Why Pramod Mittal Gets Angry

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Mumbai, January 4:: they turned their attention to India, the lending institutions fell over each other to back them.

Somewhere along the way, Laxmi Mittal broke away and took with him all the profitable overseas companies, leaving behind the Indian projects - Ispat Industries, Ispat Metallics and Ispat Profiles - that were in various stages of implementation - to Pramod and Vinod.

Ever since, Ispat has been in continuous trouble with its lenders, who did not once reassess the group’s financials after the severance of the profitable businesses. The Ispat website tells the story. 1985: A star is born with the emergence of Nippon Denro Ispat (now known as IIL) as the largest manufacturer of Galvanised steel products in the private sector, proclaims the milestone section followed by a few more entries, which end abruptly at 1998 after the launch of its “global-scale integrated steel plant”.

It is after this that the institutions finally turned tough. Global steel prices had begun to dip well below the $400 per tonne at which viability of the projects had been calculated. Prices sank as low as $180/tonne and even today, after the recovery, prices are at $230. Yet, Mittal gets away.

In 1997, Vinod Mittal had boasted to a business paper that the head of Nucor Corporation, a US steel firm that has introduced cutting-edge technology, had told him: “Mr Mittal, we are learning from you”. Mittal had said, “We will let our new hot strip mill do the talking.” Today, there’s only a grim silence.

Yet, Pramod Mittal, a non-resident Indian who conducts most of his business long-distance with bi-monthly visit to his Indian business empire, is furious when asked about the delays in building his latest plant. “Did I know India was going to make a nuclear blast at Pokhran?’’ he asks. The company blames the delay in the second phase of its project on the refusal of the International Finance Corporation, Washington DC, to disburse $122.5 million of the $130 million sanctioned to it.