SMU Community Chat

SMU Community Chat: Hybar’s ambitious plans as newest player in rebar

Written by Laura Miller

Hybar has big plans for entering the American steel market.

Although it is the newest player in the US rebar market, the startup is led by an experienced, nimble, and ambitious team, and backed by investors with deep pockets.

Industry titan and Hybar CEO David Stickler joined SMU Managing Editor Michael Cowden on Wednesday’s Community Chat to update the SMU community on the company’s first mill, and its grand plans for the future.

Ambitious plans

Having broken ground on Aug. 1, 2023, construction of Hybar’s first 630,000-short-ton-per-year rebar mill in Osceola, Ark., is well underway. With construction expected to last 22 months, Stickler said production will begin one year from now. His hope is that he’ll be able to use his favorite words for this project as well: “On schedule, under budget.”

Hybar’s plan includes building three rebar mills and then a flat-rolled steel mill. Stickler said the company is generally using the same group of investors, technology providers, and banks that helped to set up the Big River Steel mill (now a part of U.S. Steel) in Osceola, the Severcorr mill (now SDI Columbus), and other mill projects he has helped to establish throughout his career.

Those investors come with deep pockets to provide the necessary funding for a mill and a nice return on investment. Among them are Stickler’s Global Principal Partners (GPP), TPG Capital, KfW bank out of Germany, and Koch Industries. “Charles Koch, the ninth wealthiest individual in the world, we’ve invested with him now for close to 15 years,” Stickler noted.

Last year, Hybar secured $700 million in financing for the mill; $470 million is planned for the mill’s construction, with the remainder to be used for startup and operational expenses.

Site selection for a second rebar mill is currently underway, with the company considering the Pacific Northwest or Southeastern US. Stickler expressed his preference for South Carolina or Georgia but said Idaho or Washington state would be “OK” as well.

However, Hybar’s main focus at present is getting the Osceola mill built, started up, and cashflow positive, he said.

Hybar and technology provider SMS are designing the mill’s DC furnace so that it can run with 100% scrap, Stickler said. He’s not a fan of direct-reduced iron (DRI) due to the way it reacts in the furnaces; he said they’ll probably use 10% pig iron rather than HBI or DRI, until they can run it with only scrap.

While Stickler currently has a noncompete agreement preventing him from moving forward on a flat-rolled steel mill, Hybar still has plans to build a mill to serve that market, with a goal of also utilizing 100% scrap. “Now I might not be able to make the finest” steel, but getting away from the use of pig iron, DRI, or HBI, will put Hybar “miles ahead from an environmental sustainability perspective,” he noted.

Stickler commented that he is very interested in the technological dynamics playing out in the flat rolled sector right now, including endless strip production. He’s watching Steel Dynamics Inc.’s startup of its newest mill in Sinton, Texas. “I want to see how all this technology, kind of how it evolves,” he said on Wednesday’s chat. “I’m not afraid to copy somebody,” he added.

What keeps him up at night?

Stickler said a major thing keeping him up at night is the weather in Arkansas. “Until I get the roof on the building and get the lights on … I’m like a weatherman. What’s the first thing I do when I get up? I look at the goddamn weather report,” he said.

“On the other end of the spectrum, what keeps me up is how exciting this industry is,” he added, noting that the technological development taking place over the last 30+ years in the North American and global steel industry is invigorating. “This is cutting edge stuff,” he said excitedly.

SMU subscribers can watch a replay of the full conversation with Stickler on our website.

Also, don’t miss SMU’s next Community Chat on Wed., May 15, for some great insight on the flat-rolled steel market from Ryan McKinley, senior analyst at CRU. You can register here.

Laura Miller

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