← Good Bad Billionaire
Good Bad Billionaire
Lakshmi Mittal: King of steel
00:44:31
How Lakshmi Mittal built a steel empire and reshaped an entire industry
Loading summary
Transcript160 lines
- [00:00]
Simon Jack
This BBC podcast is supported by ads outside the uk.
- [00:06]
Lowe's Advertiser
Want Black Friday prices without the crowds? Lowe's gets it. Shop their early Black Friday deals and beat the rush. $99 is all you need to grab a select 7 foot pre lit artificial Christmas tree for the holidays. And don't sweat what gives to get dad. They have up to 40% off select tools and accessories going on now. That's how Lowe's celebrates Black Friday. Early selection varies by location while supplies last.
- [00:32]
Jacob Goldstein
This is Jacob Goldstein from what's yous Problem? Business software is expensive. And when you buy software from lots of different companies, it's not only expensive, it gets confusing. Slow to use, hard to integrate. Odoo solves that because all Odoo software is connected on a single affordable platform. Save money without missing out on the features you need. Odoo has no hidden costs and no limit on features or data. Odoo has over 60 apps available for any needs your business might have, all at no additional charge. Everything from websites to sales to inventory to accounting. All linked and talking to each other. Check out Odoo at o d o o dot com. That's o d o o dot com.
- [01:18]
Sing Sing
It's 1975. A 25 year old man rides in the back of a tuk tuk down a busy street in ind. He's on his first trip abroad, but his task isn't that exciting. He's there to sell off some land from his family's steel business. He knows he's here to carry out his dad's plans, but the more he starts to learn about the country and its steel markets, the more his mind starts buzzing. He takes out a pen and starts totting up numbers and sketching out a plan. Could he go against his father? He gestures to his driver to pull over at a hotel and runs inside and asks to use their phone. And this one decision will not only change his life, but an entire industry.
- [02:05]
Simon Jack
Welcome to Good Bad Billionaire from the BBC World Service. Each episode we pick a billionaire and find out how they made their money.
- [02:12]
Sing Sing
We take them from zero to their first million, then from a million onto a billion.
- [02:16]
Simon Jack
I'm Simon Jack. I'm the BBC's business editor.
- [02:18]
Sing Sing
And I'm Sing Sing and I'm a journalist, author and podcaster.
- [02:21]
Simon Jack
That man was Lakshmi Mital. He's been called the King of Steel and with good reason.
- [02:26]
Sing Sing
Yes, he didn't just build a business. He reshaped the entire steel industry.
- [02:31]
Simon Jack
He consolidated struggling mills across lots of continents. He built the world's largest steel company, ArcelorMittal and turned steel into a truly global business.
- [02:40]
Sing Sing
At his peak in 2008, he was worth $45 billion and he was the richest man in Europe.
- [02:47]
Simon Jack
And while he's known for his humble pastimes of yoga and swimming po when he does spend, he goes all out.
- [02:53]
Sing Sing
That's right. He bought what was then at the time Britain's most expensive home for 117 million pounds.
- [03:00]
Simon Jack
And his daughter's wedding, with a performance from Kylie Minogue no less, reportedly cost 55 million. That's more than the cost of William, Prince of Wales or Jeff Bezos and other our billionaires weddings at the time of recording.
- [03:13]
Sing Sing
He's an Indian citizen who lives in London, but his private jet often clocks over a thousand flying hours a year. That is a lot because for Mittal, the world is still his factory. Factory floor.
- [03:23]
Simon Jack
So let's go back to the beginning to understand a man who forged an empire one steel beam at a time.
- [03:34]
Sing Sing
Lakshmi Niwas Mittal was born on June 15, 1950 in a small desert town in Rajasthan, northern India. Now he was named after the Hindu goddess of wealth and he's the eldest of five children and he spent those early years in a modest house shared by 20 family members. That is quite a lot of family at the time. His hometown in Rajast lacked running water. It didn't have steady electricity. This was a reality for parts of rural India at the time and his son Aditya once joked that Lakshmi even rode a camel to school, revealing just how remote his hometown really was.
- [04:08]
Simon Jack
The Mittal family belonged to the Marwari community, traditionally business minded group of people known for their entrepreneurial spirit. His granddad worked as a commodities broker and his father, Mohan Lal Mital, began in oil trading in the 1940s before running a steel mill in the 1950s. His father, like many Mari men, worked in Kolkata while Lakshmi, his mother and siblings stayed behind in Rajasthan.
- [04:32]
Sing Sing
When Mittar was around six, the family reunited in a first floor apartment in a poor suburb of Kolkata. Mittal remembers being woken up at 5am when the city's trams began and rattled past his window. He was having to wade through water to get to school when the streets flooded.
- [04:46]
Simon Jack
There aren't actually that many details about what Mittal was like as a child. Tim Bouquet and Byron Auzi's book Cold Steel, which we've used as one of our sources for this episod, says Mittal was a diligent and above average student, but also shy and introverted. But this is quite an interesting insight. He apparently scratched on the back of his school ruler, Dr. Niwas Mittal, BCom, MBA, PhD. So he had big ambitions for his academic future.
- [05:13]
Sing Sing
I do not think I could have told you what a BCom, MBA or PhD was when I was that age.
- [05:17]
Simon Jack
PhD, maybe. Not the other two for sure.
- [05:19]
Sing Sing
No. Well, as a schoolboy, Mittal would head to the steel mill his dad managed. After class, he helped out in the post room. He'd soak up everything he could about how the place worked. And in 1963, when he was just 13, his father and uncle secured a government license to build their own steel rolling mill a thousand kilometers away in Andhra Pradesh. They called the company Ispat, which means steel in Hindi. And with the new mill so far away from home, Mittal would visit only during the school holidays, where he gradually learned the business.
