Rob Slagel: Giving an update on the aluminum mill project
Published 12:00 am Wednesday, August 10, 2022
Many of us have heard the recent news regarding Steel Dynamic’s (www.steeldynamics.com) investment in the aluminum mill project proposed for our area in Ashland, Kentucky.
If Time magazine were a local magazine rather than a national publication, then, for better or for worse, Craig Bouchard, the original CEO on the project, would probably make Time’s “Person of the Year” because of the attention that this project has garnered in the Tri- State.
Honestly, the reason that this project received so much attention by our community is because producing metals was the lifeblood of the Tri-State for decades. Many of those steel producing jobs have disappeared in our area, yet many of our skilled, anxious-to-work craftsmen, and offspring of those craftsmen, remain.
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Because the project has been so high profile in the Tri-State area of Ohio, Kentucky and West Virginia, and because I have been somewhat close to the project since it began, I feel like it is now time to outline how things have unfolded, and where the project stands today.
I’ll write this outline in three parts: Braidy, Unity and Steel Dynamics.
The Braidy project was “for real.” It was not a way to “scam” our area or to “scam” the Commonwealth of Kentucky or intentionally give our citizens false hope.
Bouchard and his team had a real business model that made a lot of sense and was much needed in the metals industry and needed as part of the supply chain of America. That is why Craig was able to attract so many smart, well-educated, seasoned professionals in the aluminum industry, as well as other professionals.
Many of those people believed so much in the Braidy model that they gave up successful, lifetime careers to join Braidy and move their families to Ashland. Some of those wonderful people are still in our area working on the project and they bring a lot of social value and social diversity to our community. I know a number of these folks personally and they have given our community a “touch of class” that we did not have a few years ago.
Did the Braidy leadership get “out over their skis” a bit? Yes, in my opinion.
Did the Braidy leadership not anticipate how long it would take to pull together funding for such a massive project? I think so.
Remember, this was the first greenfield aluminum mill to be built in the United States in over 40 years. So, obviously, they did not have a model to go by. Did any of these employees of Braidy or Unity intentionally come to town to deceive the community, or the Commonwealth? No way.
About two years ago Craig Bouchard was removed as CEO of Braidy by its board of directors. The board then hired Don Foster as a contract CEO. Don came to town and jumped into the project of trying to save the faltering startup.
Quickly, the name of the project was changed from Braidy Industries to Unity Aluminum. Don brought with him decades of very successful work experience and fantastic contacts in the steel industry. Don stepped in with a lot of hard decisions to make to keep the project afloat.
The team that Braidy had assembled had a lot of very competent people on it. Although some of those folks, given their skill sets, were probably on staff “prematurely,” given where the project was in its advancement at the time that Don took the reins. Once Don got the project temporarily stabilized, he dusted off his Rolodex and began marketing to potential investors in this project with the contacts that he had — some of those in the steel industry.
If it had not been for Don Foster and the employees that he selected to stay behind and help, this project would have certainly died like many locals thought that it already had.
Don had a number of great contacts from his days in the steel industry and some of those contacts worked for Steel Dynamics, which, by the way, is the third largest steel producer in the United States.
Steel Dynamics recently launched a press release announcing that they had committed to buy 94 percent of the Unity project. Their press release had to be carefully worded and approved by the Securities and Exchange Commission (SEC) because Steel Dynamics is a publicly-held company and Wall Street has very strict rules when it comes to public announcements regarding mergers and acquisitions.
Steel Dynamics was somewhat limited by what they could and could not divulge in that release due to the SEC rules and the “quiet period” required by the SEC.
One of the things mentioned in this press release is that the former Braidy/Unity proposed plant location in Boyd/Greenup County, Kentucky, was not large enough for the new project and that a new site would be selected “somewhere in the southeastern United States.”
I do know that is true and I also know that the decision of where the new plant will be built has not yet been determined by Steel Dynamics. I want to see a project site selected by Steel Dynamics that will allow for the absolute best and most efficient plant performance, regardless of which state Steel Dynamics selects for the location.
You can bet that the leadership of such an esteemed metals company will select only the most appropriate site for this venture.
In summary, the Braidy project had exhausted its financing sources; had it not been for the board hiring Don Foster and Unity stepping in and getting the project on life support, it would have been dead a couple of years ago.
Steel Dynamics stepping in and recently agreeing to buy the project saved all of the project investors (many being local), including the Commonwealth of Kentucky, the probability of losing their investment.
As of today, we do not know where the new aluminum mill will be built, but, regardless of which site is selected, you can bet that the new site selection will be based upon sound business parameters; a location that will give the new mill and its employees the brightest future.
The fact that a world class company like Steel Dynamics bought the project tells me that the founders of Braidy had a great idea pursuing the new aluminum mill.
They just underestimated what it would take to raise the capital that they needed to get it off of the ground.
Robert Slagel is president, CEO and Owner of Portable Solutions Group headquartered in Wurtland, Kentucky.