.png?lang=en-US&ext=.png)
ArcelorMittal Targets US$4 billion in New Cost Reductions
09/18/2008 - ArcelorMittal announces new Management Gains plan that targets USD 4 billion of cost savings over the next 5 years.
ArcelorMittal has announced a new “Management Gains” plan that targets USD 4 billion of cost savings over the next 5 years.
“Since our merger, we have improved our cost leadership due to our successful integration, our 2008 value plan and realization of merger synergies,” commented Aditya Mittal, CFO. “In order to further enhance this cost leadership, we have now targeted a further US$4 billion of management gains to be realized over the next 5 years.”
The company’s new plan is to focus on increasing employee productivity, reducing energy consumption and decreasing input costs to achieve a higher yield and improved product quality. In an investor-day presentation in London on Sep. 17, the company said that its main sources of gains would include continued improvement in operating practices; productivity gains and headcount reduction; reduced energy consumption; yield improvements through investment and best-practice operations; subcontracting and purchasing improvements; and raw materials cost reductions.
For Flat Carbon America, the investor presentation detailed specific investments and initiatives including PCI investments at Indiana Harbor, Cleveland and Hamilton; a reduction of slab purchases through investments at Hamilton; investment in co-generation and/or energy integration at various facilities; and reduction in employment costs through automation.
For Flat Carbon Europe, the presentation noted investments and initiatives including coke expansion and de-bottlenecking at Liege, Gent, Krakow, and Galati; new blast furnace at Gent to improve hot metal ratio; sinter plant productivity investments at Dabrowa, Krakow and Galati; and gas recovery and optimization at Liege, Gent, Bremen, Krakow, and Galati.
For Long Carbon facilities, the presentation included benchmarking and continuous improvement at various plants, productivity improvements, and rationalization, in addition to development of on-site power plants in Monlevade as well as South Africa.
The presentation also mentioned headcount reduction through voluntary retirement and natural attrition; optimization of global logistics through shared services; and reduction of selling, general and administrative expenses, primarily in Europe.
The presentation also mentioned headcount reduction through voluntary retirement and natural attrition; optimization of global logistics through shared services; and reduction of selling, general and administrative expenses, primarily in Europe.
ArcelorMittal is the world's largest steel company, with over 320,000 employees in more than 60 countries. The company leads a number of major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks. With an industrial presence in over 20 countries spanning four continents, the company covers the key steel markets, from emerging to mature. In 2007 ArcelorMittal had revenues of USD 105.2 billion and crude steel production of 116 million tonnes, representing around 10% of world steel output.
Through its core values of sustainability, quality and leadership, ArcelorMittal commits to operating in a responsible way with respect to the health, safety and well-being of its employees, contractors and the communities in which it operates. It is also committed to the sustainable management of the environment and of finite resources. ArcelorMittal recognizes that it has a significant responsibility to tackle the global climate change challenge: it takes a leading role in the industry's efforts to develop breakthrough steelmaking technologies and is actively researching and developing steel-based technologies and solutions that contribute to combat climate change.