- [05:48]
Simon Jack
Age 16, Mittal wanted to attend St. Xavier's College, a prestigious school in Kolkata with successful alumni like Mukesh Ambani, another billionaire we've covered on this podcast. And although Mittal had some pretty good grades, he struggled with English and the school refused to admit him. But determined, and this is the kind of thing we've come across before in these billionaires. Mittal promised to learn English in a year and turned up at the principal's office every day until they gave him a chance. By the end of that year, he got a distinction in his English exam and he graduated in 1970 aged just 19 with a Bachelor of Commerce BCom and with reportedly the highest marks the college had seen.
- [06:28]
Sing Sing
So he's already well on that way to getting all the distinctions he wanted on that ruler. And when Mittal went to collect his degree, the principal offered him a job teaching accountancy the very next day. But Mittel wasn't a fan of early mornings and the job started at 6am so he declined and instead joined the family steel business. There's a whole other universe in which Lakshmi Mittal, who didn't mind early mornings, is teaching accountancy at St. Xavier's College right now.
- [06:52]
Simon Jack
I'm probably not featuring on this program. By the early 1970s, the Mittal family still business was expanding rapidly as the demand for steel was increasing. This was to serve the Indian government's target for GDP, the economic growth of 5% per year. Now the family had moved into a large house affectionately called Mittal House in Alipur, one of Kolkata's most exclusive neighborhoods. And I think that GDP thing is really interesting here because like lots of our billionaires, some of them have been kind of in right place at right time. We're beginning to see the real emergence of India as an economic superpower which one day will probably overtake China, if not the US.
- [07:28]
Sing Sing
When he was 21 years old, Lakshmi Mitta walked into the Calcutta Club, a colonial era private members club for Kolkata's elite. His parents had arranged his marriage and he was there to meet his future wife, Usha Daumia for the first time. Usha was an economic student and her father, who worked in paper manufacturing and engineering, sat beside her. Afterward, Lakshmi joked to his family, he's a very smart guy, even if Usha is only a fifth as intelligent, I'll marry her. I mean, Usha said Lakshmi made her laugh and you know, it's a very funny quip. So the couple were engaged weeks later and they married that same year.
- [08:02]
Simon Jack
In 1975, Lakshmi Mittal's father sent him to East Java in Indonesia to sell some rice paddies they'd bought, intending to build a steel mill there. But the project had been plagued by bureaucratic hurdles, so his father wanted Lakshmi just cut their losses and sell up. So Mittal planned to complete the sale on his way to his first foreign trip, a holiday to Japan with some friends. This is where we found him at the beginning of this episode.
- [08:26]
Sing Sing
When Mitta arrived in Indonesia, he saw that steel was selling locally at strong prices. So he wondered if the stalled project could still be salvaged. He told the Financial Times the country was an oil based economy and had a good opportunity for growth. I was enthused by the possibilities. To ensure a solid profit margin, Mattel decided to build a mini mill instead of a traditional steel plant.
- [08:48]
Simon Jack
Now this may be a good moment to have a little dive into the steel making process, which will be helpful for this episode. Now traditionally, steel is made in what they call blast furnaces, as giant expensive structures that combine iron ore and coke, which is a kind of high energy coal. And they burn them at extremely high temperatures to produce molten iron. Now that liquid is then refined into steel using oxygen supply. But building this kind of setup takes years. It costs billions of dollars. I've been to a few of these things. They are massive concerns and once they're up and running the furnace, you can't really put them out. They'll burn them for years, decades even. And if you let them cool down, it's hard to start them again. So they are huge machines of industry.
- [09:34]
Sing Sing
Well, a mini mill works differently. So it uses what's called an electric arc furnace. And this melts scrap steel or direct reduced iron, which is known as dri, that is iron ore. Processed with natural gas to remove oxygen. None of this needs coke. Mini mills are therefore faster and cheaper to build than traditional plants. And they're much easier to scale up or down, depending on market demand. So they're much more flexible to operate. Mitto estimated that a mini mill like the one he wanted to build could cut production costs by as much as 50% compared to those conventional blast furnace operations that we were just talking about. So, big brain wave. He cancelled his Japan holiday, he called his dad to tell him he was going to stay in Indonesia and he was going to build this steel mill. Now, at this point in time, he is literally just 25 years old. That is really young to be managing what is essentially a huge construction project.
- [10:26]
Simon Jack
And also this is quite a pioneering process, this mini mill, this electric arc furnace. It's happening as we speak right now in some places in the UK where they're transitioning from these blast furnaces to these electric arc furnaces. So he's miles ahead of the game in pioneering this technology. And one of the other things about these mini furnaces, they use a fraction of the energy that a big blast furnace uses, and that's why they're becoming popular to bring down the energy bills, which are astronomical for steel making.
- [10:52]
Sing Sing
Still, this new mill outside of India was working for, you know, both father and son, right?
- [10:56]
Simon Jack
Yeah, exactly. In India, government regulations limited how much a private steel mill could produce. ISPAT only produced about 20,000 tons of steel a year. You know, a US steel mill will produce that in a week. So the Indonesian plant would allow the family business to scale up production without those limits that were imposed in India.
- [11:15]
Sing Sing
And, you know, Lakshmi had done this six year apprenticeship. He wanted to strike out on his own. I mean, albeit this was as an outpost of his family's business, which is where he learned the ropes. He told the Wall Street Journal, I always believed in doing something unique and I felt the opportunities for me in India were limited. That's really interesting. So you thought he had to get out of the shadow of his father's.
- [11:34]
Simon Jack
Company in order to succeed, which is quite common. You know, give me something to do, something with, a bit of independence. You go and run Indonesia fine, and it's like, great, I've got my own project, Right. To fund this new Indonesian mill, Isbat invested $2 million in equity. That's their own cash, a $3.7 million bank loan and another 1.75 million from a local Indonesian partner.
- [11:55]
Sing Sing
Yes. And they also made use of an Indian government scheme that refunded up to 85% of the cost of any equipment bought and then exported from India. So you know, they' lots of money from all over the place here and.
- [12:06]
Simon Jack
Always rinse the subsidies you can get. That's another one. Particularly in highly regulated industries there's always a tap that's spitting out government subsidies of some kind or another.
