World's leading steel company, operations in over 60 countries, largest steel-roll producer in Ukraine

U.S.-Ukraine Business Council (USUBC), Wash, D.C., Friday, June 11, 2010

WASHINGTON, D.C. - ArcelorMittal, the world's leading steel company, with operations in more than 60 countries including Ukraine, has been approved for membership in the U.S.-Ukraine Business Council (USUBC), the executive committee announced today on behalf of the entire USUBC membership of over 120 companies and organizations who have business operations, investments or other development programs in Ukraine.

With an industrial presence in over 20 countries spanning four continents, ArcelorMittal covers all of the key steel markets, from emerging to mature. ArcelorMittal is the leader in all major global steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology, as well as sizeable captive supplies of raw materials and outstanding distribution networks.

In 2009, ArcelorMittal had revenues of $65.1 billion and crude steel production of 73.2 million tonnes, representing approximately 8 per cent of world steel output. The company has their world headquarters in London.

The huge Ukrainian steel company Kryvorizhstal was acquired by ArcelorMittal for US$4.8 billion in October 2005 following a public auction in Kyiv organized by the Ukrainian government led by President Victor Yushchenko.

Kryvorizhstal, subsequently renamed ArcelorMittal Kryviy Rih, is the biggest steel-roll producer in Ukraine, specializing in the manufacture of long roll, particularly rebar and rod, with annual steel production of 7.7 million tonnes and more than one billion tonnes of iron ore resources. The company has over 50,000 employees in Ukraine.

Despite the challenging economic conditions of 2008-2009, ArcelorMittal Kryviy Rih proved resilient and was able to meet its commitments to various stakeholders, including its employees, investors, suppliers, and the government of Ukraine.

In 2009 OJSC “ArcelorMittal Kryviy Rih” sold 727 thousand tons of metal products on the domestic market, down 42% on 2008. Given the difficult economic climate, the company cut prices twice during the year – in April and in May – in order to maintain domestic demand.

The outlook for 2010 remains mixed with a stronger recovery in developing countries, lead by China, With the domestic market depressed, greater emphasis has been placed on reaching export markets. In 2009, exports reached 83% of total sales. ArcelorMittal Kryviy Rih supplied 61 countries during 2009.

In terms of cash flow, the most crucial issue in Ukraine for the past two years had been the significant delay in VAT refunds by the government of Ukraine. Furthermore, the build-up of non-refunded VAT has continued in 2010, adding around another 200 million UAH ($25 million) each month.

Jean Jouet, CEO, ArcelorMittal Kryviy Rih, said on June 1, 2010, "The non refund of Value Added Tax (VAT) was and still remains the main issue for Kryviy Rih. VAT receivables due from the state budget to OJSC “ArcelorMittal Kryviy Rih” have gone above $300 million, which is a tremendous level that creates cash management issues. Recovering the VAT that is owed is vital to the future of the company and our ability to renew and expand maintenance and investment programs."

The U.S.-Ukraine Business Council (USUBC) has been working closely with ArcelorMittal officials in Washington, D.C., and in Kyiv, Ukraine concerning the very serious VAT refund issue as explained by Jean Jouet, CEO, ArcelorMittal Kryviy Rih.

ArcelorMittal representatives, together with officials of some large agricultural commodity exporters and USUBC have attended a series of high-level meetings in Washington and in Kyiv. The top priority in 2010 for USUBC and its members who export a variety of products from Ukraine such as steel and agricultural commodities has been the VAT refund issue.

"USUBC is very pleased to have ArcelorMittal, the world's leading steel company and the largest steel producer in Ukraine, as a new member. USUBC looks forward to working with ArcelorMittal to improve the business climate in Ukraine and for the expansion of their work in Ukraine," said Morgan Williams, Director, Government Affairs, Washington Office, for the SigmaBleyzer Private Equity Investment Management Group, who serves as President of USUBC.

Williams said USUBC has been working closely with Neil Messick, Vice President, Government Relations, ArcelorMittal Americas, Washington, D.C., who will represent ArcelorMittal on the USUBC board of directors.

In 2009 the company paid 1.008 billion UAH to state and local budgets and met its commitments to the state social funds in full. It accounted for 40% of the tax revenues for the year of the city of Kryvyi Rih. OJSC “ArcelorMittal Kryviy Rih” has no arrears in terms of salary payments and in 2009 the company spent 176 million UAH on social projects such as rest homes and children’s summer camps.

On June 2, 2010 the management of the ArcelorMittal, ArcelorMittal Kryviy Rih and Siemens VAI companies jointly announced the launch of the construction of the first Continuous Casting Machine (CCM) at the ArcelorMittal Kryviy Rih plant.

Jean Jouet, CEO, ArcelorMittal Kryviy Rih: “By signing this contract and taking this decision to start building our first CCM we are not only sticking to our investment obligations according to SPA, but we also demonstrate our strong will to modernize this plant and turn it into a modern technologically advanced facility. CCM is needed to meet the best international practice and the customer requirements.

For this project we’ve selected a supplier with a proven global reputation and strong presence in Ukraine. It is also important that 80% of works on this project will be sourced locally, from companies in Kryviy Rih and Dnepropetrovsk region. This is a positive thing for local economy since we invest in the future: our investment will generate activity on the local level.

Construction of the CCM is a key part of the company’s modernization program as well as one of its investment obligations according to the sale and purchase agreement. This project will include construction of all related infrastructure and facilities - electrical substation, water treatment plant, de-dusting unit etc. The project capacity of the new CCM will be over 1.2 million ton of steel per year. Target date of start-up of CCM is September 2011.

