Arcelormittal Executive Summary Essay

1150 Words Nov 9th, 2012 5 Pages
ArcelorMittal is a steel and mining company with a global presence in more than 60 countries. It is a leader in major global carbon steel markets such as automotive, construction, and household appliances to name a few. It is the combination of Arcelor and Mittal Steel, the latter being the origin of the present company.
Mr. Lakshmi N. Mittal, Chairman and CEO of ArcelorMittal, started in the steel industry by building his first steel plant in Indonesia in 1976. This would form the beginning of Ispat International, while also establishing its parent holding company, LNM Group. In the 1980’s, still a minor player in the steel industry, Mittal looked to a new potential raw material source, DRI (Direct-reduced Iron). This had immense
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dollars) compared to 5,919 in 2009. The company also has various credit facilities and programs to accommodate liquidity needs. One credit facility has a borrowing capacity of 11.3 billion along with a commercial paper program that extends an additional 2.7 billion. Because ArcelorMittal is a holding company, it depends on its subsidiaries’ earnings, cash flows, and any dividend distributions to meet its expenses and debt service obligations.
Current assets as of December 31, 2010 were 42,675 compared to 32,807 in 2009. Increase in current assets is mostly attributed to assets held for sale and distribution which amounted to 6,918. With the board’s approval, on December 7, 2010, ArcelorMittal successfully spun off its stainless steel business into a separate company now known as Aperam so it can develop its niche business and create value. ArcelorMittal’s largest current asset is inventories valued at 19,583 compared to 16,835 in 2009. The large stock of inventories is due to slow demand during the 2008 economic downturn that has continued through 2010. Much of the company’s inventory has been written down to net realizable value due to a sharp decline in raw materials. It expects demand to steadily rise throughout 2011 and in the coming years as China has shown an insatiable need for steel as well as Brazil’s emerging markets. ArcelorMittal’s second largest asset

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