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Vijay Mahadevan

KAZAKHSTAN - Industry

The Long Game

CEO, ArcelorMittal

Bio

Vijay Mahadevan began working for the ArcelorMittal Group at the LázaroCárdenas (Mexico) facility, where until 2005 he was responsible for the sales and marketing of slab production. In 2006 he moved to ArcelorMittal Dubai as General Manager of Sales and Marketing, where he supervised the marketing of products from ArcelorMittal Temirtau and ArcelorMittal Kryvyi Rih. Since 2007, he has worked as Marketing Director for ArcelorMittal companies in the CIS region. Mr. Mahadevan has 22 years experience in manufacturing, customer support, sales, and marketing.

"As far as improvement is concerned, health and safety is one angle. The second is the augmentation of production."

How does ArcelorMittal’s experience in Temirtau reflect Kazakhstan’s economic progress in the past two decades?

ArcelorMittal moved into Kazakhstan in 1995 when we took over the steel plant in Temirtau and coal mines in the Karaganda region. We have seen a lot of progress ever since we came to this market, particularly in terms of industrial development in this region. There are several reasons behind this marked improvement. First of all, this country is blessed with lots of natural resources, particularly minerals, and the government is headed in the right direction to add value to these products and make it economically viable and sustainable in the long term. We have also invested quite a lot in our operations and benefited from the growth in this part of the world. In 1995, we were not a 4-million-ton company, as we are today. In all three of our focus operations, which are mining, steel making, and transforming steel into value-added end products, we are making a significant contributions to the country’s progress.

ArcelorMittal experienced increased steel production in 1H2011. To what extent is this due to post-crisis recovery, and to what extent do you see new demand?

This increase is partially due to new demand in Kazakhstan. Kazakhstan was one of the countries that anticipated the 2008 crisis. In 2007, we experienced financial issues and this government took some well-calculated measures. Due to these prudent policies, it was one of the first countries to emerge from the crisis. We still feel the positive impact of those decisions, which translate into a relatively stronger economic performance compared to other countries in the region. We are expecting GDP growth of around 7%, which is a high number. Therefore, fundamentally, growth has come to some extent from Kazakhstan. However, the per capita consumption rate for steel is low in this country, and thus a certain level of growth must also have come from the CIS region.

“As far as improvement is concerned, health and safety is one angle. The second is the augmentation of production.”

How do you to strike a balance between the installation of new production lines and the modernization of existing infrastructure?

We need new installations for growth, as customer requirements change. Additionally, we invest to improve efficiency and reduce costs. With respect to new products, we are launching long products. This mill has traditionally produced flat products. However, our investments are not limited to quantifiable indicators such as production volumes and efficiency. First and foremost, we have invested in health and safety, which is the prime focus for the company. As far as improvement is concerned, health and safety is one angle. The second is the augmentation of production. The third level is improving the existing product portfolio. As far as improving the quality is concerned, we have also invested in high value-added product lines and services. Lastly, distribution is an area in which we are investing. One other area that requires attention is ArcelorMittal’s prioritized efforts to comply with Kazakhstan’s environmental laws. In 2011, we completed the reconstruction of blast furnace 2 with state-of-the-art de-dusting and gas-cleaning equipment, installed electric dust filters at blast furnace 4, and launched a closed-circuit cooling system for coke gas. In 2012 we are working on the reconstruction of the gas cleaning system at the converters shop, which will eliminate a large portion of the plant’s air emissions. Our coal mines are also improving their environmental performance. For example, in early 2012 we launched a 1.4 MW power generator, which uses coal bed methane as fuel. Methane is also used as fuel for boilers to produce heat during the winter season.

What are some highlights from the company’s advancements in health and safety standards?

Health and safety is the top priority for the company. We are working on changing the mindsets of our people about health and safety. Ever since we started looking at the safety standards in developed countries, we have used them as our benchmark for ArcelorMittal Group and for our operations in Kazakhstan. We have brought down the frequency of fatalities and incidents over the years by focusing on individuals to ensure that they work in safe conditions. We have seen continuous improvement in the health and safety over the past years and in 2011 our steel and mining operations achieved a time-injury frequency rate of below 1, a historic low for Kazakhstan’s operations. There is still a long way to go, but fundamentally we are on the right track. For us it is not about the amount of money spent, but about raising awareness and changing the mindsets of employees to get across the message that their health and safety is important.

© The Business Year – March 2012

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