Steel Products

ArcelorMittal Announces $3 billion Savings Plan

Written by Sandy Williams

Written by: Sandy Williams

ArcelorMittal outlined a new management savings target of $3 billion by the end of 2015 by improving the reliability, productivity and energy efficiency of its blast furnaces and mills and shifting to low-cost U.S. gas. The company has already streamlined a number of assets though an aggressive restructuring plan in the last fiscal year, especially in its European operations. The idling and closing of facilities, which led to a 7 million tons reduction of its European production capacity, is expected to yield $1 billion per year in savings.

The company hope to expand its market by around 15 percent to achieve an EBITDA per metric ton of $150—a strong recovery from its drop to $87 per metric ton last year. Chief Financial Officer Aditya Mittal, said the improvement is achievable through market expansion and a rise to 95 million tonnes in global shipments.

ArcelorMittal is counting on its mining division, Brazilian steel operations and automotive steel business to drive profitability as well as an improvement in global steel demand. Lakshmi Mittal, Chairman and CEO, expects to be able to capture 40 million tons of demand recovery from Europe and North America over the next five years and foresees margins improving as fixed costs spread across the greater tonnage.

The company plans to reduce its net debt to $15 billion before planning additional capital expenditures.

ArcelorMittal also announced receipt of $810 million as the first installment in its sale of a 15 percent interest in ArcelorMittal Mines Canada, for $1.1 billion, to a consortium led by POSCO and China Steel Corporation.

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