total
2006
%
74,459
36,894
80,769
36,651
20,932
50,152
19,721
319,578
23
12
25
11
7
16
6
100
Amounts in billions of US dollars
unless otherwise stated
Financial Information
Sales
Depreciation
Operating income
Operating margin (as a percentage of sales) EBITDA
EBITDA margin (as a percentage of sales)
Capital expenditure
Operational Information
Crude Steel Production (millions of metric tonnes)
Steel Shipments (millions of metric tonnes)
Employees (000’s)
·
·
·
·
·
Flat Carbon
Americas
Flat Carbon
Europe
Long Carbon
Americas and Europe
21.9
1.0
2.6
11.9%
3.6
16.4%
-1.6
27.6
1.0
2.8
10.2%
3.9
14.0%
-1.3
18.5
0.6
3.0
16.1%
3.6
19.2%
-0.9
31.5
30.0
36.7
AACIS
14.7
0.5
2.6
17.9%
3.1
21.0%
-0.6
38.5
33.1
67.2
Stainless 24.6
24.9
40.9
7.3
0.2
0.7
10.1%
0.9
12.9%
-0.2
20.8
20.3
148.3
AM3S
11.9
0.1
0.5
3.9%
0.6
4.7%
-0.1
2.6
2.2
11.5
14.3
11.6
EBITDA is operating income plus depreciation.
Crude steel production is a combination of crude steel at the former Arcelor units and liquid steel at former Mittal Steel units.
Some inter segment sales and intra segment have not been eliminated.
Some intercompany shipments are not eliminated.
AM3S shipments are not consolidated.
Pro forma key financial and operational information 2005
Amounts in billions of US dollars
unless otherwise stated
Financial Information
Sales
Depreciation
Operating income
Operating margin (as a percentage of sales) EBITDA
EBITDA margin (as a percentage of sales)
Capital expenditure
Operational Information
Crude Steel Production (millions of metric tonnes)
Steel Shipments (millions of metric tonnes)
Employees (000’s)
·
·
·
·
·
Flat Carbon
Americas
Flat Carbon
Europe
Long Carbon
Americas and Europe
20.9
1.0
2.7
12.7%
3.6
17.4%
-1.5
24.9
1.0
3.2
12.7%
4.2
16.7%
-1.0
16.6
0.6
2.0
12.3%
2.6
15.6%
-0.6
Stainless 12.4
0.4
2.8
22.9%
3.2
25.9%
-0.6
AM3S
6
0.2
0.4
7.1%
0.6
9.9%
-0.3
10.8
0.1
0.3
2.9%
0.4
3.8%
-0.1
31.0
28.3
37.8
AACIS
36.2
30.7
72.9
22.8
23.1
41.3
EBITDA is operating income plus depreciation.
Crude steel production is a combination of crude steel at the former Arcelor units and liquid steel at former Mittal Steel units.
Some inter segment sales and intra segment have not been eliminated.
AM3S shipments are not consolidated.
20.1
18.7
154.1
2.3
2.1
13.7
13.7
11.1
Main Industrial Assets
Main Industrial Assets
A highly flexible and efficient industrial network
Plants, Property and Equipment
BOF
EAF
Stainless
ArcelorMittal’s principal operating subsidiaries are grouped into six segments, and has production facilities
in twenty-six countries in North and South America, Europe, Asia and Africa.
All of its operating subsidiaries are substantially owned by ArcelorMittal through intermediate holding companies.
Production facilities
Facility
Coke Plant
Sinter Plant
Blast Furnace
Basic Oxygen Furnace (including Tandem Furnace)
DRI Plant
Continuous Caster – Bloom / Billet
Breakdown Mill (Blooming / Slabbing Mill)
Billet Rolling Mill
Section / Bar / Rail Mill
Wire Rod Mill
Continuous Caster – Slabs
Hot Rolling Mill
Pickling Line
Tandem Mill
Annealing Line
Skin Pass Mill
Hot Dip Galvanizing Line
Electro Galvanizing Line
Tinplate Mill
Tin Free Steel (TFS)
Color Coating Line
Plate Mill
Seamless Pipes
Welded Pipes
1
2
Number of facilities
Capacity (in millions of tonnes per year) Production in 2006 (in millions of tonnes)1 / 2
63
36
64
71
14
55
41
8
6
52
22
55
37
58
41
54
42
62
15
17
1
17
9
6
7
35.6
106.9
104.6
111.3
11.8
40.2
35.1
17.0
8.5
23.3
14.0
96.1
90.0
53.1
42.3
20.2
23.7
20.9
2.6
4.6
0.5
2.6
6.7
1.1
0.7
31.1
93.0
85.0
89.8
9.4
31.9
26.1
9.8
3.0
18.8
11.5
79.3
67.8
35.3
31.1
12.7
14.5
16.6
1.9
3.1
0.2
1.9
5.0
0.7
0.5
roduction facility details include the production numbers for each step in the steelmaking process. Output from one step in the process is used as input
P
in the next step in the process. Hence, the summation of production numbers does not equal the quantity of saleable finished steel products.
2006 production figures are based on annual production as if acquisitions had occurred on January 1, 2006.