- [12:14]
Sing Sing
That's a good tip for any would be billionaires listening in.
- [12:17]
Simon Jack
Yes, exactly. Now this Indonesian project was built in phases. It took a while to be profitable. Mittal told the Daily Telegraph In 2006 I went through great hardship and had to subsist on $250 a month. Now to put that in context, average wages and cost of living in Indonesia in the 1970s, difficult pinpoint. The average wage in the US at that time was around $720 a month. So billionaire living on what? 60 bucks, 50 pounds a week. Very different lifestyle to the one he enjoys now.
- [12:48]
Sing Sing
Oh very, very different. But you know, luckily his family was there with him. Mittel's wife Usha and a newborn son Aditya joined him in Indonesia straight away. They didn't speak the language, they didn't have any extended family around them and Mittel was always at the steel mill. So his wife and his baby would travel with him to and from the plant in the family's secondhand every single day. And Usha and later Aditya soon became really familiar with the workings of the steel plant and it later on paved their way for them to be included into the business.
- [13:18]
Simon Jack
To feed the plants, Mittal shipped in cheap semi finished steel, rough steel from Taiwan and DRI direct, reduced iron and that came from a plant in Trinidad and Tobago. He was very hands on boss. He knew how to operate the machinery, he talked to the line workers and he later said he still likes to sit with his workers in the canteen because that's where you find the sole and the pulse of a company. I wonder if the workers are so thrilled to have their boss in the canteen with them. I always know when the boss thinks I just want to hang out with you guys, I don't want to go. Rolls our eyes and say please go away.
- [13:49]
Sing Sing
Yeah. And everyone starts talking about how much they absolutely love working in the company. It's such a brilliant job. Well, in 1978 after three years of hard work, the steel plant finally generated a profit of a million on $10 million worth of sales. So although his company was still part of the family business and his exact salary at this point isn't actually known by the late 70s or early 80s, it's likely that Lakshmi Mittal was a millionaire.
- [14:17]
Simon Jack
Well done, Lakshmi Mittal. Now, let's take him from a million to a billion. He spent the 1980s running and improving that Indonesian steel plant. By 1989, the mill was producing around 300,000 tons of steel a year. Impressive for a mini mill, but small fry compared to the output of traditional big steel plants. He's now 39 years old. He's a father of two. He realized he did not have the time to build more plants from scratch. So he decided he would go on a buying spree, buying up existing plants.
- [14:50]
Sing Sing
Now, just to set the scene. By the late 80s, steel production in the west is stagnating. Demand for cars, for appliances, for construction materials, it had plateaued. So with demand leveling off, many nationalized steel plants were losing money and they were being flogged off to private companies. So take, for instance, British steel, nationalized in the 1960s and after years of underperforming, was finally privatized in 1988.
- [15:13]
Simon Jack
Yeah, British Steel lurched from crisis to crisis during that period. Lakshmi Mittal, however, saw an opportunity. He thought the demand for steel would rise again, especially in the economically developing world. China, India, Indonesia is a very good example too. So he bet on this dri, this direct reduce iron that he'd been using at his plant in Indonesia. And he was right to do that because they use this either DRI or scrap metal, as their feedstock. Rather than making steel from scratch, you feed in scrap or this already treated DRI stuff. And Mital predicted that the scrap prices, because it's being used to feed into these new type of steel mills, the prices for that scrap would rise sharply. And so dri, he believed, would be a more stable feedstock. What you put in the front end of the process for the future.
- [16:01]
Sing Sing
Now, remember, Mittel had been importing this DRI from a plant in Trinidad and Tobago. That plant was very close to going bankrupt. Now, it was owned by the Trinidadian government and it was being run by a German management company. The government there had put the plant out for competitive tender. It was trying to sell it off. And Mittal reportedly told the Trinidadian politicians, your company is losing $10 million a month. Give me the management and I will pay you 10 million every month. Very attractive deal. He also requested the opportunity to buy the plant outright on favorable terms if it ended up performing well. So they agreed to the deal.
- [16:36]
Simon Jack
Cue some savage cost cutting. When Mital took over the Trinidadian plant, it reportedly employed 60 German managers. That cost them 20 million in wages and management fees. Mattel replaced them with 60 Indian managers who cost just $2 million, a tenth of the price. As well as cutting the overheads, he also invested $10 million in new equipment, cutting edge equipment to remove bottlenecks in the production line. And after three months, production had doubled. Within a year, the plant was profitable. Now that's kind of a really impressive turnaround. That's the kind of thing that some of our billionaires do. They take existing assets and make them run better, sometimes with some savage cost cutting, sometimes by getting in cheaper labor. Labor. Whatever he did, it worked.
- [17:17]
Sing Sing
Yeah. In 1994, Mittel purchased the plant for 70 million in cash and a pledge to invest another 74 million over three years, which was a low price for a steel mill. And he also bought up struggling government owned plants in Mexico and Canada. You know, the UK with British steel wasn't the only place that was struggling at the time to like flog off these plants. He told the Financial Times. We never had to pay much for them, but the sellers were always happy to sell for them. They were good deals. They were happy to leave the companies to someone else to operate. Because a government running a plant, that's actually a massive endeavor, right?
- [17:49]
Simon Jack
Yeah, they don't really want to do it. By the mid-1990s, though, relationships within the Mittal family were starting to become a little strained. Mittal's father felt his eldest son was moving too far and too fast with the international expansion and wanted ISPAT to stay Indian based. Previously, as head of the family, Mittal's father had always attended merger and acquisition meetings as the family representative. But when ISPAT set up a meeting to buy the Canada plant in 1994, Lakshmi was there on his own, attended Indian instead of his father. And the Economist reported that Mittal's advisors were encouraging him to raise his public profile to help secure more business, make him more recognizable. But his father told the publication, the day you go for a high profile is the day you begin to fail.
- [18:33]
Sing Sing
That's so interesting because I think, you know, in the billionaires that we've covered, it kind of splits down the middle. Right. Some people want to grow that personal brand, but then some people very much prefer staying in the shadows. I don't know which is better.
