Luxembourg-based ArcelorMittal, the world's largest steel producer, has issued its Annual Report for 2009, with the company CEO calling it the most challenging year since the creation of ArcelorMittal.
Commenting on the effect of 2009 on ArcelorMittal, company chairman and CEO Lakshmi N. Mittal pointed out that the fundamental issue for ArcelorMittal was a total drop of 50 percent in steel demand, further exacerbated by a period of considerable de-stocking throughout the steel supply chain.
Stating that the agility to respond quickly to changing circumstances was crucial during these tough times, Mr. Mittal said, "Cutting production approximately 50 percent at the worst point of the crisis was unprecedented and very painful. However, it accelerated the required de-stocking period and also resulted in fixed cost savings of $9.4 billion. Out of this, sustainable management gains savings reached $2.7 billion by close of the fourth quarter of 2009, due to industrial optimization."
ArcelorMittal's revenues dropped to $65.1 billion and net income dropped to $0.1 billion in 2009, as SteelOrbis previously reported through the company's 2009 financial report.
Against the backdrop of the iron ore price negotiations which are expected to result in a price hike of as much as 40 percent, Mr. Mittal said, "In 2009, our self-sufficiency was 64 percent in iron ore and 21 percent in metallurgical coal, although these numbers also reflect the impact of significantly lower steel production during the year because of the crisis."
Delivering his forecasts for 2010, Lakshmi N. Mittal said that he is more optimistic for the year ahead. "Looking ahead to the remainder of 2010, I am certainly more optimistic than I was 12 months ago. The crisis has been very difficult for all of us. But it has also acted as a catalyst to make many positive and necessary changes that will see us emerge as a stronger, leaner and more robust organization," he pointed out.