Flat Carbon Americas facilities
Flat Carbon Americas – Plants, property and equipment
ArcelorMittal’s Flat Carbon Americas segment has production facilities in both North and South America, including the United States,
Canada, Brazil and Mexico. The following two tables set forth a general description of ArcelorMittal’s principal production locations
and production units in the Flat Carbon Americas segment:
Production locations
Unit
Dofasco
Sidbec
Lackawanna
Riverdale, Indiana
Harbor, Burns Harbor
Cleveland
I/N Tek and I/N Kote
Hennepin
Columbus Weirton
Coatesville
Conshohocken
Sparrows Point
Cleveland
Warren
Columbus Coatings
Hennepin
IH
I/N Tek and I/N Kote
Riverdale
Burns Harbor
Coatesville
Conshohocken
Lackawanna
Weirton
Sparrows Point
Gary Plate
Double G
Lázaro Cárdenas
CST
Vega do Sul
Dofasco
Country
Locations
Type of plant
Products
USA
USA
USA
USA
USA
USA
USA
USA
USA
USA
USA
USA
USA
USA
USA
Mexico
Brazil
Brazil
Canada
Cleveland, OH
Warren, OH
Columbus, OH
Hennepin, IL
East Chicago, IN
New Carlisle, IN
Riverdale, IL
Burns Harbor, IN
Coatesville, PA
Conshohocken, PA
Lackawanna, NY
Weirton, WV
Sparrows Point, MD
Gary, IN
Jackson, MS
Lázaro Cárdenas
Vitoria
São Francisco do Sul
Hamilton
Integrated
Coke making
Downstream
Downstream
Integrated
Downstream
Integrated
Integrated
Mini-mill
Downstream
Downstream
Downstream
Integrated
Downstream
Downstream
Mini-mill
Integrated
Downstream
Integrated, Mini-mill
Flat
Coke
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Flat
Lázaro Cárdenas
Double G Coatings
CST
Vega do Sul
Integrated steelmaking facilities
Integrated or Mini-mill steelmaking facilities
Downstream finishing facilities
Facility
Coke Plant
Sinter Plant
Blast Furnace
DRI Plant
Continuous Bloom / Billet Caster
Bar / Rail Mill
Wire Rod Mill
Continuous Caster - Slabs
Hot Rolling Mill
Pickling Line
Tandem Mill
Annealing Line
Skin Pass Mill
Tinplate Mill
Tin Free Steel (TFS)
Color Coating Line
Plate Mill
1
2
6
6
16
23
2
9
3
1
3
1
22
11
18
10
8
14
19
1
4
1
1
6
6.3
13.3
32.4
36.6
4.1
9.3
2.6
0.7
1.0
0.7
41.3
34.9
21.4
15.8
10.1
12.3
7.4
0.2
1.3
0.5
0.3
3.2
6.3
14.1
27.5
29.2
3.9
7.8
1.2
0.4
0.7
0.4
34.8
25.6
13.7
10.0
5.8
6.7
4.5
0.0
0.7
0.2
0.3
2.9
P
Flat Carbon Europe
Flat Carbon Europe
Flat Carbon Europe facilities
Flat Carbon Europe – Plants, property and equipment
ArcelorMittal’s Flat Carbon Europe segment has production facilities in Western and Eastern Europe, including Germany, Belgium,
France, Spain, Italy, Luxembourg, Romania, Poland and the Czech Republic. The following two tables sets forth a general description of
ArcelorMittal’s principal production locations and production units in the Flat Carbon Europe segment:
Unit
Bremen
Eisenhüttenstadt
Gent
Dunkerque Mardyck
Liège
Florange
Avilés
Bilbao
Fos
Dabrowa
Krakow
Ostrava
Locations
Type of plant
Products
Facility
Galati
Country
Arcelor Bremen
Germany
Bremen
Integrated
Flat
Liège
Belgium
Liège
Integrated
Flat
Arcelor Atlantique
France
Dunkirk, Mardyck,
Montataire, Desvres
Integrated
Flat
Arcelor Lorraine
France
Florange, Mouzon
Integrated
Flat
Arcelor Eisenhüttenstadt
Germany
Eisenhüttenstadt
Integrated
Flat
Arcelor España
Spain
Avilés, Gijón
Integrated
Flat
Arcelor Méditerranée
France
Fos-sur-Mer, Saint-Chély
Integrated
Flat
Arcelor Gent
Belgium
Ghent, Geel, Genk
Integrated
Flat
ACB
Spain
Bilbao
Mini-mill
Flat
Industeel
France, Belgium
Charleroi, Le Creusot,
Chateauneuf,
Saint-Chamond
Mini-mill
Flat
Mittal Steel Galati
Romania
Galati
Integrated
Flat, Long,
Pipes and Tubes
Mittal Steel Poland
Poland
Krakow, Swietochlowice
Integrated
Flat
Coke Plant
Sinter Plant
Blast Furnace
Continuous Bloom / Billet Caster
Billet Rolling Mill
Hot Rolling Mill
Pickling Line
Tandem Mill
Annealing Line
Skin Pass Mill
Tinplate Mill
Color Coating Line
Plate Mill
Welded Pipes
1
2
20
15
24
18
5
3
3
1
22
15
26
21
14
14
33
9
9
13
2
2
11.9
53.7
39.8
41.0
2.6
1.6
0.7
2.5
38.4
36.6
23.3
20.2
5.1
8.0
11.7
2.2
1.9
2.0
2.9
0.2
11.0
44.7
32.7
34.1
2.0
0.2
0.6
0.2
33.0
30.6
15.4
17.2
3.4
5.9
10.7
1.7
1.5
1.4
1.7
0.2
P
Long Carbon Americas
Long Carbon Europe
Long Carbon Americas facilities
Long Carbon Europe facilities
Hamburg
Contrecoeur East and West Longueuil
Steelton
Georgetown
Warsaw
Ruhrort/Hochfeld
Indiana Harbor
Belval/Rodange/Differdange
Thüringen*
Schifflange
Ostrava
Gandrange
Lázaro Cárdenas*
Point Lisas
Pallanzeno*
San Zeno
Zumarraga
Laminadora Costarricense
Gijón
Bergara
Olaberría
Zaragoza
Madrid
Itaúna
Piracicaba
Monlevade
Vitória
Juiz de Fora
Acindar
* Sicartsa acquired in 2007.
Katowice DG, Sosnowiec
* Pallanzeno and Thüringen sold in January 2007.
Hunedoara
Long Carbon Americas and Europe – Plants, property and equipment
Long Carbon Americas and Europe – Plants, property and equipment
ArcelorMittal’s Long Carbon segment has production facilities in North and South America and Europe, including the United States, Canada,
Brazil, Trinidad, Spain, Germany, France, Luxembourg, Italy, Poland, Romania and the Czech Republic. The following two tables set forth a
general description of ArcelorMittal’s principal production locations and production units in the Long Carbon segment:
Unit
Country
Travi e Profilati di Pallanzeno
Italy
Arcelor Thüringen
Germany
Arcelor Profil Luxembourg SA
Luxembourg
Aceralia Largos Veriña Carril & Alambron
Spain
Arcelor Madrid SL
Spain
Arcelor Olaberría
Spain
Arcelor Bergara
Spain
Arcelor Laminados Zaragoza, SA
Spain
Arcelor Rodange
Luxembourg
Arcelor Huta Warszawa
Poland
Arcelor Zumárraga
Spain
Mittal Steel Europe
Germany
Mittal Steel Europe
Germany
Mittal Steel Tréfileurope
Luxembourg
Mittal Steel Hunedoara
Romania
Mittal Steel Ostrava
Czech Republic
Mittal Steel Poland
Poland
Mittal Steel Canada
Canada
Mittal Steel USA
USA
Mittal Steel USA
USA
Mittal Steel USA
USA
Mittal Steel Point Lisas
Trinidad
Belgo
Brazil
Belgo
Argentina
Belgo
Brazil
Arcelor Belgo
Costa Rica
Wire Drawing
Luxembourg, USA, Austria, Hungary, Poland, UK, Brazil,
Canada, Costa Rica, Argentina
Type of plant
Products
