Big River Steel begins full-time production

by George Jared (gjared@talkbusiness.net) 509 views 

Arkansas’ first and to date only industrial superproject is in full operation, and officials hope it may lure an auto manufacturer to The Natural State. Big River Steel announced Wednesday (March 1) its $1.3 billion mill outside of Osceola near the Mississippi River is complete. Hundreds gathered at the opening ceremonies including Gov. Asa Hutchinson and former Florida governor and Republican presidential hopeful Jeb Bush.

“Big River Steel is officially open for business,” BRS CEO David Stickler told the crowd.

BRS is the most expensive industrial development in the state’s history. The plant employs 435 workers, but will employ at least 525 workers, Arkansas Economic Development Commission Executive Director Mike Preston told Talk Business & Politics. Those workers will earn an average of $75,000 per year, Stickler said. Construction began in the fall of 2014. It was built on a sprawling 1,300-acre tract. The state issued $125 million worth of general obligation bonds to help spur the project.

The facility is the first steel mill to be a Leadership in Energy and Environmental Design, LEED, certified based on its environmental sustainability efforts, and its energy efficiency performance. The mill will not only adhere to Environmental Protection Agency standards, but it will also comply with European environmental standards, which are in some cases much more stringent, Stickler said.

Bush the son of former President George H. Bush, and the brother of former President George W. Bush, mingled in the crowd, taking pictures and making small talk. Hutchinson spoke to Bush and stopped to take several pictures with him and well-wishers in the crowd.

“I’m delighted to thank everyone who invested in this,” Hutchinson said.

In January, the mill produced 63,000 tons of steel, an all-time record for a steel mill startup, Stickler said. The mill will produce about 1.65 million tons of steel each year. The company will also recycle about 2 million tons of steel per year. The scrap metal recycling plant combines the wide product mix and superior grade capabilities of an integrated mill with those of a more technologically advanced mini mill, or a “Flex Mill.” Integrated mills typically produce a broader range of products, can offer higher steel grades, and can make products from raw iron ore. Mini mills typically use state-of-the-art technology and produce products using scrap metal.

BRS will make steel for electrical component and automaker uses, officials said. Vehicles with heavier steel tend to be safer, while vehicles with lighter steel are more fuel efficient, Stickler said. BRS’s goal is to develop steels that meet the federal government’s safety and fuel standards better, he said. BRS along with Nucor Steel in Blytheville have made Mississippi one of the top steel producing counties in the country.

With two large steel companies in the state, it will make the pitch to an auto manufacturer easier, Preston said. Moving steel is a significant cost component for any automaker, and proximity could be a major asset for the state, he said. President Donald Trump announced Tuesday night (Feb. 28), he intends to spend $1 trillion on infrastructure improvements and those projects will require a lot of steel, Preston said. Preston wouldn’t say if there are any steel plant related industrial developments in the offing.

“It’s opened a lot of doors for us, but I don’t want to divulge too much,” he said with a smile.

Creating a more efficient electrical grid will be a top priority in coming years, Stickler said. Outdated electrical transformers throughout the country need to be replaced, better steels will make the process more efficient, he said.

Steel mills have one of the highest multiplier effects for any industry, and those effects are already being felt in the region, Preston said. Companies such as TMS International, Steel Warehouse Company, and Arkansas Recycling Services have invested more than $300 million and created 300 secondary effect jobs, Stickler said.

Koch Industries owns a 40% stake in the company along with Global Principal Partners (20%) and the Arkansas Teacher’s Retirement System (20%). Arkansas Teacher Retirement System Executive Director George Hopkins said he was intrigued when former BRS CEO John Correnti approached him about investing the fledgling company several years ago. Correnti died in 2015, before the plant was completed. The vision described by the former CEO to Hopkins still resonates to this day, he said.

“I thought to myself at the time (after the initial meeting), ‘this could be something special,’ … and now it is,” Hopkins said.

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