- [18:45]
Simon Jack
It depends, doesn't it? I mean, if you look at people like Richard Branson, it was all about the personal branding, wasn't it? And you, you look at people like Elon Musk, for example, be hard pressed to find a more identifiable business person on the face of the earth and he became a talisman for when it came to raising money. Others, as you say, like to sort of run things from the background. Who knows which is the best. But clearly the more traditional Mital senior was thinking that kind of tall poppy syndrome. Don't get too noticeable, don't grow too tall or people want to cut you down.
- [19:12]
Sing Sing
Exactly. In 1995 they ended up splitting the family business. Lakshmi Mittal took the international arm, ISPAT International and his younger brothers and father took Ispat, the India based company. Now reportedly the two halves of the Mittel clan did not speak to one another for at least two years.
- [19:29]
Simon Jack
We love them. We love a family feud on this show.
- [19:31]
Sing Sing
Yeah, we do love a kind of succession style Fallout. And Mittow's company came to refer to his father and brother's company as a competitor. Ouch. I mean eyebrows would have been raised at that. Now the Mittels themselves still haven't publicly commented on the split and this is what, 30 years ago. But the family, family did reunite eventually, which is nice for them. And Mittel told the Telegraph in a later interview, my father is the man I admire most. I really got inspired by his hard working, his caring for the family, guiding everyone.
- [20:00]
Simon Jack
I mean, what's your favorite one so far? We had the Ambanis, another Indian family had a massive split between the two brothers there.
- [20:06]
Sing Sing
That is true. I mean obviously the Murdoch family went through their own highly publicized split.
- [20:11]
Simon Jack
Yes. And also in, in this industrial space, David and Charles Koch had their differences. It's really interesting, isn't it? It's the kind of stuff that TV dramas are made of. So around the time of this breakup, breaking away from his family business, Mital registered his company in Rotterdam, but moved the company's head office and his family to London. By now his son Aditya was studying for a business degree, his daughter was still at school. And Mittal bought a house on a street in North London referred to as millionaires row for £6.7 million. 20,000 square foot, 14 bedrooms, 12 bathro bathrooms, glass elevator set in an acre of land. A rare amount of outdoor space for a London property. Ain't that true? He said he loved living in London because of its central location for business. But his non domicile status, I'll explain that in a minute. Also meant he paid no tax in the UK on his overseas earnings.
- [21:04]
Sing Sing
Yeah, it's like what attracted you to this London property? Was it the one acre of open space or the non dom status? You could Get.
- [21:10]
Simon Jack
So it's called non dom, non domiciled status and it means you can live in the uk, but for the purposes of paying tax on all your worldwide income, you're not in the uk, you're non domiciled. So any money you make in the UK from your UK operations, you have to pay tax on. But if you're making tons of money from the far reaches of the earth, you don't pay tax in the UK on those earnings. UK is not unique in this. Lots of other countries do it. It's seen as a way of attracting powerful, influential people who are wealth creators, who will find the UK a nice place to stay. And it has, you know, done very well for various estate agents, luxury goods merchants, although that status has been changed recently and it's actually pretty controversial. Do you want rich people in your country or do you want to tax them more? That is a very open and very live debate right now.
- [22:03]
Sing Sing
Yes. And it's become a real political football in the United Kingdom. Well, you know, at the same time he was moving into this lovely 14 bedroom property in 1995, he was still buying steel plants up. He acquired more from governments in Germany, in Kazakhstan, in Ireland. He actually paid only one Irish punt or Irish pound for Irish steel. The national steel makers, although he had to take on their debt, which was.
- [22:26]
Simon Jack
In the millions now, by now he wasn't turning around failing plants by just cost cutting and funding technical improvements. With operations now in six countries, he was quite well positioned to tap into the most profitable international markets. For example, in 1992, his Mexican steel company exported over 60% of its output to Asia. When prices in asia collapsed in 1994, he had the tax to redirect the sales to the US market instead. So he's got a kind of international web of distribution so he can train his production at whatever is the most profitable market at that time.
- [23:01]
Sing Sing
So I think now might be a good moment to get more of a sense of how he was acquiring this many plants so quickly and in so many different parts of the world. Like, we need an insight into psychology now. He rarely reviews much about himself beyond the details of his business, but he did give Cold Steel author Tim Bouquet an insight into his thinking. This is a really interesting quote. He said, I want to up golf, started playing it every day. Then one day I was driving to the golf club and it worried me that I was becoming addicted, losing my focus, which I don't like to do. So I turned the car around and came home. I have never picked up a club since, I mean, that is quite the extreme move. You know, a guy can have hobbies, Lakshmi, but you know, those who worked with him have described him as not used to taking no for an answer and being driven, determined and unsentimental. I think that is a trait of nearly all of our billionaires.
- [23:49]
Simon Jack
You don't get many of our billionaires on this series who are basically soft and prepared to see both sides of an argument. They tend to be pretty hard nosed. Hard nosed and decisive. In 1997, Mittal floated or sold around 20% of Ispat International on the New York and Amsterdam stock exchanges. You sell their shares, you raise more money for global expansion. Now the people who look into these researchers, analysts were excited about ISPAT International with one Jeremy Fletcher from Credit Suisse First Boston, big investment bank. As was saying it was arguably the best steel company on the planet. The company had a value of roughly $3 billion and its IPO, its share sale was one of the largest in the steel industry in 30 years. And that was the year those IPOs give you a snapshot of what something's worth at any given time. They have to, because people have got to buy the shares. That year, Forbes estimated Lakshmi Matal's wealth to be $1.9 billion.
- [24:48]
Sing Sing
He's made made it Steel billionaires were few and far between at the time. One analyst said making 1.5 billion in steel is like making 50 billion on the Internet. And although he kept a low profile, you know, maybe he listened to what his father told him. Mittel's ambition was never in doubt. When he was told his company was the seventh largest in the world in 1998, he quickly answered, and why not the largest in 10 years?