Pallanzeno
Downstream
Unterwellenborn
Mini-mill
Esch-Belval Differdange
Mini-mill
Gijón
Downstream
Madrid
Mini-mill
Olaberría
Mini-mill
Bergara
Mini-mill
Zaragoza
Mini-mill
Esch Schifflange, Rodange
Mini-mill
Warsaw
Mini-mill
Zumárraga
Mini-mill
Hamburg
Mini-mill
Ruhrort, Hochfeld
Mini-mill
Schifflange
Downstream
Hunedoara
Mini-mill
Ostrava
Integrated
Dabrowa Gornica, Sosnowiec
Integrated
Contrecoeur East, West
Mini-mill
Steelton, PA
Mini-mill
Georgetown, SC
Mini-mill
Indiana Harbor Bar, IN
Mini-mill
Point Lisas
Mini-mill
Jao Monlevade
Integrated
Villa Constitucion
Mini-mill
Juiz de Fora, Piracicaba, Vitoria
Mini-mill
Costa Rica
Downstream
Bissen, Bettembourg, Arkansas, Szengotthard, Sycow, Sheffield, BBA, BMB, BBN, Montreal, Contagem, Vespasiano,
Ferra de Santana, La Tablada Downstream
Locations
Long / Sections
Long / Sections
Long / Sections, Sheet Piles
Long / Rails, Wire Rod
Long / Sections
Long / Sections
Long / Sections
Long / Light Bars and Angles
Long / Sections, Rails, Rebars
Long / Bars
Long / Bars, Wire rods
Long / Wire Rods
Long / Billets, Wire Rod
Long / Wire Drawing
Long / Sections, Wire Rod
Long / Wire Rod / Bars
Long / Rail
Long / Wire Rod
Long / Bar
Long / Wire Rod
Long / Wire Rod
Long / Wire Rod / Bar
Long / Bar / Wire Rod
Long / Wire Rod
Long / Wire Drawing
Facility
Coke Plant
Sinter Plant
Blast Furnace
DRI Plant
Continuous Caster - Bloom / Billet
Billet Rolling Mill
Section / Bar / Rail Mill
Wire Rod Mill
Hot Rolling Mill
Pickling Line
Tandem Mill
Annealing Line
Skin Pass Mill
Seamless Pipes
Welded Pipes
1
2
Capacity (in millions of tonnes per year) 13
4
7
11
6
24
30
2
3
35
14
1
2
3
4
6
1
3
3
2
2
6.1
13.2
9.6
11.2
6.2
19.6
26.5
5.6
3.7
16.4
9.3
2.3
2.0
0.7
0.6
0.5
0.2
0.0
0.1
0.3
0.2
Production in 2006 (in millions of tonnes)1 / 2
P
5.4
10.7
7.8
9.6
4.1
16.1
21.9
1.2
1.1
12.2
7.3
1.9
1.4
0.7
0.4
0.5
0.1
0.0
0.1
0.3
0.2
AACIS
AACIS
AACIS facilities
AACIS – Plants, property and equipment
ArcelorMittal’s AACIS segment has production facilities in Europe, Asia and Africa, including Kazakhstan, Ukraine, South Africa, Algeria,
Macedonia, Bosnia and Herzegovina and Morocco. The following two tables set forth a general description of ArcelorMittal’s principal
production locations and production:
Unit
Kryviy Rih
Zenica
Sonasid
Temirtau
Skopje
Annaba
Hunan Valin*
Type of plant
Products
Mittal Steel Temirtau
Kazakhstan
Karaganda
Integrated
Mittal Steel Kryviy Rih
Ukraine
Kryviy Rih
Integrated
Mittal Steel South Africa
South Africa
Vanderbijlpark, Saldanha,
Newcastle, Vereeniging
Mittal Steel Annaba
Algeria
Annaba
Mittal Steel Skopje
Macedonia
Skopje
Downstream
Mittal Steel Zenica
BH
Zenica
Mini-mill
Sonasid
Morocco
Nador, Jorf, Lasfar
Mini-mill
Pipes and Tubes
Romania, Czech Republic, Roman, Ostrava, Vereeniging, South Africa, Algeria,
Annaba, Krakow, Iasi, Galati,
Poland, Canada, Kazakhstan
Contrecoeur, Temirtau
Downstream
Country
Locations
Flat, Pipes
and Tubes
Long
Flat, Long,
Pipes and Tubes
Flat, Long,
Pipes and Tubes
Flat
Long
Long
Pipes and Tubes
Facility
Vanderbijlpark
Saldanha
Newcastle
Vereeniging
Flat
Long
* 29.5% owned.
Coke Plant
Sinter Plant
Blast Furnace
DRI Plant
Continuous Caster - Bloom / Billet
Billet Rolling Mill
Section / Bar Mill
Wire Rod Mill
Hot Rolling Mill
Pickling Line
Tandem Mill
Annealing Line
Skin Pass Mill
Tinplate Mill
Color Coating Line
Plate Mill
Seamless Pipes
Welded Pipes
24
11
15
19
6
11
4
2
2
14
7
6
5
6
6
10
6
7
2
4
3
1
4
3
11.3
26.8
22.2
22.5
1.5
5.7
4.3
10.0
2.3
5.9
4.1
11.2
12.0
5.6
5.7
2.1
1.9
1.7
0.2
1.4
0.2
0.6
0.8
0.3
8.4
23.5
16.4
16.8
1.4
3.7
2.8
7.6
1.7
5.8
3.8
7.5
8.0
3.8
3.5
1.2
0.9
1.4
0.1
0.9
0.2
0.4
0.4
0.1
Production facility details include the production numbers for each step in the steelmaking process. Output from one step in the process is used as input
2
1
Stainless
Stainless
Stainless assets
Stainless – Plants, property and equipment
ArcelorMittal’s Stainless Steel segment has production facilities in South America and Europe, including Brazil, France and Belgium.
The following two tables set forth a general description of ArcelorMittal’s principal production locations and production units in the
Stainless Steel segment:
Country
Locations
Type of plant
Products
Acesita
Brazil
Ugine & Alz
France, Belgium
Unit
Timoteo
Silicium Steel,
Carbon Alloyed, Steel
Charleroi (Carinox),
Gueugnon, Genk, Isbergues*
Integrated
Stainless Steel
Mini-mill
Stainless Steel
* The Isbergues melt shop closed in the third quarter of 2006.
Facility
Blast Furnace
Electric Arc Furnace 3
Hot Rolling Mill
Cold Rolling Mill (Z mill)
Pickling Line 4
Annealing Line
Skin Pass Mill
2
6
1
4
4
19
5
16
7
0.7
3.0
0.1
3.0
4.5
2.1
2.1
2.4
1.3
0.5
2.2
0.0
2.2
2.2
1.6
1.7
1.8
0.9
Production facility details include the production numbers for each step in the steelmaking process. Output from one step in the process is used as input in the next step in the
process. Hence, the summation of production numbers does not equal the quantity of saleable finished steel products.
2
3
In 2006, the Isbergues plant produced an additional 220,000 tonnes at the electric arc furnace and continuous casting (the melt-shop shut down in the third quarter of 2006).
4
Allocation to pickling lines and annealing lines is based on “carbon steel process” logic where the category “Pickling Line” includes hot annealing lines (anneal prior rolling
for stainless steel). Annealing lines include final annealing and pickling lines as well as bright annealing lines, which are similar to annealing lines for carbon steel.
1
Melt shop capacity
Service centre
Sales office Stainless Steel International
88 ArcelorMittal Fact Book 2006 – Production Facilities
Production Facilities
ArcelorMittal’s principal operating subsidiaries are grouped into six segments,
and has production facilities in 27 countries in North and South America,
Europe, Asia and Africa. All of its operating subsidiaries are substantially owned
by ArcelorMittal through intermediate holding companies.
