Arcelor Mittal Activity Report 2006 - paperJam

12 Arcelor Mittal Activity Report 2006Questions for the Group Management BoardMade up of six members and heading up a mergerof unprecedented size in the steel industry, Arcelor Mittal’sGroup Management Board recognise the challengesahead - not only in maintaining corporate functions butin driving sustainable development forward and continuallymonitoring Health and Safety.Are you pleased with theintegration so far?Roland Junck: As far as the corporatefunctions are concerned, I am very pleasedwith the integration process to date.It has really given us the opportunityto invigorate the corporate functions andlaunch new improved policies for criticalareas such as Health and Safety, HumanResources and Sustainable Development.Aditya Mittal: The integration is goingvery well. What has particularly impressedme is how well people from the twoorganisations are working together andhow quickly they have become aligned.I have had the opportunity to meet andtalk with a lot of our executives andemployees over the past months andthere is a lot of optimism and excitementthroughout the group about our futurepotential. Integration has proved tobe very motivating for all employeeswho can now enjoy challenging businessand career opportunities in a trulyglobal environment.Malay Mukherjee: I am finding that peopleare responding very well to the integrationprocess. If I use the example of stainlesssteel we have really been able to improvethe performance of this division in onlya short time and that has given a lotof motivation to the people in this team.Gonzalo Urquijo: I think the integrationis going better than any of us anticipated.We really have made a lot of progress sincethe merger was announced. Combiningthe two companies has enabled usto accelerate our respective strategiesand the progress is already very visible.I think employees are enjoying sharingtheir knowledge and expertise with theirnew colleagues and there is a definitesense of positive momentum.Michel Wurth: From the perspectiveof my operational responsibilities,integration is progressing well and onschedule. People seem excited by theopportunities created by combiningthe businesses which has created a newcompany stronger than the sum of thetwo parts. If I highlight the automotivesector, we are able to share technologiesand processes which will ultimately createconsiderable benefits for our customers.What are the benefits and gainsof the merger in your area of business?Roland Junck: With the huge diversityof the Group, we have the opportunityto gain enormously from the spreadof best practice. Through the PerformanceEnhancement unit, we are creatingteams of experts drawn from the operationin every area. The rest of the Groupwill be able to call on them at any time.This is a wonderful resource and onewhich is already reaping the benefits.There is so much that we can achievethrough the benchmarking of bestpractice and regular knowledge sharing.Through our Global Executive DevelopmentProgramme, we are providing enhancedcareer development opportunitiesfor our managers.Aditya Mittal: The gains span everyarea of the American flat business.We are sharing best practice bothnorth-south and east-west to good effect.Company-wide purchasing initiativesand shared services are deliveringoverhead savings. At the commercial level,we now have single account teamsin place to manage slab sales for CSTin Brazil and Lázaro Cárdenas in Mexico.Many more benefits will emerge as weoptimise the product flow and concentrateproduction of certain high-value productssuch as top-end plates.Malay Mukherjee: The gains arenumerous. Integrated distributionis a key one – allowing us to explorenew markets. The sharing of bestpractice in pipes and tubes is another.The opportunity to combine StainlessSteel’s purchasing of energy, scrapand alloys with that of the carbon steeloperations offers big synergies.Gonzalo Urquijo: Consolidated purchasing,moves to specialise plants around keyproducts, the integration of wire rod andwire drawing activities, the ability to drawon the international sales offices ratherthan rely on external traders – the listof gains is almost endless! But the keyone is the ability to improve logistics.By allocating plants to different marketswe can reduce the distance over whichproducts have to travel – what I call “steeltourism”. There will also be big advantagesfrom a refocusing of our investmentspending to avoid duplication and deliverquality improvements and cost savings.Michel Wurth: There are a lot of gains– from improved logistics, better sourcing,cross-selling and so on. But perhapsit is the rapid transfer of best practicesthat is the best example of internal gainsfrom the merger. For instance, in EasternEurope, each steel shop, each hot rollingmill, each production line, is being twinnedwith a counterpart in Western Europe.Through exchanges of personnel, bestpractice is being absorbed in a very rapid– and very unbureaucratic – fashion.What are the benefits of the mergerfor customers?Aditya Mittal: As a truly globalorganisation, we are now uniquely placedto support our global customers throughan in-depth partnership that pullstogether all the regional relationshipswe enjoyed with them before. With oneglobal account team for each majorOEM (Original Equipment Manufacturer),we are able to deliver them standardsolutions worldwide. The merger alsoenables us to offer our North Americancustomers a wider range of advancedsteel. And through the combinationof the two companies’ R&D efforts,we are better placed than ever to deliverthem the next generation of steel thatwill help them remain competitive.