EAST CHICAGO, Ind., June 21 /PRNewswire-FirstCall/ -- "The foundation now
exists for the steel industry to create a sustainable business model that
should over time lead to a re-rating of the sector," said Lakshmi Mittal,
Chairman and CEO of Mittal Steel Company (NYSE: MT; Euronext Amsterdam) today.
    Speaking at the World Steel Dynamics Annual Steel Success Strategies
Conference in New York, Mr. Mittal said that the steel industry proved in 2004
that it has the ability to create considerable value.  Now the focus must be
to ensure that it can sustain this.
    Mr. Mittal highlighted two fundamental changes that have occurred in the
industry's dynamics in recent years.  "Firstly, global demand has entered a
new growth era, largely driven by China's industrialisation," he said.
"Secondly significant consolidation has occurred, leading to a stronger
industry."
    Mr. Mittal said that the biggest opportunity for GDP driven growth in
steel demand in the future would come from the "BRIC" countries.  "Provided
the economies of these countries continue to develop at the anticipated growth
rates, demand growth for the steel industry has the potential to continue at
around 3 - 5% over the foreseeable future," he said.
    Responding to concerns that given China's rapid expansion in its own
capacity, it may soon become a net exporter, Mr. Mittal said he is now less
concerned that the Chinese industry remains a threat having witnessed the
Chinese government's stringent control regarding capacity increase.  He also
highlighted that China is not a natural exporter of steel as it has a number
of weaknesses, including a dependency on iron-ore imports and high energy
costs, which make it difficult to argue the case for any long-term structural
advantage.
    He highlighted India as being a market of particular opportunity on the
basis of its large population and current low per capita steel consumption,
provided that the country pushes forward with its economic reform.  "The
growth opportunity is certainly there," he said.  "Good progress is being made
and GDP growth has been stepped up significantly in recent years, now within
sight of achieving the goal of 8% growth.  However the pace at which this
transformation is occurring needs to be accelerated and the government needs
to commit resources and energy into industrialisation and building the
infrastructure.  Provided such economic reform can be implemented there is a
strong possibility for India to continue to drive global steel demand growth."
    In order to take advantage of these sound fundamentals, Mr. Mittal said
that the industry must continue to move forward with consolidation.
"Cyclicality in the steel industry will never disappear in its entirety," he
said.  "Nevertheless it can and should be managed."
    He said better management of the supply chain would help address
cyclicality and that this would come with further consolidation.  "Today's
softening of the market is not due to any sudden drop in demand but due to an
inventory overhang situation created in the market.  This situation can be
better managed with consolidation of the industry."
    Mr. Mittal said good progress had been made towards consolidation,
particularly in North America and Europe where approximately 60% of the market
is now produced by the top five companies.  "Both of these markets have made
significant progress towards consolidation," he said.  "However the overall
industry is highly fragmented and needs further consolidation."
    He also said that companies must continue to think globally.  "The
consolidation trend has taken place on three continents, but to date it has
been largely regionally driven.  What needs to happen now is more global
consolidation."  He repeated his statement that he believes 3 - 4 companies
producing between 80 - 100 million tonnes need to emerge, with a footprint in
all the main global regions.  "The top ten producers should comprise at least
forty percent of total market share," he said.
    He also stated that for global consolidation to really accelerate, there
would also need to be an end to the nationalistic feelings that have
historically dominated the steel industry. "I would urge countries which have
not yet embraced privatisation of the steel industry to press ahead with such
reform and have confidence that it will bring many benefits to the country and
its economy," he said.
    Mr. Mittal said that whilst consolidation would be key to building a
sustainable model for the steel industry, it alone would not resolve the
historical problems.  "Consolidation will help the industry to better manage
supply and demand," he said, "But a change in management style and thinking
and a more market focussed approach is also required.  Management decisions
must be driven by long-term sustainability and not short-term profitability or
demand."
    Mr. Mittal concluded by saying that delivering on these fundamentals will
lead to the creation of a more attractive industry.  "The basic fundamentals
are in place to create a sustainable business model," he said.  "If we can
deliver, we have the opportunity to change the image of our industry to that
of a growth industry, managed for value by a set of truly world-class blue
chip companies, adding value to our customers and creating wealth for our
shareholders and the communities in which we operate.  I am confident that
with the right approach and commitment this can be achieved."
    For further enquiries or to request a full copy of the speech, please
contact:

     Paul Weigh, Corporate Communications
     Mittal Steel Company
     T: +44 20 7543 1172

    About Mittal Steel
    Mittal Steel Company is the world's largest and most global steel company.
The company has operations in fourteen countries, on four continents.  Mittal
Steel encompasses all aspects of modern steelmaking, to produce a
comprehensive portfolio of both flat and long steel products to meet a wide
range of customer needs.  It serves all the major steel consuming sectors,
including automotive, appliance, machinery and construction.
    For 2004, Mittal Steel had revenues of US$22.2 billion and steel shipments
of 42.1 million tons.  The company trades on the New York Stock Exchange and
the Euronext Amsterdam under the ticker symbol "MT".

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