27
Production Facilities – ArcelorMittal Fact Book 2006 89
USA, Burns Harbour
USA, Sparrows Point
Operational capacity and production 2006 in metric tonnes
Iron Ore
Coal
Iron Ore
Sintering Plant
2,200kt
Blast Furnace
4,700kt
Coke Oven
1,500kt
Sintering Plant
3,176kt
Blast Furnace
3,358kt
(2,039kt)
(3,935kt)
(1,503kt)
(2,261kt)
(2,310kt)
Plate Mill
1,125kt
Oxygen Converter
5.085kt
Oxygen Converter
3,448kt
(3,543kt)
(2,555kt)
Slab Caster
4,628kt
Slab Caster
3,358kt
(3,649kt)
(2,450kt)
Slab
(1,045kt)
Plate
Hot Rolling Mill
4,083kt
(3,055kt)
Cold Rolling Mill
2,270kt
Hot Rolled Coil
(1,764kt)
Cold Rolled Coil
Hot Rolling Mill
2,722kt
(1,723kt)
Cold Rolling Mill
1,858kt
Hot Rolled Coil
(1,260kt)
Coated Coil
(522kt)
Operational capacity
Production 2006
Slab
Coal
Cold Rolled Coil
Coated Coil
(455kt)
Production 2006
USA, Cleveland
USA, Indiana Harbor East and West
Sinter
Blast Furnace
2,815kt
Coke
Iron Ore
Scrap
Sintering Plant
2,100kt
Blast Furnace
9,406kt
(1,778kt)
(7,452kt)
(2,426kt)
Oxygen Converter
5,771kt
(2,971kt)
Slab Caster
4,682kt
Oxygen Converter
8,979kt
(2,949kt)
(7.938kt)
Slab
Cold Rolling Mill
1,633kt
Hot Rolling Mill
2,995kt
Slab Caster
9,092kt
(2,260kt)
(7.714kt)
Hot Rolled Coil
Slab
(520kt)
Cold Rolled Coil
Coke
Scrap
Hot Rolling Mill
8,893kt
(6,786kt)
Coated Coil
Cold Rolling Mill
4,083kt
(131kt)
(2,280kt)
Cold Rolled Coil
Hot Rolled Coil
Coated Coil
(675kt)
Production 2006
Production 2006
Canada, Dofasco / Hamilton
Mexico, Lázaro Cárdenas
Coal
Direct Reduced
Iron
4100kt
(3901kt)
Sinter
Blast Furnace
2,500kt
Coke Oven
1,041kt
4,000kt
(2,384kt)
(1,018kt)
(3,839kt)
Oxygen Converter
2,430kt
Scrap
Continuous Casting
Slabs
3,800kt
(3,692kt)
(2,425kt)
Production 2006
Continuous Casting Slabs
3,680kt
1,260kt
(3,670kt)
(1,250kt)
Slab
Hot Rolling Mill
4,200kt
(3,670kt)
(3,894kt)
Cold Rolling Mill
1,165kt
Hot Rolled Coil
Cold Rolled Coil
Coated Coil
Slab
Production 2006
Brazil, CST and Vega do Sul
Czech Republic, Ostrava
Iron Ore
Coal
Iron Ore
Coal
Sintering Plant
6,500kt
Blast Furnace
5,094kt
Coke Oven
1,795kt
Sintering Plant
3.700kt
Blast Furnace
4,114kt
Coke Oven
1,500kt
(6,013kt)
(4,900kt)
(1,700kt)
(3,558kt)
(3,159kt)
(1,360kt)
Scrap
Oxygen Converter
3,600kt
Oxygen Converter
5,274kt
(3,062kt)
(4,800kt)
Slab Caster
5,135kt
Continuous Casting
Slabs
1,350kt
Continuous Casting
Billets
2,200kt
(5,000kt)
(3,062kt)
(1,854kt)
Hot Rolling Mill
2,709kt
Slab
Blooms Billets
(2,000kt)
(1,151kt)
Hot Rolled Coil
Hot Rolling Mill
1,350kt
Slab
Cold Rolling Mill
940kt
(880kt)
Cold Rolled Coil
Section/Wire Rod/Mill
2,350kt
(1,124kt)
Coated Coil
(440kt)
Hot Rolled Coil
Sections
Wire Rod
Seamless Pipe
(1,004kt)
(445kt)
(276kt)
Welded Pipes
45kt
Production 2006
(38kt)
Production 2006
Romania, Galati
Poland, Krakow
Iron Ore
Coal
Iron Ore
Coal
Sintering Plant
8,150kt
Blast Furnace
6,300kt
Coke Oven
2,255kt
Sintering Plant
2,100kt
Blast Furnace
2,300kt
Coke Oven
1,375kt
(4,948kt)
(3,940kt)
(1,804kt)
(1,983kt)
(1,777kt)
(1,200kt)
Slab Caster
4,500kt
Oxygen Converter
6,400kt
Bloom Caster
1,200kt
Scrap
Oxygen Converter
2,600kt
(3,926kt)
(4,369kt)
(223kt)
(1,968kt)
Billet Mill
1,000kt
Continuous Casting
Slabs
2,100kt
(214kt)
(1,823kt)
Blooms Billets
Slab
Slab
Plate Mill
2,700kt
Hot Rolling Mill
3,500kt
(1,535kt)
(2,096kt)
Plate
Hot Rolled Coil
Welded Pipes
44kt
(1,924kt)
Cold Rolling Mill
1,560kt
Galvanizing Line
200kt
Welded Pipes
165kt
(406kt)
(184kt)
(109kt)
Cold Rolled Coil
Coated Coil
Hot Rolled Coil
Cold Rolling Mill
1,350kt
(857kt)
(32kt)
Coated Coil
330kt
Production 2006
Hot Rolling Mill
2,100kt
Production 2006
(182kt)
Cold Rolled Coil
Poland, Dabrowa
Spain, Gijón and Avilés
Iron Ore
Iron Ore
Sintering Plant
7,700kt
Blast Furnace
4,400kt
(5,436kt)
(3,534kt)
Oxygen Converter
5,000kt
Coke
Scrap
Coal
Sintering Plant
5,500kt
Blast Furnace
4,600kt
Coke Oven
2,470kt
(5,272kt)
(3,578kt)
(2,452kt)
Scrap
Oxygen Converter
6,250kt
(5,200kt)
3,953 kt
Breakdown Mill
4,500kt
Continuous casting
Billets and Blooms
3000kt
Continuous Casting
Slabs
Continuous casting
Billets and Blooms
(1,071kt)
(2,553kt)
(3,061kt)
(553kt)
Slab
Blooms Billets
Slab
Hot Rolling Mill
3,650kt
Blooms Billets
(3,015kt)
Section Mill
1800kt
Wire Rod Mill
550kt
(1,598kt)
(347kt)
Sections
Hot Rolled Coil
Cold Rolling Mill
1,130kt
Wire Rod
Section and Rail Mill
1,000kt
Wire Rod Mill
600kt
(654kt)
(400kt)
Sections
Wire Rod
(654kt)
Coated Coil
Production 2006
(743kt)
Cold Rolled Coil
Production 2006
France, FOS
France, Dunkerque, Mardyck and Montataire
Iron Ore
Coal
Iron Ore
Coal
Sintering Plant
6,800kt
Blast Furnace
5,110kt
Coke Oven
1,650kt
Sintering Plant
9,600kt
Blast Furnace