Launch of the CCM will mark transfer of the enterprise to more efficient and more sustainable production with numerous technical advantages:

• Energy saving i.e. gas, water and electrical energy: 10% energy saving in steel production per ton of steel.
• Increased product quality: the ladle furnace gives the possibility to clean and alloy the liquid steel and to produce a bigger range of product qualities.
• Increasing the labor safety: less manual work and higher degree of automation ensure safer working conditions.
• Environmental friendly: 10% reduction of emission per ton of billet in steel making.
• Better yield, higher availability, higher degree of automation and maintenance friendly: 10% better yield, 90% availability.

Volodymyr Makarenko, Project leader and a company veteran with 39 years of experience said: “Introducing this new technology has numerous advantages comparing to the one we are currently using: better steel quality, better yield, modern automated production that eliminates the share of manual labour.

We’ve been dreaming about this technology as early as in the 70th of the 20th century. The first feasibility study was done in 1985. For different reasons this technology was not implemented back then and I am happy to witness this dream come true today.”

Arnaud Poupart-Lafarge, Executive Vice President, ArcelorMittal (CIS and Africa countries): “We are bringing today to ArcelorMittal Kryviy Rih not only the engineering knowledge of such reputable company as Siemens VAI, but also the experience of ArcelorMittal, which is operating CCMs in all of its plants in the world. ArcelorMittal Kryviy Rih will continue in the future to benefit from the transfer of unmatched steelmaking knowledge and experience of ArcelorMittal Group”.

Additional information about ArcelorMittal Kryviy Rih can be found at

One-Hundred Twenty Members, July 2010, Membership in January of 2007 was 22.
The complete list of USUBC members can be found at:


[1] Anders Aslund, Senior Fellow
Peterson Institute for International Economics, Washington, D.C.

[2] Ariel Cohen, Ph.D, Senior Research Fellow
Allison Center for International Studies,
Davis Institute for International Studies,
The Heritage Foundation, Washington, D.C.

[3] Keith Crane, Senior Economist
Rand Corporation, Washington, D.C.

[4] James Greene, President
Effective Engagement Strategies, LLC, Washington, D.C.
Former Head, NATO Liaison Office Ukraine

[5] Anatoliy Kinakh, Head
League of Industrialists and Entrepreneurs of Ukraine
Member of Parliament of Ukraine, Kyiv, Ukraine

[6] David Kramer, Senior Transatlantic Fellow
The German Marshall Fund of the United States
Washington, D.C.

[7] Leonid Kozachenko, President
Ukrainian Agrarian Confederation (UAC), Kyiv, Ukraine

[8] William Green Miller, Senior Policy Scholar
Woodrow Wilson Center, Washington, D.C.
Former U.S. Ambassador to Ukraine

[9] Steven Pifer, Senior Fellow
The Brookings Institution
Senior Advisor, Russia & Eurasia Program, CSIS, Washington, D.C.
Former U.S. Ambassador to Ukraine

[10] Dr. Edilberto Segura, Partner, Chief Economist
SigmaBleyzer Private Equity Investment Group
Chair of the Advisory Board of The Bleyzer Foundation, Kyiv, Ukraine

[11] Keith Smith, Senior Associate
Europe Program, Center for Strategic and International Studies (CSIS)
Former U.S. Ambassador to Lithuania, Washington, D.C.

[12] William B. Taylor, Jr., Vice President, Peace & Stability Operations
United States Institute of Peace, Washington, D.C.
Former U.S. Ambassador to Ukraine

[13] Damon Wilson, Vice President
Atlantic Council of the United States, Washington, D.C.

[14] James Wilson, Director
EU Ukraine Business Council (EUUBC), Brussels, Belgium


For Year 2010 (

[1] Margarita Karpenko, Managing Partner
DLA Piper Ukraine LLC, Kyiv, Ukraine

[2] Michael E. Kirst, Regional Vice President
Central/Eastern Europe and Russia
Westinghouse Electric Company, Brussels, Belgium

[3] John R. Miller, Director,
International Business Development, Europe, Israel, Sub-Sahara
Raytheon International, Inc., Arlington, VA

[4] Dr. Irina Paliashvili, President and Senior Counsel
RULG-Ukrainian Legal Group, P.A., Washington, D.C./Kyiv, Ukraine

[5] Andrew A. Pidgirsky, Chairman, Board of Governors,
Ukrainian American Bar Association (UABA), Houston, TX

[6] Samir B. Sahgal, Director, International Operations
Washington, D.C. Operations, The Boeing Company, Arlington, VA
Treasurer, USUBC

[7] John F. Steele, Director, International Government Affairs
Eli Lilly and Company, Washington, D.C.

[8] Vanessa Stiffler-Claus, Director, International Affairs
John Deere Public Affairs Worldwide, Washington, D.C.

[9] Patrick H. Sweet, President
Sweet Analysis Services, Inc. (SASI), Alexandria, VA

[10] E. Morgan Williams, Director, Government Affairs, Washington Office
SigmaBleyzer Private Equity Investment Group, Washington, D.C.
Chairman, Executive Committee, USUBC, President/CEO, USUBC

[11] Van A. Yeutter, Vice President, Corporate Affairs
Cargill, Washington, D.C.

[12] Jack I. Heller, Attorney at Law
Heller & Rosenblatt, Washington, D.C.
Legal Counsel, USUBC