Click to follow
It's Saturday afternoon at Lakshmi Mittal's London headquarters, and India's latest movie mogul is bleary-eyed. "I was up until one o'clock last night watching an Indian film,'' he explains, stifling a yawn. Mr Mittal's night on the town had begun with the launch of B4U, a satellite TV channel devoted to the "Bollywood" movies of Bombay, that starts beaming to Britain's film-crazy south Asian community tomorrow. With two friends, the 49-year-old entrepreneur has financed the venture - which is why he had been carousing past midnight with Bollywood legends such as former Miss World Aishwarya Rai and heart-throb Anil Kapoor, instead of unwinding at his mansion home on The Bishops Avenue, North London's "millionaires row".

So it comes as a surprise to learn the London-based Mr Mittal isn't that interested in the Bollywood scene. "I really don't watch a lot of movies," he confesses. Nor is his personal fortune - estimated most recently at pounds 1.2bn by Forbes magazine - based on a career in India's booming movie industry. "B4U is one of my private investments, and I really don't spend much time on it." He shrugs dismissively. "Steel is my strength."

You can say that again. What brings Mr Mittal to his Berkeley Square office at the weekends is a steel empire that stretches from Indonesia and Kazakhstan to the United States and Canada, taking in Germany, France, Ireland, Trinidad and Mexico along the way. "And I also have a processing line in Chatham," he adds with a flourish. Mr Mittal's Indonesian and Kazakh operations are private investments. His publicly quoted conglomerate, Ispat International (the name means steel in Sanskrit), covers the rest of what Mr Mittal proudly claims to be "the first global steel business".

In a decade, Ispat International has shot from nowhere to become the world's sixth largest steel company, with forecast shipments this year of 15m tonnes. But that thumping output isn't the reason behind the rave reviews which Ispat's chairman and chief executive has enjoyed from steel analysts. In a congenitally low-margin industry, he consistently turns the loss-making companies he acquires into profit machines. "Making $1.5bn in steel is like making $50bn on the Internet," says Scott Morrison, an analyst at Donaldson, Lufkin & Jenrette in New York. Mr Mittal has even earned a grudging thumbs-up from United Steelworkers of America, a union not famous for its praise of steel tycoons. Last year, Ispat finally secured an American foothold when Mr Mittal bought the Chicago-based Inland Steel Company for pounds 875m. An Indian boss in Chicago? "He obviously knows the steel business, so we don't care if he comes from Mars," says Mike Mezo, the local union rep.

Actually, says Mr Mittal: "I'm from Rajasthan, which is a kind of desert. Entrepreneurs come out of these conditions." Mr Mittal's family are Marwaris, a famously hard-working merchant class which dominates business life in distant Calcutta. Mr Mittal's father, Mohan, migrated to Calcutta soon after independence. Today, Mohan Mittal presides over one of India's largest corporate empires, with steel at the core.

So despite Lakshmi Mittal's scorched earth origins, he was never dirt- poor. He was educated at Calcutta's elite Saint Xavier's College, and at the age of 19 - having graduated top of his university class - went to work in the family steel firm. Seven years later, in 1976, Mr Mittal went to Indonesia. "Indian conditions were very suffocating for growth and development," he says. "It was just the beginning of Indian businessmen going abroad, and I got onto the same train." But, he adds: "Out of 10 who went out at the time, only one or two were successful."

Mr Mittal was one of them. With financial backing from his father, he founded Ispat's first overseas steel plant, and by the mid-1980s he was a serious international player. He championed "direct reduced iron", a steelmaking process which used iron ore rather than more expensive scrap metal, allowing Ispat to undercut global rivals. By 1988, Mr Mittal was ready to embark on a worldwide buying spree.

"I started acquiring other companies, because I did not have enough money to build and operate my own," he says. His first bargain was leasing a loss-making state-owned steel firm in Trinidad. And in 1992, Mr Mittal relieved the Mexican government of the country's third largest, massively indebted, steel producer for the knockdown price of pounds 137m.

In 1995, Mr Mittal made the big break with his father. The two tycoons agreed to separate Ispat International from the family's Indian businesses, a divorce which settled - at least to Mr Mittal's satisfaction - the question of whether he was his own man, or merely Mohan Mittal's son. The same year, Mr Mittal registered his company in Rotterdam and shifted corporate headquarters to London. "I love living here," he says. So is it Mr Mittal's palatial North London mansion which makes him feel at home, or his spacious Berkeley Square office, opposite a house where Clive of India lived? Mr Mittal says he likes London because "it's a very central place for my businesses".

That raises a fresh question: whether in moving to London, Mr Mittal has also cut loose from his Indian roots. Although he still carries an Indian passport, Mr Mittal hasn't lived there for more than two decades. Nor does he seem on the same wavelength as most Indians in Britain. Asked what he thinks of Prince Philip's ill-conceived "joke" that a fusebox looked "as though it was put in by an Indian", he is genuinely flummoxed. "Who?" he asks his assistant, before adding apologetically that he must have been travelling. Indeed, Mr Mittal reckons he averages only 10 days a month in London; the rest of the time he jets between Asia, America and Europe inspecting his global empire.