6,972kt
Coke Oven
1,360kt
(6,252kt)
(4,277kt)
(1,490kt)
(7,676kt)
(5,850kt)
(1,371kt)
Scrap
Oxygen Converter
5,000kt
Scrap
Oxygen Converter
6,750kt
(4,173kt)
(6,250kt)
Continuous Casting
Slabs
4,200kt
Continuous Casting
Slabs
6,500kt
(4,154kt)
(6,064kt)
Slab
Slab
Hot Rolling Mill
4,800kt
Hot Rolling Mill
4,800kt
(3,859kt)
(4,252kt)
Hot Rolled Coil
Hot Rolled Coil
(114kt)
Cold Rolling Mill
158kt
Production 2006
Cold Rolling Mill
1,692kt
Cold Rolled Coil
Production 2006
(1,641kt)
(1,873kt)
Cold Rolled Coil
Coated Coil
2,050kt
France, Florange, Mouzon and Dudelange
Germany, Bremen
Iron Ore
Coal
Iron Ore
Sintering Plant
4,400kt
Blast Furnace
2,847kt
Coke Oven
680kt
Sintering Plant
2,233kt
Blast Furnace
3,943kt
(3,946kt)
(2,191kt)
(691kt)
(2,100kt)
(3,154kt)
Scrap
Oxygen Converter
2,500kt
Oxygen Converter
3,600kt
(2,150kt)
(3,450kt)
Continuous Casting
Slabs
2,500kt
Slab Caster
3,400kt
(2,070kt)
(3,402kt)
Slab
Slab
Hot Rolling Mill
3,100kt
Hot Rolling Mill
5,000kt
(2,623kt)
(3,356kt)
Hot Rolled Coil
Hot Rolled Coil
Cold Rolling Mill
2,152kt
Production 2006
(2,072kt)
(1,713kt)
Cold Rolled Coil
Coated Coil
2,038kt
Cold Rolling Mill
1,367kt
Production 2006
Coke
(1,319kt)
(877kt)
Cold Rolled Coil
Coated Coil
Germany, Ekostahl, Eisenhüttenstadt
South Africa, Vanderbijlpark
Iron Ore
Sintering Plant
2,900kt
Blast Furnace
2,200kt
(2,898kt)
(2,182kt)
Oxygen Converter
2,300kt
Coke
(199kt)
Continuous casting
Billets and Blooms
220kt
Iron Ore
Coal
Sintering Plant
2,500kt
Coke Oven
1,700kt
(2,443kt)
(1,296kt)
Blast Furnace
3,796kt
Blooms Billets
Scrap
Direct Reduced
Iron
600kt
(2,694kt)
(2,250kt)
(676kt)
Slab Caster
2,180kt
Slab Caster
4,740kt
Oxygen Converter
3,360kt
Oxygen Converter
1,500kt
(1,900kt)
(3,424kt)
(2,651kt)
(984kt)
Slab
(1,020kt)
Slab
(2,894kt)
(1,535kt)
Hot Rolling Mill
2,150kt
Plate Mill
600kt
Hot Rolling Mill
3,500kt
Hot Rolled Coil
(1,660kt)
(416kt)
Hot Rolled Coil
Plate
Cold Rolling Mill
1,430kt
Production 2006
(1,195kt)
(970kt)
Cold Rolled Coil
Coated Coil
Production 2006
Cold Rolling Mill
1,483kt
Galvanizing Line
800kt
(1,401kt)
(681kt)
Cold Rolled Coil
Coated Coil
Kazakhstan, Temirtau
Ukraine, Kryviy Rih
Iron Ore
Coal
Iron Ore
Coal
Sintering Plant
7,200kt
Blast Furnace
4,590kt
Coke Oven
3,507kt
Sintering Plant
11,944kt
Blast Furnace
8,340kt
Coke Oven
3,864kt
(5,965kt)
(3,369kt)
(2,496kt)
(11,398kt)
(6,803kt)
(2,696kt)
Oxygen Converter
6,000kt
Oxygen Converter
6,500kt
(3,674kt)
(5,671kt)
Slab Caster
5,200kt
Ingot Casting
(3,400kt)
(3,400kt)
Slab
Billet Mill
7,700kt
Blooms Billets
(800kt)
Hot Rolling Mill
4,600kt
Section/ Wire
Rod Mill
5,720kt
(3,290kt)
Hot Rolled Coil
Cold Rolling Mill
2,600kt
Production 2006
(1,663kt)
(1,251 kt)
Cold Rolled Coil
Coated Coil
Sections
Wire Rod
(2,002kt)
(3,897kt)
Production 2006
110 ArcelorMittal Fact Book 2006 – Financials
Financials
ArcelorMittal’s stronger, more diversified business model will enable
us to maintain a consistent earnings base. Indeed, over the past
three years, ArcelorMittal has reported pro forma EBITDA of approximately
US$15 billion, demonstrating a stability that neither company would have
achieved on its own.
15
Financials – ArcelorMittal Fact Book 2006 111
112 ArcelorMittal Fact Book 2006 – Financials
Consolidated Statements of Income
and Cash Flows
Consolidated Balance Sheet
ArcelorMittal Consolidated Statements of Income – pro forma (unaudited)
ArcelorMittal Consolidated Balance Sheet – actual (audited)
In millions of US dollars, except shares, per share, employee and shipment data
Year ended
December 31, 2005
Year ended
December 31, 2006
Sales
80,171
88,576
Depreciation
3,311 3,448
Operating Income
11,648 11,824
Operating Margin %
14.5 %
13.3 %
Other income (expense) - net
329 50
Income from equity method investments
429 569
Financing costs - net
(1,257) (1,328)
Income before taxes and minority interest
11,149 11,115
Income tax expense
1,403 1,654
Income before minority interest
9,746 9,461
Minority interest
(1,483) (1,488)
Net income
8,263 7,973
Basic earnings per common share
5.97 5.76
Diluted earnings per common share
5.97 5.76
Weighted average common shares outstanding (in millions) 1
1,383 1,383
Diluted weighted average common shares outstanding (in millions)
1,385 1,385
EBITDA 2
14,959 15,272
EBITDA Margin %
18.7 %
17.2 %
Other information
Total shipments of steel products 3 (millions of metric tonnes) 102.9 110.5
Employees (000’s)
334 320
1
2
3
T he information provided assumes that shares issued in connection with the acquisition of Arcelor were issued at the beginning of the period presented.
EBITDA defined as operating income plus depreciation.