- [25:12]
Simon Jack
That is some achievement to make that kind of money in the steel industry. The reason he was able to buy up a lot of these plants is because it was in secular long term decline. So actually making a profit in this business, which is in decline, I think is pretty, pretty remarkable. Hey, audiobook lovers. This week on the podcast I'm sitting down with musician, producer and walking encyclopedia Questlove. We're talking about Mark Ronson's memoir, Night how to be a DJ in 90s New York City. All right, like we talked about before, Mark Ronson found sanctuary in the DJ booth. What's a tool or piece of equipment in the studio or on stage that gives you the most control?
- [25:58]
Jacob Goldstein
So I have two microphones on stage. We have the microphone that you hear as the audience. Then we have a second microphone in which we communicate with each other each other. I feel like that second microphone kind.
- [26:10]
Simon Jack
Of saved all of our friendships.
- [26:12]
Jacob Goldstein
No, no band likes each other after.
- [26:15]
Simon Jack
20 years or 25 years. Like the Beatles broke up in seven and a half years and we're going on 35. Listen to earsay the Audible and iheart audiobook club on the iheartradio app or wherever you get your podcast.
- [26:37]
Lowe's Advertiser
Want Black Friday prices without the crowds? Lowe's gets it. Shop their early Black Friday deals and beat the rush. $99 is all you need to grab a select 7 foot pre lit artificial Christmas tree for the holidays. And don't sweat what gifts to get dad. They have up to 40% off select tools and accessories going on now. That's how Lowe's celebrates Black Friday. Early selection varies by location while supplies last.
- [27:02]
Jacob Goldstein
This is Jacob Goldstein from what's yous Problem? Business software is expensive and when you buy software from lots of different companies, it's not only expensive, it gets confusing. Slow to use, hard to integrate. Odoo solves that because all Odoo software is connected on a single affordable platform. Save money without missing out on the features you need. Odoo has no hidden costs and no limit on features or data. Odoo has over 60 apps available for any needs your business might have, all at no additional charge. Everything from websites to sales to inventory to accounting. All linked and talking to each other. Check out odoo@O-O-O.com that's o d o.
- [27:45]
Lowe's Advertiser
O.Com for period protection you can put on and forget about nothing beats Nick's Leak Proof Underwear, North America's number one leak proof underwear brand. Let's face face it, life can be unpredictable, but your leak proof underwear shouldn't be. That's why millions of people choose NYX for periods, for light leaks, for everyday freshness. NYX undies are super comfy, super absorbent and made to handle whatever your day throws at you. Day two of your period covered your daily run. No problem. That big sneeze? You know the one? Yup. We've got you. And with styles like bikinis, boy shorts, thongs and high rise plus sizes from extra small to 4 XL Knyx makes it easy to find your perfect fit. Say goodbye to stretch, stress and leaks and say hello to undies that work just as hard as you do no matter the leak. Find the style and level of protection you want@nyx.com and use code FLO15 for 15% off. That's K-N-I X.com code FLO15 for 15% OFF. Nick's for your leaks, for your life.
- [28:54]
Simon Jack
So let's take him beyond a billion.
- [28:56]
Sing Sing
In 2002, he found himself in the news when he admitted to paying 125,000 pounds to the Labour Party just before the UK's 2001 general election.
- [29:06]
Simon Jack
Remember this?
- [29:07]
Sing Sing
Just weeks after Mittel's donation, Prime Minister Tony Blair wrote a letter to the Romanian government supporting Mitto's bid to acquire the state owned steel plant Cydex. It was at the time Romania's second largest employer and the plant accounted for nearly 6% of the country's GDP. So this acquisition was a big deal. He ended up buying it for 50 million. But many Romanian opposition politicians were outraged, saying that the value was up to five times more. This was a really big scandal at the time.
- [29:35]
Simon Jack
The thing that really made the newspapers is because this whole episode sparked what was called the cash for favors row in Britain. Tony Blair, Prime Minister at the time, argued he was helping a British company. Then journalists pointed out that Mital's holding company for his business was register in the Dutch Antilles, which is in the Caribbean, employed less than 1% of its staff in the UK. UK company and the of a British steel company said Blair's lack of due diligence on Mital's company was a deliberate slight on the UK steel sector. So bad feeling all round. Mittal and Blair denied all allegations of any connection between the donation and the letter. Mittal would go on to donate to the Labour Party again £2 million in 2005 and again in 2007.
- [30:17]
Sing Sing
2004 was an expensive year for Mittal. In April, he paid? 70 million for a new home for his family, Kensington Palace Gardens, known as Billionaires Row. So, you know, he stepped up from Millionaires Row up to a billionaires.
- [30:30]
Simon Jack
I used to walk my dog right past all of these things. There's a whole bunch of them all in a row as you can see from, from Kensington Gardens. And yeah, they are massive. You know, these huge opulent things. They have their own security guard. You can't just drive in at the front, but you can see it from the park.
- [30:44]
Sing Sing
So yeah, you can just about walk your dog past them.
- [30:47]
Simon Jack
Yes, exactly. I always imagine the billionaires are out there with their binoculars looking at the.
- [30:50]
Sing Sing
The plebs, looking at the little people walking their golden retrievers. So interestingly, this mansion was actually owned by another billionaire, Bernie Eccleston.
- [30:59]
Simon Jack
We've done him.
- [30:59]
Sing Sing
Yeah. So the 12 bedroom home had Turkish baths, a ballroom, a swimming pool inlaid with precious stones. And pillars made from marble from the same quarry as a Taj Mahal. I mean, talk about knowing how to spend that money. And then just months later, it was his daughter's wedding. So another big payout coming up.
- [31:16]
Simon Jack
Yeah, a modest flower fair. Invitations were sent out in silver boxes to a thousand guests. Kylie Minogue performed with fireworks near the Eiffel Tower. And one of the celebrations over the six days took place at the palace of Versailles. It reportedly cost at least $55 million. Matal said at the time. All these figures are speculation. Any father would want to give his daughter a very special day, and who can argue with that? But the Guinness Book of Records claimed it was the most expensive in the world at the time.
