Page 24 - Forbes - Asia (October 2019)

ENTREPRENEURS

began operating only 31 months ago thanks to almost $1 bil-
Stickler says the
lion in high-yield-debt financing, a slug of equity from Koch Big River mill can
Industries, Arkansas’ teachers’ pension fund, private equi- outproduce the
most efficient plants
ty firm TPG Capital and the sheer operating zeal of a little-
in the world.
known investment banker named David Stickler.
“We view ourselves as a technology company that just hap-
pens to make steel,” says Stickler, pounding his fist on a table
for effect. Though tiny relative to North Carolina’s Nucor, Big
River is hands down the most technologically advanced and
fastest-growing steel producer in North America. With only
513 employees, its cash flow per employee amounts to a whop-
ping $557,000 compared to integrated producer U.S. Steel’s
$61,000. The next most efficient mini mill competitor, Steel
Dynamics, operates at $253,000 per employee. It takes just one
hour for Big River to produce a 31,751kg coil of hot-rolled steel
compared to days at an integrated steel producer.
Including bonus pay, the average Big River production
worker earned $129,000 last year, 3.5 times the median
household income in Arkansas’ Mississippi County. Big River
has already secured enough financing to double its annual
capacity to 3 billion kilograms by the end of 2020.
Back in the control room a monitor flashes, automatically
recommending a modification to the operating parameters.
“Ultimately, the operators won’t have to do anything. The
machines will adjust themselves,” says Stickler, 58, noting that
the information from his sensors is being transmitted to a in Asia, and in 1998 he raised $650 million to build a mill in
data center where an artificial intelligence system developed Thailand. Stickler also courted Nucor’s CEO, John Correnti,
by Noodle.ai and Dell runs predictive algorithms. Stickler who tapped him in 1999 to finance a restructuring of Bir-
likens his mill to a self-driving car. “The Google and Apple mingham Steel. In 2003, Correnti, Stickler and Li formed
cars, the more they drive, the more they learn. The more this Global Principal Partners, a steel-focused merchant bank.
mill operates, the more it’s learning.” Over the next decade, the firm raised some $6 billion
Stickler’s transformation from banker to steel company for numerous projects ranging from modernizing a mill for
CEO wasn’t planned. A Cleveland native and former accoun- China’s Tangshan Iron & Steel to SeverCorr, a Mississippi
tant, he spent 15 years as an investment banker, mostly work- mill it sold to a Russian steel giant in 2008. Correnti handled
ing on financing big steel, including the $385 million Bain plant operations, and Stickler and Li, the dealmakers, traveled
Capital used to launch Indiana’s Steel Dynamics. the world and maintained homes in New York, Los Angeles,
In the mid-1990s he met his future wife, Rebecca Li, a vi- Beijing and Thailand. Around 2013, Correnti and Stickler
vacious wellness consultant from China who was showing a decided that their next project would be a new U.S-based
friend Hawaiian real estate. Li helped him make connections state-of-the-art electric mini mill.

Steel

Cities

Three cities in
three continents
have shaped
steel manu-
facturing since Sheffield, England Pittsburgh, Pennsylvania Tangshan, China
the Industrial (1856 to late 19th century) (late 19th to mid-20th century) (21st century)
Revolution. Mass production began after 1856 By 1889, U.S. steel production exceed- China now produces more than
when Englishman Henry Bessemer ed Britain’s. Andrew Carnegie founded half the world’s steel.
patented a cheap, fast way to oxidize Carnegie Steel in Pittsburgh, which
molten iron to make high-quality steel. eventually became U.S. Steel.

22 | FORBES ASIA OCTOBER 2019