ArcelorMittal Consolidated Statement of Cash Flows – pro forma (unaudited)
In millions of US dollars
Year ended
December 31, 2006
Net cash provided by operating activities
10,285
Investing activities: Purchase of property, plant and equipment (4,638)
Other investing activities (net)
(137)
Net cash used in investing activities
(4,775)
Financing activities:
Proceeds (payments) from payable to banks and long-term debt
(718)
Dividends paid (2,480)
Other financing activities (net)
(88)
Net cash used in financing activities (3,286)
Effect of exchange rate changes on cash
295
Change in cash and cash equivalents
2,519
Financials – ArcelorMittal Fact Book 2006 113
In millions of US dollars
ASSETS
Current Assets
Cash and cash equivalents
Restricted cash
Short-term investments
Trade accounts receivable – net Inventories
Prepaid expenses and other current assets (including assets held for sale)
Total Current Assets
Goodwill and intangible assets Property, plant and equipment Investments accounted for using the equity method
Other investments
Deferred tax assets Other assets
Total Assets
LIABILITIES AND EQUITY
Current Liabilities
Payable to banks and current portion of long-term debt
Trade accounts payable
Accrued expenses and other current liabilities Total Current Liabilities
Long-term debt, net of current portion
Deferred tax liabilities Other long-term obligations and deferred employee benefits
Total Liabilities
Shareholders’ Equity
Minority Interest
Total Equity
Total Liabilities and Equity
As of
December 31, 2006
6,020
120
6
8,769
19,238
5,209
39,362
10,782
54,696
3,492
1,151
1,670
1,013
112,166
4,922
10,717
8,921
24,560
21,645
7,274
8,496
61,975
42,127
8,064
50,191
112,166
114 ArcelorMittal Fact Book 2006 – Share Price and Shareholding
Share Price and Shareholding
Our share price has performed very well since the
merger was announced, rising some 90% in the months
following. It is pleasing to see that the market can see
the benefits and further potential the merger has created.
90
%
Share Price and Shareholding – ArcelorMittal Fact Book 2006 115
Steel Sector and Stock Market Performance
Since August 1st 2006 USD/share
70
200
65
180
60
160
55
140
50
45
120
40
35
30
ArcelorMittal
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
100
ArcelorMittal
80
S&P 500
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Since August 1st 2006 (EUR)
200
200
180
180
160
160
140
140
120
120
100
ArcelorMittal
100
ArcelorMittal
80
HSBC Global Metals and Mining index
80
DJ EuroStoxx 50
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Share Information
Share Information
2005
2006****
Number of shares issued (in millions)
Number of shares outstanding (in millions)
1392.3
1384.9
1392.3
1384.9
High share price*
Low share price*
Average share price*
$42.60 $22.30 $29.32 $43.27 $31.13 $37.72 since 1 Aug
since 1 Aug
since 1 Aug
High share price**
Low share price**
Average share price**
€32.40 €18.00 €23.65 €34.03 €24.33 €29.38 since 1 Aug
since 1 Aug
since 1 Aug
$40.82 $52.52 since 1 Aug
Average market capitalisation (billions)
Earning per share
Cash flow per share ***
Book value per share
Dividend
Free float
$5.97
N/A
N/A
N/A
$5.76
$7.43
$30.42
$1.30
–
55.0%
Sources:
* NYSE.
** Paris Stock Exchange.
*** Cash flow from operations.
**** Share data corrected from 1 August 2006.
pro forma
pro forma
pro forma
Year ended December 31, 2002
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Month ended
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 1 – April 12, 2007
Note: Includes intraday highs and lows.
Shareholding structure*
1
2
* As at 31 December 2006.
1. Free float (761.3 million shares)
2. Mittal family (623.6 million shares)
55%
45%
The New York
Stock Exchange
ArcelorMittal
Class A Common
Shares
High $3.10
9.06
42.80
Low Euronext
Amsterdam
ArcelorMittal
Class A Common
Shares
High Low
$1.26 €3.25 €1.51
2.05
7.50
2.05
6.80 32.45
5.20
Euronext
Paris
ArcelorMittal
Class A Common
Shares
High Low
-
- -
-
-
-
-
-
-
43.86
34.00
30.78
29.54
29.70
22.11
23.55
22.95
33.25
26.10
25.34
25.60
22.55
17.31
19.00
19.25
26.72
28.80
27.79
33.90
32.58
32.99
28.14
34.95
22.05
-
22.50
-
21.82 €28.16 €23.00
26.91 35.00 26.67
31.70
33.90
40.12
40.03
39.59
46.45
48.89
53.10
28.14
34.95
34.20
33.00
36.32
41.03
41.00
41.49
24.95
26.91
30.83
30.12
30.02
35.80
36.87
39.41
39.75
42.81
35.09
43.67
35.09
43.34
43.39
43.67
47.57
54.05
54.35
55.49
28.16
35.00
34.21
33.00
36.32
41.03
41.00
41.49
24.97
26.67
30.83
30.10
30.02
35.80
36.86
39.41
Share Information
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Month ended
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 1 – April 12, 2007
1
Share Information
Luxembourg
Stock Exchange
ArcelorMittal
Class A Common
Shares
High (€) -
-
-
Euronext
Brussels
ArcelorMittal
Class A Common
Shares
Ticker symbols
Spanish Stock
Exchanges 1
ArcelorMittal
Class A Common
Shares
Low (€) High (€) Low (€)
High (€) -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24.50
27.00
-
-
28.10
34.84
-
-
24.60
26.90
-
-
28.03
34.85
24.00
26.65
25.40
27.00
30.90
30.44
30.60
35.95
37.20
39.55
28.10
34.84
33.56
33.18
36.00
40.74
41.17
41.59
25.06
26.90
30.95
30.20
30.10
35.67
36.75
39.58
28.03
34.85
34.09
33.00
36.31
41.03
40.40
41.47
24.95
26.65
30.82
30.07
30.12
35.80
36.86
38.80
-
-
-
-
-
-
-
-
-
-
-
-
Low (€)
-
-
-
-
-
-
-
27.35
35.00
27.71
35.00
33.50
32.95
36.00
40.10
40.90
41.25
Spanish Stock Exchanges in Madrid, Barcelona, Bilbao and Valencia (“MTS”).
Note:
– Includes intraday highs and lows.
– Class A common shares were listed on Euronext Paris and the Spanish Stock Exchanges on July 27, 2006 and on Euronext Brussels
and the Luxembourg Stock Exchange on August 1, 2006.
Stock Exchange
Symbol
Bloomberg
Reuters
Paris
Amsterdam
New York
Madrid
Brussel
Luxembourg
MTP
MT
MT
MTM
MTB
MTL
MTP FP
MT NA
MT US
MTM SM
MTB BL
MTL LX
MTP.PA
ISPA.AS
MT.N
MTS.MC
MTBL.BR
MTP.LU
Date
Event
Financial calendar
21-Feb-2007
15-Mar-2007
16-May-2007
15-Jun-2007
1-Aug-2007
17-Sep-2007
14-Nov-2007
17-Dec-2007
Contact information ArcelorMittal Investor Relations
Continental Europe UK/Asia/Africa Americas Retail Bonds/Credit Contact information ArcelorMittal Communications
E-mail: Phone: Website Interim report for 4th quarter and 12 months 2006
Quarterly base dividend payment
Interim report for 1st quarter 2007
Interim report for 2nd quarter and 6 months 2007
Interim report for 3rd quarter and 9 months 2007
+352 4792 2414
+44 207 543 1172
+1 312 899 3569
+352 4792 2434
+33 1 71 92 10 26
[email protected]
+352 4792 2360
Equity Analyst Coverage
The following analysts regularly publish research reports on ArcelorMittal.
