ANNUAL REPORT ARCELOR 2003 - paperJam

Does this mean that the Group is entering anew phase?Yes. We are preparing to embark on a new phase ofgrowth. We can now afford to do so because we havebeen able to reduce our debt level beyond theinitial goal and more rapidly than expected,thereby freeing up the resources that are necessaryfor growth. We are also gradually implementing thedivestment of non-strategic activities according to thecommitments we have undertaken. Finally, we alreadycarried out several important projects in 2003: in FlatCarbon Steels with the operational start-up of theautomotive galvanising lines in Brazil (Vega do Sul), andin Turkey in partnership with Borusan, which expand ourglobal offer of quality products for the automotiveindustry.Our partnership with Nippon Steel Corporation in thecontext of the Global Strategic Alliance assumes its fullimport here, with the formulation of a joint product listfor our major industrial customers in the automotiveindustry and our participation in the Arcelor-Baosteel-Nippon Steel joint venture for the construction of a plantnear Shanghai that will meet the growing needs of theChinese automotive industry. With regard to distributionin Central and Eastern Europe, we doubled the capacityof the steel service centre in Bytom, Poland, andinvested in a new service centre in Slovakia. Finally, withthe beams mill in Pallanzeno, Italy, and an investment inthe San Zeno steelworks, we completed a targetedacquisition that is strengthening our leadership in longcarbon products in Europe.What is the economic outlook forsteel in 2004?Signs of a recovery can be seen in Europe, but wewill have to wait for the third quarter to gauge howsolid and lasting the recovery might be. For a grouplike Arcelor, which does 75% of its business in theEuropean Union, it is clear that this exposure needsto be rebalanced. However, steel consumption in therest of the world is in good shape: certainly in China,which represented more than 25% of world consumptionin 2003 with record growth rates that are veryencouraging for the world steel business; in SouthAmerica, in India and also in Central and Eastern Europe,gross domestic product (GDP) growth is steady andmust guide our future development.What should be noted with regard to 2003 is, firstly, thecontinuing shift of the centre of gravity for steel towardeconomic regions that are more dynamic than WesternEurope and, secondly, the overall good health of thesteel industry as a whole. There were some mergers in2003 and more will follow.The consolidation of the industry is accelerating.Steel is one of the most widely traded commodities inthe world. It is a young, omnipresent product whosemultiple applications demonstrate its adaptability and itsmodernity in many areas of use. Infinitely recyclable, it isan environmental product that is perfectly adapted tothe needs of our time.In a word, the Group is in good health thanks to thecommitment and motivation of everyone involved, proofpositive that our employees believe that our products,our business and our Group have a bright future.6ANNUAL REPORT ARCELOR 2003