Keith Busse’s Steel Dynamics
Casts Its Steelmaking
Future in Indiana
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Keith Busse’s Steel Dynamics Casts Its Steelmaking Future in Indiana
Recovering, competitive, vibrant — these probably aren’t the first words to come to mind when you think of the North American steel industry, but that’s exactly what it has become, says Keith Busse, president and CEO of Steel Dynamics. “The American steel industry is doing a much better job with technology and markets,” he adds. “It’s more vibrant and alive today than a lot of people would give it credit for.”
It’s so vibrant, in fact, that Busse and others were able to start up a new steel company in 1996 and began generating cash within four months of operation, “which is absolutely unheard of in this business,” he says. In its first year, Steel Dynamics totaled US$200 million in sales, $400 million the next year, $500 million in ’98, and in 1999 it tallied some $600 million in sales. Today, the company is building a second plant in northeast Indiana.
Evolving Steel
This new competitive North American market is growing in part because of the evolution of the industry, Busse explains. It was, in fact, the evolution that spawned Busse’s former employer, Nucor (soon to be the largest steel company in the United States), and later his own Steel Dynamics.
Abpve right: Keith Busse was one of the founding members of Steel Dynamics, which is enjoying great success in the new U.S. steel industry.
The steel evolution began after World War II when U.S. steel companies rebuilt the steel industries of Germany and Japan. What most U.S. steelmakers forgot to do during this time, though, was re-invest in their own facilities. Being the world leader in the industry, U.S. steelmakers “became preoccupied with dividends instead of re-investing in their future, and the industry lost its way,” Busse says. “We (in the U.S.) woke up 20-25 years later with an industry that was struggling to be competitive.”
Eventually, in the 1970s, amidst major economic woes, the U.S. steel industry began to invest billions of dollars to upgrade facilities, and by the late ’80s, it began enjoying new prosperity. Unfortunately, there was another evolution just around the bend — thin-slab casting, a new, more efficient technology for flat-rolled steels.
Not sure how shareholders would perceive the write-off of billions of dollars for now outdated technology, the U.S. steel industry again refused to update its processes. This left room for new companies such as Nucor to sprout. Nucor acted as the U.S. pioneer for the thin-slab casting technique, which was spearheaded by Busse. As Nucor’s success grew and competitiveness increased, so did the industry’s entrepreneurial spirit. Soon after Busse established Nucor’s thin-slab casting process, he and a few others left the company to start Steel Dynamics, which uses the same technique.
Booming Industry Means
New Plants in the Midwest
As the industry continues to evolve and competition heats up, new facilities are sprouting up, especially in the U.S. Midwest. Steel Dynamics, for example, built its first facility in Butler, Ind., and it is now building a new $260 million steel plant in Whitley County, Ind.
The new facility will make flat-rolled structural steel products for the construction industry. Flat-rolled steels, Busse says, make up more than half (70 million tons, 63.5 million metric tons) of the 130 million tons (117.9 million metric tons) Americans consume annually, and 40 million tons (36.3 million metric tons) are consumed within four states: Illinois, Michigan, Indiana and Ohio. Busse’s decision to locate a new facility in northeast Indiana was based primarily on this Midwest concentration of steel consumption.
“If you think of those states as a big dart board, and you want to throw a dart at the bull’s eye, northeast Indiana represents the center of the dart board,” Busse says. “We focused our efforts, first of all, on market opportunities, and then we looked at energy opportunities and transportation opportunities.”
The new plant will continue in the evolutionary process of the steel industry. By using new technology for both casting and rolling, “we’re going to do in one rolling mill what it used to take three rolling mills to accomplish,” Busse explains. “And after we get the mill built, we will probably push over a billion dollars in sales.”
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