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ArcelorMittal Europe – Flat Products

Online client newsletter | September 2018

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Building a sustainable Ilva

Matthieu Jehl, CEO ArcelorMittal Italy Cluster

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In July 2017, ArcelorMittal signed an agreement to acquire Italy’s largest steelmaker – Ilva – from an insolvency administration overseen by the country’s government. After more than a year of negotiations with the Italian authorities, the European Commission, and employee representatives, I’m pleased to say that ArcelorMittal has now finalised every aspect of the transaction – the last one being the agreement with unions - and we expect to formally take responsibility for the business on 1 November this year.

Ilva represents an amazing opportunity for ArcelorMittal, our customers, and the people who work for the company. For ArcelorMittal it means that we can bring one of Europe’s strongest steelmaking assets into the Group. Customers get a local and reliable supplier of advanced steels with an outstanding logistics and support network. And Ilva employees will benefit from long-term, secure employment with the world’s leading steelmaker.

Significant investments to turnaround the business

It’s no secret that Ilva has had many troubles over recent years, and addressing these issues is ArcelorMittal’s priority. We have committed to spend €2.4 billion on capex by 2023 to revive Ilva’s industrial capabilities and commercial performance, and to urgently address the environmental performance of the business. But we need to get the basic things right first.

ArcelorMittal already has the technical expertise we need to quickly transform the business. With this in mind, we will establish a new R&D centre in Taranto to focus on process and product improvements. These are also the first things we need to achieve a quick change in Ilva’s performance.

ILVA is a fully integrated network

Environmental plan most ambitious ever

To help us in that process we have the most ambitious environmental plan ever for a steel mill. We have earmarked €1.15 billion to ensure Ilva’s facilities exceed best available technology (BAT) standards and set new benchmarks for our industry.

Work has already started on a cover for the raw materials area which will significantly improve air quality for the local community. In total, nearly 178,000 square metres (equivalent to 28 football pitches) of the Taranto mill yard will be roofed to reduce dust emissions. A project of this scale has never been implemented before and will become a reference for ArcelorMittal and the steel industry.

Matthieu Jehl,
CEO ArcelorMittal Italy Cluster

A solution for every employee

We reached an agreement with Ilva’s unions on 6 September and as part of that agreement there is a solution for each one of Ilva’s existing 13,800 employees. 10,700 will be offered jobs with us immediately. The remainder will either stay on with Ilva’s extraordinary administration to carry out environmental remediation work or will enrol in a voluntary separation scheme. Any workers under the extraordinary administration who do not have alternative employment arrangements when the scheme winds up (between 2023 and 2025) will be offered employment with us.

Customers to benefit from stable steel supplier

The turnaround of Ilva is going to take a huge effort, particularly for our new colleagues at Ilva who will shortly become part of the ArcelorMittal family. But under ArcelorMittal’s ownership and stewardship, and with our experience and deep expertise, the business turnaround and upside potential at Ilva is significant. It’s a challenge I know we can meet and a successful outcome will benefit us all.

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