Confidence, perseverance and an entrepreneurial spirit. These were necessities for Keith Busse in 1993 when he set out to do something that had never been achieved in the United States for over a century. He set out to start a steel producing business, without any corporate banking. Not to mention, in an industry that was a shell of what it had been in the recent past.
Keith Busse and two of his colleagues, Mark Millet and Richard Teets, Jr. had gained valuable experience working for the steel giant, Nucor Steel. The three men collaborated on the possibility of starting their own steel mill. Having all worked in prominent roles with Nucor, they were supremely confident in their ability to run an even more efficient mill of their own. The only problem was the funding. It was unthinkable for any bank to invest in them without any preexisting financial credentials.
They began to lay out the plans for their future plant, adding up the costs to build the mammoth facility. They decided they would need approximately $300 million to begin construction. Amazingly, they were able to raise the money through private investors and investment firms and by fall of 1994 they were under construction.
Steel Dynamics Inc., as they dubbed the newly minted company, was in commercial operation by January 1996. They suffered expected losses during the first 6 months, totaling around $14 million. But incredibly, by August of the same year they posted $1.75 million in net income, and $2.45 million in September.
Today Steel Dynamics is the 5th largest steel producer in the United States. As they’ve grown Busse and his team have continued to innovate and challenge the status quo. They have set up a complex payment structure of bonuses for all employees, allowing them to earn up to 40% more than their base salary if production goals are met. The impact of this is clearly seen as they are now the most efficient steel company in the country, producing at a rate of .25 man-hours per ton of steel.
The company has continued to grow and boasts an annual revenue of $10 billion. They own six steel mills, eight steel processing facilities, two iron production facilities, over 90 metals recycling locations and six steel fabrication plants. It is amazing to see what is possible from a man who seamlessly combined his talents, experience, and entrepreneurial to create something spectacular. Even in the midst of a fading industry, Keith Busse and Steel Dynamics have defied the odds, proving the limitlessness of opportunity.
Keith Busse really demonstrated entrepreneurial characteristics by being determined to start his own steel producing business. He was able to raise the $300 million he needed to start his company, which obviously required serious dedication. I wonder why he thought he could succeed by producing steel in an industry that has shrunk from what it used to be.