Please note that this list is provided for information purposes and might
change when a company initiates or cancels coverage of ArcelorMittal.
The recommendations, forecasts and opinions expressed in these reports
are those of the analysts and are not necessary representing the
recommendations, forecasts and opinions of ArcelorMittal and its management.
Company and Analyst ABN AMRO
Tim Huff
Applebaum Research
Michelle Applebaum
Nate Carruthers
BBVA
Luis de Toledo Bear Stearns
Marina Rohe BHF Bank
Hermann Reith Bradford Research
Charles Bradford
Cheuvreux Alfred Glaser Cazenove
Kartik Swaminathan Citigroup
Thomas Wrigglesworth John Hill Commerzbank
Jutta Rosenbaum Credit Suisse
Michael Shillaker
Ephrem Ravi Deutsche Bank
Johan Rode David Martin Telephone
+44 20 7678 4813 +1 847 433 8465
+1 847 681 0168
+34 91 537 07 09
E-mail
[email protected]
[email protected]
[email protected]
[email protected]
+1 212 272 8578
[email protected]
+49 69 718 2632
[email protected]
+1 212 787 4109
[email protected]
+33 1 4189 7442
[email protected]
+44 20 7155 6408
kartik.swamina [email protected]
+44 20 7986 7208
+1 415 951 1714
[email protected]
[email protected]
+49 69 136 28645
jutta.rosenba [email protected]
+44 20 7888 1344
+44 20 7883 8517
[email protected]
[email protected]
+44 207 547 1443
+1 212 250 5580
[email protected]
[email protected]
Company and Analyst Exane BNP Paribas
Vincent Lepine Sylvain Brunet
Goldman Sachs
Peter Mallin-Jones Aldo Mazzaferro
HSBC Securities
Alan Coats JP Morgan
Michael Gambardella Albert Minassian
Merrill Lynch
Daniel Fairclough Jason Fairclough Morgan Stanley
Johan Swahn Oddo Securities
Harold de Decker Rabo Securities
Frank Claassen Sanford Bernstein Andrew Keen Nik Stanojevic
Société Générale
Luc Pez Alain William
UBS
Andrew Snowdowne Timna Tanners
Telephone
E-mail
+33 1 42 99 50 52
+33 1 42 99 50 84
[email protected]
[email protected]
+44 207 774 1695
+1 212 902 9916
[email protected]
[email protected]
+44 20 7991 6764
[email protected]
+1 212 622 6446
+44 20 7325 6452
[email protected]
[email protected]
+44 20 7996 2636
+44 20 7995 0225
[email protected]
[email protected]
+44 20 7425 6602
[email protected]
+33 1 44 51 81 80
[email protected]
+31 20 460 4868
[email protected]
+44 207 170 5096
+44 207 170 5178
[email protected]
[email protected]
+33 1 42 13 47 39
+33 1 58 98 12 61
[email protected]
[email protected]
+44 20 7568 1823
+1 212 713 2927
[email protected]
[email protected]
124 ArcelorMittal Fact Book 2006 – Glossary and Safe Harbour Statement
Glossary and Safe Harbour Statement
ArcelorMittal is leading the consolidation process in the world
steel industry. With a reputation for producing high-quality steel products
for the most demanding applications, the Group benefits from
a strong market position with high-end customers.
Glossary and Safe Harbour Statement – ArcelorMittal Fact Book 2006 125
Glossary and Safe Harbour Statement – ArcelorMittal Fact Book 2006 127
Glossary
Alloy Steels
Coke
EUR
Ladle Metallurgy
Pig Iron
Alloy steels have enhanced properties due
to the presence of one or more special
elements, or to the presence of larger
proportion of elements such as manganese
and silicon that are present in carbon
steels.
A form of carbonised coal burned in blast
furnaces to reduce iron ore pellets or other
iron-bearing materials to molten iron.
Euro
High carbon iron made by the reduction
of iron ore in the blast furnace.
A term referring to a class of products
including sheet, strip, and plate that are
made from slabs.
The process whereby conditions
(temperature, pressure and chemistry)
are controlled within the ladle of the
steelmaking furnace to improve productivity
in preceding and subsequent steps
and the quality of the final product.
for mechanical applications. Used primarily
in machinery, buildings, sprinkler systems,
irrigation systems, and water wells rather
than in pipelines or distribution systems.
Plate
Strip
Galvanised Steel
Limestone
Produced when hot or cold rolled sheet
or strip is coated with zinc either by the
hot-dipping or electrolytic deposition
process. Zinc coating applied by the hot
dip method is normally heavy enough
to resist corrosion without additional
protective coating. Materials electrolytically
galvanised are not used for - corrosion
resistant applications without subsequent
chemical treatment and painting, except in
mild corrosive conditions, due to the thin
coating of zinc. Galvanise is a pure zinc
coating. A special heat-treating process
converts the pure zinc coating to a zinc/iron
alloy coating, and the product is known as
Galvanneal.
Used by the steel industry to remove
impurities from the iron made in blast
furnaces. Magnesium-containing limestone,
called dolomite, is also sometimes used
in the purifying process.
A process for solidifying steel in the form
of a continuous strand rather than
individual ingots. Molten steel is poured
into open-bottomed, water-cooled moulds.
As the molten steel passes through the
mould, the outer shell solidifies.
HDG
CRC
Apparent Consumption
Total shipments minus exports plus
imports of steel.
Bar
A finished steel product, commonly in flat,
square, round or hexagonal shapes. Rolled
from billets, bars are produced in two major
types, merchant and special.
Basic Oxygen Steelmaking
The process whereby hot metal and steel
scrap are charged into a basic oxygen
furnace (BOF). High purity oxygen is then
blown into the metal bath, combining with
carbon and other elements to reduce the
impurities in the molten charge and convert
it into steel.
Billet
A piece of semi-finished iron or steel that
is nearly square and is longer than a
bloom. Bars and rod are made from billets.
Blast Furnace
A large cylindrical structure into which iron
ore is combined with coke and limestone to
produce molten iron.
Bloom
A semi-finished product, large and mostly
square in cross-section. Blooms are shaped
into girders, beams, and other structural
shapes.
Carbon Steels
The largest percentage of steel production.
Common grades have a carbon content
ranging from 0.06% to 1.0%.
Coke Ovens
Ovens where coke is produced. Coal is
usually dropped into the ovens through
openings in the roof, and heated by gas
burning in flues in the walls between
ovens within the coke oven battery. After
heating about 18 hours, the end doors are
removed and a ram pushes the coke into a
quenching car for cooling before delivery to
the blast furnace.