- [31:44]
Sing Sing
I mean, this was an interesting one though, because I think that this was the first ever private gig that Kylie Minogue ever did. Now the private pop star concert is a huge industry and this was also the first time Versailles had ever been hired for a private event because obviously it is a national monument for the French people.
- [32:01]
Simon Jack
Yeah, well, this is Lifestyles of the Rich and Famous, isn't it? But by 2005, the steel industry was still fragmented, but two companies were pulling ahead.
- [32:10]
Sing Sing
Yes. So one was Mittal Steel and the other was a company called Arcelor, which was the world's most profitable steel company. And that was a combination of three former state owned steel plants in France, Spain and Luxembourg, which were helmed by a Frenchman called Guy Dolly.
- [32:25]
Simon Jack
Yes. Oslo's leadership had long feared a takeover attempt from the thrusting and ambitious Mittal. They even prepared a secret defensive strategy codenamed Project Tiger, in which Lakshmi Mittal referred to as Mr. Moon and his son Aditya as Adam.
- [32:40]
Sing Sing
What secret code name would you like to have?
- [32:43]
Simon Jack
Thor.
- [32:44]
Sing Sing
Thor. Okay, I'll be Odin then. Thor in Odin.
- [32:49]
Simon Jack
The aim of Project Tiger was an interesting one. It was to buy up strategically important steel companies, expand global reach, boost share value, thereby making itself too expensive to afford to acquire. In January 2006 though, Mittel launched his hostile takeover bid for Arcelor with an opening for bid of £12.7 billion. So about in today's money, about $16 billion.
- [33:13]
Sing Sing
Soon after that opening bid, Dolly, who was the chief of Arcelor, was interviewed on radio in France. Now he was quoted saying Mitta Steel was a company full of Indians offering Monet de Sange a French term for worthless currency. The phrase literally translates as monkey money, which carried a racial overtone that didn't go unnoticed. Mittal said at the time, they're all emotional comments. I know Guy Dolly and he's a very nice gentleman. I respect him and I admire him. But later added, it was very sad. We are not used to these kinds of comments in today's age. Mittel faced fierce resistance from Arcelor's board and pushback from politicians across Europe. And to many, Mittel's takeover wasn't just a business deal. It was a threat of global finance coming in and stripping control from a cornerstone of the national economy.
- [34:02]
Simon Jack
Yeah, and that is really interesting because there's lots of talk about steel is considered a strategic industry and to lose control of it is considered one of those things you don't necessarily want to do because in times of trouble, steel is obviously used in the defense industry a lot. Can you make your own tanks? Can you make your own planes? Can you make your own nuclear submarines? These are the questions that come up. So it's seen as a sovereign asset, which is why these kind of things become super sensitive.
- [34:27]
Sing Sing
That's so interesting. So it's not even that steel is just a kind of emotional touch point for a lot of people, people, you know, whose families may have grown up working in steel mines and steel manufacturing.
- [34:38]
Simon Jack
There's a bit of that. It's geopolitical, geopolitical as well. Do you want to be a country which can't make its own steel even if it's losing money? It's something we want to hang on to because it has strategic value.
- [34:48]
Sing Sing
Well, Mitto said there were reports of him sipping champagne while flying in for negotiations. So clearly there's a little bit of a PR move against him. Exactly. He said his team referred to these flights on his part as the pizza flight because that's all they had time to eat while working long hours on the deal. So try to push back on this idea of him being this champagne sipping billionaire coming in to wrest away a cornerstone of the national economy in France.
- [35:13]
Simon Jack
But he was determined and he won. After six tense months of negotiations, Mital's bid rose to nearly 18 billion pounds, just over $20 billion, and was accepted. And then in 2007, the merged couple company Arcell and Mittal, biggest steel company in the world at that time, was born.
- [35:31]
Sing Sing
After the merger, it became the first steel producer to manufacture over 100 million tons of steel annually. That is a lot. It was three times larger than its nearest competitor. It controlled about 10% of the global market. And that same year, Lakshmi Mittal was ranked the fifth richest person in the world and the richest resident of Britain.
- [35:51]
Simon Jack
100 million tons of steel. And annually, just for comparison's sake. The entire UK produces around 5 million tons of steel every year. But soon after the merger, there were some serious issues with one of the Group's assets. In 2007, it was reported that 90 workers had died since 2004 while working in Mittal's coal mines in Kazakhstan amid some long standing accusations of poor labour and safety standards. A spokesperson for Arsala mittal said that $260 million had been invested in the mines and a further 63 million was planned. The company also pledged to install more methane detectors so you can tell what's going on underground.
- [36:27]
Sing Sing
But then in October 2023, over 40 people died after a fire broke out at one of Arsalan Mattel's coal mines in Kazakhstan. The fire was thought to be caused by a methane blast and the accident prompted the Kazakh president to ask Arsalan Mittal to leave the country. Aditya Mittal, that's Lakshmi Son, now the CEO of Arsalo Mittal said in a statement. STATEMENT it's little consolation to say that the company expended considerable effort, further reinforced since 2020 in improving the safety performance of the operations in Kazakhstan. Now, by December 2023, the Kazakh government had bought out the Arslon Mittel subsidiary at the cost of almost 300 million, which resulted in an $800 million hit.
- [37:09]
Simon Jack
So basically they were forced to sell it to the government there at a big loss of nearly a billion dollars. It is no consolation to say that mining and steel making is a dirty, dangerous business. But clearly you can do a lot to mitigate those risks. Some will say they did not do enough. They would say that they have invested to try and mitigate those problems. For many years Arsilan Mittal was the biggest steel producer in the world, but they've seen a decline in output in recent years driven by volatile markets, divestments like the Kazakhstan. When we just spoke about intensifying competition, as of 2024 it is now the world's second largest steel producer behind a company from guess where.
- [37:54]
Sing Sing
I'm guessing China.
