Big River Steel is located on 1,100 acres in Osceola, Arkansas and, every day, turns the remains of old cars, refrigerators and other metal into 4,500 tons of hot-rolled steel.
David Stickler, the investment banker turned steel magnate, says that, “We view ourselves as a technology company that just happens to make steel,” (ref. Forbes). That’s because there’s a control room that overlooks the action on the floor where there’s a succession of scrap-filled buckets lined up ready to be melted in the 2,951 F furnace. In the control room, there’s a lone operator scanning a dozen LCD monitors displaying graphics representing data from thousands of sensors on nearly every piece of equipment on the floor of the 1.76 million square foot space in the flat-rolled steel mill. The mini-mill represents the “future of steel production on the planet,” (ref Forbes). The plant opened 31 months ago, financed by 1$ billion in high-yield-debt as well as private equity funding. Big River is the fastest-growing steel producer in North America. With only 513 employees its cash flow per employee is an astounding $557,000., as compared to U.S. Steel at $61,000. and mini-mill Steel Dynamics at $253,000. It takes only one hour for Big River to produce a 35-ton coil of hot-rolled steel, compared to days at other U.S. steel mills. Big River has already secured the financing to double its capacity to 3.3 million tons by the end of 2020. The company’s production workers earned an average of $120,000 last year and they enjoy a bonus system similar to Wall Street bonus arrangements. When a monitor flashes in the control room, there’s a recommendation for modification of the operating parameters. Stickler says that, ultimately, “The operators won’t have to do anything; the machines will adjust themselves.” He likens his mill to self-driving cars, saying that the more that the cars drive themselves, the more they learn. “The more the mill operates, the more it’s learning.” From his investment banking experience, Stickler ultimately formed Global Principal Partners, a steel-focused merchant bank, with two partners. After financing operations around the world, the partners decided that their next project would be a new state-of-the art electric mini-mill in the U.S.. Stickler explains that there was a revolution under way, with U.S. steel makers losing global market share. He seems well on his way to making an impact on that situation.