Cold Rolling
The passing of sheet or strip that has
previously been hot rolled and pickled
through cold rolls, i.e. below the softening
temperature of the metal. Cold rolling
makes a product that is thinner, smoother,
and stronger than can be made by hot
rolling alone.
Line Pipe
Used for transportation of gas,
oil or water generally in a pipeline or utility
distribution system.
Mechanical Tubing
A flat rolled product rolled from slabs or
ingots, of greater thickness than sheet or
strip.
Rolling Mill
Equipment that reduces and transforms
the shape of semi-finished or intermediate
steel products by passing the material
through a gap between rolls that is smaller
than the entering materials.
Semi-Finished Products
Products such as slabs, billets, and
blooms which must be rolled or otherwise
processed to create usable steel shapes.
Welded or seamless tubing produced in a
large number of shapes to closer tolerances
than other pipe.
Sheet
Mini-mill
Sheet Piling
Molten iron produced in the blast furnace.
A small non-integrated or semi-integrated
steel plant, generally based on electric arc
furnace steelmaking. Mini-mills produce
rods, bars, small structural shapes and flat
rolled products.
Rolled sections with interlocking joints
(continuous throughout the entire length
of the piece) on each edge to permit being
driven edge-to-edge to form continuous
walls for retaining earth or water.
Hot Rolling
Net Ton
Sintering
See TON
Cold Rolled Coil (see Cold Rolling)
Rolling semi-finished steel after it has
been reheated.
Crude Steel
HRC
Steel in the first solid state after melting,
suitable for further processing or for sale.
Synonymous to raw steel.
Hot Rolled Coil (see Hot Rolling)
Pipe used in wells in oil and gas industries,
consisting of casing, tubing, and drill pipe.
Casing is the structural retainer for the
walls; tubing is used within casing oil wells
to
convey oil to ground level; drill pipe is used
to transmit power to a rotary drilling tool
below ground level.
A process which combines ores too fine for
efficient blast furnace use with flux stone.
The mixture is heated to form clumps,
which allow better draft in the blast
furnace.
Continuous Casting
Direct Reduction
A family of processes for making iron from
ore without exceeding the melting
temperature. No blast furnace is needed.
Electrical Steels
The primary fuel used by integrated iron
and steel producers.
Specially manufactured cold rolled sheet
and strip containing silicon, processed
to develop definite magnetic characteristics
for use by the electrical industry.
Coil
A finished steel product such as sheet or
strip which has been wound or coiled after
rolling.
An electric furnace used to melt steel scrap
or direct reduced iron.
Coal
Flat Products
Hot Dip Galvanised (see Galvanised Steel)
Hot Metal
Integrated Steelmaker
A producer that converts iron ore into
semi-finished or finished steel products.
Traditionally, this process required
coke ovens, blast furnaces, steelmaking
furnaces, and rolling mills. A growing
number of integrated mills use the direct
reduction process to produce sponge iron
without
coke ovens and blast furnaces.
Iron Ore
The primary raw material in the
manufacture of steel.
JPY
Japanese Yen
Oil Country Tubular Goods (OCTG)
Open-Hearth Process
A process for making steel from molten iron
and scrap. The open-hearth process has
been replaced by the basic oxygen process
in most modern facilities.
Pellets
An enriched form of iron ore shaped
into small balls.
A flat rolled product over 12 inches in width
and of less thickness than plate.
Slab
A wide semi-finished product made from an
ingot or by continuous casting. Flat rolled
steel products are made from slabs.
Sponge Iron
The product of the direct reduction process.
Also known as direct reduced iron (DRI).
Stainless Steels
Stainless steels offer a superior corrosion
resistance due to the addition of chromium
and/or nickel to the molten steel.
Standard Pipe
Used for low-pressure conveyance of air,
steam, gas, water, oil or other fluids and
A flat rolled product customarily narrower
in width than sheet, and often produced to
more closely controlled thicknesses.
Structural Pipe And Tubing
Welded or seamless pipe and tubing
generally used for structural or load-bearing
purposes above-ground by the construction
industry,
as well as for structural members in ships,
trucks, and farm equipment.
Structural Shapes
Rolled flange sections, sections welded
from plates, and special sections with at
least one dimension of their cross-section
three inches or greater. Included are
angles, beams, channels, tees and zeds.
Tin Coated Steel
Cold rolled sheet, strip, or plate coated
with tin or chromium.
Ton (t)
a) A unit of weight in the U.S. Customary
System equal to 2,240 pounds. Also known
as long ton.
b) A unit of weight in the U.S. Customary
System equal to 2,000 pounds. Also known
as short ton. Also known as net ton.
Tonne (T)
A metric tonne, equivalent to 1,000
kilograms or 2,204.6 pounds or 1.1023
short ton.
USD
US Dollar
Wire: Drawn And/Or Rolled
The broad range of products produced
by cold reducing hot rolled steel through
a die, series of dies, or through rolls
to improve surface finish, dimensional
accuracy, and physical properties.
Wire Rods
Coiled bars of up to 18.5 millimetres
in diameter, used mainly in the production
of wire.
Safe Harbour Statement
The company has made, and may
continue to make, various forward-looking
statements with respect to, among
other things, its financial position, business
strategy, projected costs, projected savings,
and plans and objectives of management.
Such statements are identified by the
use of forward-looking words or phrases
such as “anticipates”, “intends”, “expects”,
“plans”, “believes”, or “estimates”,
or words or phrases of similar import.
Actual results may differ materially from
those implied by such forward-looking
statements on account of known and
unknown risks and uncertainties, including,
without limitation, the risks contained
in Mittal Steel’s Form 20-F and other
filings with the Securities and Exchange
Commission. The company does not
make any representation, warranty
or prediction that the results anticipated
by such forward-looking statements will
be achieved, and such forward-looking
statements represent, in each case,
only one of many possible scenarios
and should not be viewed as the most
likely or standard scenario. ArcelorMittal
undertakes no obligation to publicly
update its forward-looking statements,
whether as a result of new information,
future events or otherwise.
This document also contains pro forma
data (adjusted to give effect to the
acquisition by ArcelorMittal of ISG,
Kryvorizhstal and Arcelor) for informational
purposes only and does not purport to
represent what ArcelorMittal results
of operations or financial condition would
have actually been had the acquisition
of ISG, Kryvorizhstal and Arcelor been
completed at the beginning of the period
or to project ArcelorMittal results of
operations or financial position for any
future period.
MITTAL and MITTAL STEEL are trademarks
owned by Mittal Steel Technologies Limited,
ARCELOR and ArcelorMittal are trademarks
owned by Arcelor, both companies being
subsidiaries of Mittal Steel Company N.V.
Designed and produced by www.thoburns.com (United Kingdom).
Published in July 2007. To receive a copy
of the Fact Book 2006, please contact:
ArcelorMittal
L-2930 Luxembourg
T: +352 4792 2360
Copyright 2007 ArcelorMittal
ArcelorMittal
L-2930 Luxembourg
Berkeley Square House
Berkeley Square
London W1J 6DA

ArcelorMittal Fact Book 2006

Transcription

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