- [37:55]
Simon Jack
You got it in one, it's worth saying in this point, since that merger of Arsenal and Matan, the share price initially went up very strongly and that's when he was one of the richest people in the world and the richest person in Britain. But since then some of the these competition issues I've talked about, like particularly from China, the share price is down. In fact it's lower than it was at the time of that actual tie up between Arsler and Mital. So he's still Very rich. But the steel industry has proved even harder to make a living in than it was on his rise and it's something that all countries companies are grappling with. There is simply an oversupply of mainly Chinese steel in the world looking for a home which is undercutting prices at rapid the world.
- [38:39]
Sing Sing
But what's the latest on the man himself? Are there any personal updates from Lakshmi Mittal's personal life?
- [38:44]
Simon Jack
Do you remember we talked about those non dom, the people who live in the UK but don't pay tax in the UK on their overall earnings. That regime has seen a crackdown from this government and the last actually. And there are rumors that he may move his tax residence out of the UK.
- [39:01]
Sing Sing
Yeah in May 2025 Bloomberg reported he's bought $100 million home in Dubai which.
- [39:07]
Simon Jack
Is where a lot of the non doms who leave the UK UK go and set up shop. What we do now is we take our billionaires and we judge them on a bunch of categories.
- [39:17]
Sing Sing
So the first category is wealth. You know we look at this through a ton of different ways like rags to riches, net worth, you know the rags to riches idea is this idea of how far have they come. So Lakshmi Mittal, born into a family of entrepreneurs, started out in his family's business. He did have a kind of leg up didn't he by working in the family biz?
- [39:37]
Simon Jack
Definitely working in a family bizarre business. And that was a family business that was well placed to capitalize on India's economic boom which happened over these decades. So yeah, right place, right time, had a leg in nevertheless did share a house of 20 family members in poor suburbs of both Kolkata and Rajasthan. So it's not as if he was born with a steel spoon in his mouth.
- [39:59]
Sing Sing
No, definitely not. I mean you know, net worth he's kind of at the time of recording he's worth 21 billion. And you know he does like to spend the cash. You know when he spends money he breaks records, you know, house, property, daughter's.
- [40:13]
Simon Jack
Wedding and bought one of the most expensive houses in London in history for wealth. He's up there, he's not entry level. He was the richest person in Britain, fifth richest person in the world at one point. His fortune has suffered a bit because the steel industry has suffered. But I'm still going to give him a solid seven.
- [40:30]
Sing Sing
Yeah, I think a seven out of ten. Although actually I'm going to bump him up to an 8 out of 10 because I do like it when the billionaires, the spending, the wealth, the Private concert with Kylie Minogue. I mean, that's billionaire stuff.
- [40:42]
Simon Jack
Okay, eight for you, seven for me. Controversy. We talked about some of those safety issues. Steel and mining are dirty and dangerous businesses. But as well as those Kazakhstan fatalities, a lab technician died in a fire and Ispat planted island in 2001. An official said his life could have been saved if the company had spent the £15,000 that had been recommended to be spent on improving safety. So that's quite a bad mark.
- [41:05]
Sing Sing
Yeah, I mean, in, in response, Lakshmi actually said that he personally believed that safety rules might not have been followed. And that plant later on closed and went into liquidation five months later.
- [41:16]
Simon Jack
Pollution from plants, of course. Steel is one of the most polluting industries in the world. The amount of energy that gets poured into this to heat it up to thousands of degrees centigrade. And both the carbon emissions and the fumes and stuff that come off it are a big problem. For example, there's one steel plant in the UK which for many years has been the single biggest carbon emitting entity in the entire country. Imagine all those steel plants all around the world. It is a dirty business.
- [41:41]
Sing Sing
It is a big problem if you care about the environment. I mean, other than that, obviously we've got that whole scandal over, you know, cash for favors. The political donations he made to Tony Blair. That letter that Tony Blair ended up writing to the Romanian government.
- [41:55]
Simon Jack
He insists the donation and the letter were not connected.
- [41:58]
Sing Sing
He's not a man who has avoided controversy in his time.
- [42:00]
Simon Jack
No, it's one of those things. How much is connected to the industry and how much could you personally lay at his door? I'm going to say middle of the pack here and get the. Give him a four.
- [42:10]
Sing Sing
Oh, that's.
- [42:11]
Simon Jack
Yeah, I think only because, you know, it's not like he's shafted his rivals. He's not an arms dealer, he's not a drug dealer.
- [42:17]
Sing Sing
He did fall out with his own family.
- [42:19]
Simon Jack
Yeah, that's, that's their own business.
- [42:22]
Sing Sing
Who hasn't fallen out with their dad and their brother at some point?
- [42:25]
Simon Jack
Over billion dollar empires. I'm, I'm going to give it a four for controversy.
- [42:29]
Sing Sing
I'll go a little bit higher to a 5 out of 10. Let's see if Lakshmi Mittal can redeem himself. We've got a category called giving back or philanthropy. Talking about how they've kind of contributed back to society.
- [42:41]
Simon Jack
Some quite good efforts here. £15 million in 2012 to the great Ormond street famous children's hospital. But then he withdrew a pledge to make a 180,000. So $200,000 donation to the London School of Economics after his daughter was refused a place. A spokesman for Mattel said it was malicious gossip, but the LSE stood firm.
- [43:04]
Sing Sing
Interesting.
- [43:05]
Simon Jack
Yeah. There was $25 million to Harvard for the Lakshmi Matalan Family South Asian Institute. And this, my favorite one, is actually he watched the Indian team win only one medal at the Olympics in 2004, so spent nearly $10 million to support Indian athletes to train for the 2012 Olympics. And they won six medals in that. But the scheme closed in 2014.
- [43:26]
Sing Sing
So if you want to win five Olympic medals, you have to spend about 9 million.
- [43:30]
Simon Jack
Yeah, $9 million. So that. That is one and a half million dollars per medal.
- [43:35]
Sing Sing
He's actually had a lot of, you know, donations to healthcare and research. He's given three and a half million pounds to Oxford University's vaccine research, sponsored a permanent professorship there. He gave 12 million to India's Covid response. So, you know, he's not ungenerous.