During his London stopovers he lives unostentatiously, if that is possible in a house called the Summer Palace. "I practice yoga, I love swimming, and I love spending time with my family," he says. His family are very much part of the business. Mr Mittal's wife Usha, a member of the Ispat board, keeps an eye on the privately-held Indonesian operation. His 24-year-old son Aditya, a graduate of Wharton business school in the US, is a finance director at Ispat working on mergers and acquisitions. And his 19-year-old daughter Vanisha will join the company when she completes her studies at the European Business School in Regents Park.

So what do the workaholic Mittals discuss around the breakfast table? Probably not their millionaire neighbours. "What I worry about all the time are the global economic conditions," says Mr Mittal. Like its competitors, Ispat has been hammered by an unprecedented industry slump, which has seen the global price of steel slabs fall around 40 per cent.

Yet the bulk of his empire is in surprisingly robust shape. You might think, for instance, that Ispat Karmet, the giant Soviet-era state enterprise which Mr Mittal bought from the Kazakh government in 1996 for pounds 250m, would leak money like a rusty bucket. Mr Mittal took on a bloated 85,000-strong payroll (since slashed to 65,000), which traditionally supplied steel on barter to other former Soviet republics. Yet an Ispat spokeswoman insists the business is "profitable".

Ispat International, the publicly-quoted company in which Mr Mittal retains an 80 per cent stake, last year registered net income of $237m on sales of $3.492bn. In the first two quarters of 1999, net sales reached $2.2bn, and the shares have bounced back from a low of less than $5 to around $12. "If there's going to be an upturn in the steel industry, Ispat are in the best position to gain from it," says Mr Morrison, in New York.

In the past, better established industry heavyweights tended to patronize him as an Indian junk artist who bought companies in parts of the world where no self-respecting steel man would venture. "It's not that we buy junk companies which others have rejected," he counters. "Every week I receive at least one or two [buyout] proposals, but I am not in a frenzy to buy."

Once Mr Mittal does take over a business, he moves fast. "The day you acquire a company, the meter starts," he says, chopping his hand on the boardroom table. "So you have to be ready to apply your business plan." So when Mr Mittal's troops march onsite, overheads are decapitated. At Inland, one of America's largest steel companies, Mr Mittal claims cost savings of $260m since he bought the business in July 1998.

Then, in a notoriously parochial business, Mr Mittal forces his companies to think globally. "We can pool resources from 10 countries and come up with a strong business plan," he says. That may not sound original, but in the steel industry, parachuting a purchasing executive from Mexico into Chicago - as Mr Mittal did recently - counts as a revolutionary move. "Mittal is fundamentally different from his peers," says Mr Morrison. "He sees steel as a global rather than a geographic industry."

So how has this essentially rootless tycoon got sucked into the very Indian razzmatazz of Bollywood? At B4U, the pre-launch publicity relates how Mr Mittal and his two London-based pals, businessman Gokul Binani, and film distributor Kishore Lulla, met last summer "on a yacht on the Mediterranean Sea, [and] the discussion gravitated towards Music and Cinema".

The trio spotted a business opening. Bollywood is booming among Britain's two-million south Asian community, with Indian-language films finding a new audience among second- and third-generation immigrants. There's even talk of these glitzy productions entering Britain's cinema mainstream. Taal (literally, Beat of Passion), whose Leicester Square premiere Mr Mittal attended, was No 8 in Britain's cinema audience league table during its first week on general release.

Mr Lulla holds the rights to that film, plus around 1,000 other Bollywood features. "So we decided to capitalise on this library," says Mr Mittal.

But even the ebullient Mr Lulla admits B4U faces "a rough ride", because two rival satellite channels exist in Britain. Zee TV, controlled by Indian media magnate Subhash Chandra, is the market leader, with Delhi- based Sony Entertainment Television (SET) entering the fray last year. Mr Mittal believes he can bring his heavy metal management skills to bear on the luvvies at B4U. "If you look at some of the other channels - we need to create a very different thing from what's happening there," he says. And if B4U fails to reach Mr Mittal's rigorous standards? Well, there's still a global steel business.

Long-term, Mr Mittal claims to have no interest in building the world's largest steel company. "Number one in size is not difficult, and it is not an ambition," he says. "The important thing for me is to create a world-class organisation which will be very entrepreneurial and professional."

So who will take over Ispat when Mr Mittal eventually retires? The finger points at young Aditya. Last December, forsaking his frugal reputation, Mr Mittal staged a four-day extravaganza in Calcutta to celebrate Aditya's wedding. The party got out of hand. "We held one of the functions on the terrace of the Victoria Memorial, which was very unusual for Calcuttans," he says. So unusual, that a politically-inspired riot broke out. "They burnt a few chairs, but it was nothing great," says Mr Mittal, who insists his guests didn't damage the Memorial.

Despite this unhappy end to the festivities, Aditya's wedding bash confirmed his status as the heir to the Ispat global empire. "If he can prove himself, he should definitely lead this organisation, " says Mr Mittal. "Surprisingly," he adds, inserting the tycoon's standard parental disclaimer, "he has been doing very well." So when might Mr Mittal decide to hand over to Aditya? Ispat's chief executive pauses for a nano-second. "I can diversify, I can grow another business," he says. "So I don't think I'll retire for some time."