Overview

2016 was a year of important progress for ArcelorMittal.

Action 2020

Action 2020 is ArcelorMittal's commitment to structurally improving profitability and cash flow generation.

Governance

Good corporate governance is about compliance, continuous stakeholder dialogue and being a good corporate citizen.

Fact book

Details of our steel and mining operations, financials, production facilities and shareholder information.

Employees

18,380

Sales

6.3

(US$ billion)

Ebitda

872

(US$ million)

Steel shipments

10.8

(million tonnes)

Lost time injury frequency rate

0.37

(incidents per million hours worked)

Ebitda contribution to Action 2020

100

(US$ million)

Safety performance

LTIFR

incidents per million hours worked

Color #8B819E
X-axis LTIFR
2014 0.89
2015 0.62
2016 0.37
LTIFR

Severity rate

number of days lost to injury per thousand hours worked

Color #AA9E6E
X-axis Severity rate
2014 0.05
2015 0.04
2016 0.04
Severity rate

Injuries at an all-time low in Brazil

In 2016, our flat carbon sites in ArcelorMittal Brazil saw injuries fall to an all-time low. According to Ricardo Garcia, vice president for human resources and IT in the region, this is directly linked to a new initiative, Project Safe Behaviour. Determined to drive further maturity within a safety culture that had already achieved impressive progress, our Brazilian colleagues started with strategic meetings with the board of directors. They prepared strategies aimed at generating new preventive behaviours in the organisation, developing further a sense of individual responsibility through ‘ownership’, while also reinforcing collective behaviours. They re-evaluated the health and safety management system tools, developed a work plan, and set up new training sessions with a range of different modules for all managers and supervisors as well as the health and safety and human resources teams. The results? An LTIFR of just 0.12 in 2016, a 56% improvement over 2015, and the lowest in the group.

The value of trust and transparency in turbulent times

The challenges of severe recession and political uncertainty are not, of course, confined to steelmakers. Millions of people in Brazil and across the region are experiencing economic hardship and social disquiet, while many of the manufacturers and fabricators who make up our customer base are suffering from sharp falls in demand.

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Our success is intimately linked to theirs, and we are committed to playing our part in helping to build the recovery. Our reputation, and the trust in which we are held, are key to this commitment.

As a result of the ongoing investigations into corruption in Brazil, one of our stakeholders' biggest concerns is transparency in business conduct. Our track record is strong – we introduced our Code for Responsible Sourcing in 2007, we expect all suppliers to commit to this, and we help suppliers with training in their requirements.

We also carry out anti-corruption due diligence on local suppliers.

Our leadership in this field was acknowledged in early 2016 with an invitation to join a new national advisory group aimed at enhancing the business integrity agenda in the country. The respected corruption watchdog, Transparency International (TI), has established a framework for collaboration between business, the public sector and civil society to diagnose and develop a reform agenda for the country, in order to restore business integrity. ArcelorMittal was the first business in Brazil to agree a partnership with TI.

Achieving structural competitiveness

As part of our Action 2020 focus on costs, we have continued to optimise our operational footprint as well as drive down fixed costs across the business. Regrettably, this has meant the closure of one of our Point Lisas operations in Trinidad and Tobago; we’ve also reduced operations at two further plants, and reduced full-time employees in other parts of the business. We believe these changes were necessary for our business to remain competitive and, while difficult, we worked with employees and their representatives during the process, in line with our policies.

Investing in air quality

Air quality is a high priority for the communities who live and work close to our operations. Across Brazil, states are reviewing air quality standards, and we aim to comply with or exceed them.

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Addressing stakeholder concerns about air quality in Vitória is one of our highest priorities. Alongside investment in improvements, we need to keep our channels of communication open to those around us – and we are continually speaking with local communities and the authorities to find the best way forward.

Benjamin Baptista
CEO Flat Carbon South America

Invested in environmental improvement since 2014

100

(US$ million)

In Vitória, where we share a complex with other industries close to a city of two million people, the Brazilian government is investigating 'black dust', emissions that are associated with industrial activity in the region.

A State Decree of 2013 regarding air quality aimed to establish intermediate targets to reach air quality standards recommended by the World Health Organization. We are working together with the local environment agency to improve our process controls in pursuit of these standards.

Moreover, we have invested heavily in environmental improvements – around US$100 million just since 2014 – including an automated system in the coal yard to reduce dust from coal piles, and the planting of some 2.8 million trees in the area to reduce wind erosion. In 2016, we approved a US$26 million project to install dust bag filters at Tubarão, which will reduce emissions from our sinter plant by 90%, and emissions from the segment as a whole by 18%.

Learn more about Outcome 5.

At-a-glance: key progress against our Action 2020 objectives

Cost

  • Portfolio optimised with the closure of Point Lisas operations in Trinidad and Tobago
  • Fixed cost reduction plan saves $32 million in 2016 through measures including new maintenance contracts and reduced operations at two long steel plants
  • Further fixed costs savings in Argentina 

  • Coke rates for flat steel production optimised to reduce raw material inputs
  • Transformation programme targets productivity improvement

Volume

  • Flat Carbon business achieved record production, driven by exports
  • New rolling mill in Acindar, Argentina, to increase rolling capacity by 0.4 million tonnes per year for bars for civil construction

Product mix and customer service

  • Tubarão plant equipped to produce Usibor® high-strength steel for automotive industry
  • Increased focus on key industry clients and streamlined sales service
  • Investment in desulphurisation technology to improve quality
  • Acindar to optimise special bar quality (SBQ) production to focus on automotive and mining industries
  • Dedicated development team created to expand high-added value portfolio
  • Sales of high-grade slab steels expanded
  • Production of galvanised products increased

Outlook for 2017