- [43:50]
Simon Jack
He's not ungenerous. But these numbers, when you stack it up against, what is he worth now? 21,000 million? $21 billion. You know, he's no Bill Gates and even people like Larry Ellison from Oracle, he's funding, you know, a billion here and a billion there for research institutes. I'm going to give him a. It's a nice smattering of philanthropy this. So I'm going to give him a four.
- [44:14]
Sing Sing
A Nice sprinkling.
- [44:15]
Simon Jack
Nice sprinkling.
- [44:16]
Sing Sing
Well, I mean, we've come up increasingly against billionaires who don't even share any kind of details of their philanthropy. So I feel like the fact he is relatively transparent, unlike some of the other billionaires we're now covering, I will give him maybe a 5 out of 10.
- [44:30]
Lowe's Advertiser
Okay.
- [44:30]
Simon Jack
And then Power and Legacy. We opened this episode by saying that he had helped reform an entire industry. And that is true. He is a reflection, I think, rather than necessarily a cause of a globalized steel industry. It used to be kind of a sovereign thing that countries did on their own. He came in and bought up these old decaying sovereign capabilities and put them together into an international micro empire. And so that is a. A big deal and has reshaped the industry. He's also been instrumental in changing the technology away from these big blast furnaces to these small mini mills which use less energy. I think always ask the question, would that have happened anyway? Maybe. But I think that Mital is a giant in this industry, so I would give him a I give him a good seven, I would say, for power and legacy in this industry.
- [45:18]
Sing Sing
Yeah. I have to say that until this episode, I didn't really think of steel as one of those industries that touched on so many things in politics, in kind of the environment, in even, you know, countries. National identities.
- [45:32]
Lowe's Advertiser
Yeah.
- [45:32]
Sing Sing
In defense, you know. So I think I'm going to bump up my initial assessment of it. I think I'd give him a 7 out of 10. Okay.
- [45:38]
Simon Jack
So Lakshmi Mital came from not so humble beginnings, but reshaped industry, is reshaping some of the technology and made a lot of money. In an industry where it is hard to make money, most people lose a fortune in the stealing industry. He made a fortune.
- [45:54]
Sing Sing
Yes. And I think, you know, for what he's done to steel and for the fact that, you know, he still built one of the biggest steel companies in the world, he probably is a big contender in the billionaire stakes.
- [46:05]
Simon Jack
Yeah. So is he good, bad, or just another billionaire? What do you think? Email goodbadbillionairebc.com or drop us a text or WhatsApp to 001916686, 1176, tell us what you think.
- [46:22]
Sing Sing
That's goodbadbillionairebc.com Or 0019176861176 and also don't forget to include your name because we may read out your message on a future episode.
- [46:35]
Simon Jack
We've had some feedback in on our episode on shipping magnate John Fredrickson. One of his former employees has got in touch someone who managed ships for Frederickson. He describes his time working for him as a fascinating period and Frederickson as a fascinating man. He says one thing about looking after his assets. Not a dull moment and absolutely no certainty about what might happen tomorrow. You have to be on the tips of your toes leaning forward. Not sure that's a good thing if you're captain of a ship, but there we go. Congratulations. Your podcast is excellent, says Captain Peter Cooney. And we say thank you very much.
- [47:06]
Sing Sing
Well, if you've ever worked for any of our billionaires and haven't signed an NDA, we would love to hear from you. Brandt from San Francisco Bay Area in California also got in touch to say I love the show. I've always had an affinity with the finer things in life. Saying Brent, that is watching MTV Cribs or just listening to multimillionaires and billionaires interviews. This show is an absolute favorite of mine. Thank you. He says John Frederickson is just another billionaire. He wanted to be rich and he did it with great expense, hard work, ingenuity, and not taking no for an answer. Those, to me, are the typical traits of a billionaire.
- [47:39]
Simon Jack
Thanks very much, Brent. Another listener says greetings from Nigeria. Nigeria, Greetings back from the. From the very first day I stumbled upon this podcast, I've been listening to it non stop, even going back to the very first episode. The information shared is incredibly informative and the explanations of financial terms are top notch. Thank you. Regarding the latest episode on John Fredrickson, in my opinion, he's a brilliant billionaire. Why? Because taking calculated risks is part of the journey. No risk, no glory. Fear only limits us. To survive in this world and achieve greatness, one must be an opportunist. And that's exactly what brought him to his wealth. Thank you from our listener in Nigeria. So who have we got next time?
- [48:16]
Sing Sing
So we have the American actor, a filmmaker, playwright, studio mogul, all around businessman and hustler. And also the guy who pioneered a famous drag character.
- [48:28]
Simon Jack
Yeah, it is Tyler Perry who went from putting on plays to an audience of one to becoming one of the most influential studio bosses in the US.
- [48:37]
Sing Sing
That's right, he's worth 1 billion. And he's made over 30 feature films and 1700 episodes of television. Talk about a work ethic.
- [48:46]
Simon Jack
And he got some of his business acumen from one of our other billionaires. No other than Oprah Winfrey.
- [48:50]
Sing Sing
So that's Tyler Perry on the next episode of Good Bad Billionaire.
- [48:54]
Simon Jack
Good Bad Billionaire is a BBC World Service podcast produced by Tamsin Curry. The researcher is Hannah Ramazani, the editor is Paul Smith.
- [49:01]
Sing Sing
And it's a BBC Studios production for the BBC World Service. As the commissioning editor is John Minow.
- [49:09]
Jacob Goldstein
This is the story of the 1. As a maintenance supervisor at a manufacturing facility, he knows keeping the line up and running is a top priority. That's why he chooses Grainger. Because when a drive belt gets damaged, Grainger makes it easy to find the exact specs for the replacement product he needs. And next day delivery helps ensure he'll have everything in place and right, running like clockwork. Call 1-800-granger. Click granger.com or just stop by Granger for the ones who get it done.