Hybar – a newly formed company – recently announced that it successfully raised $700 million of debt and equity financing to build, startup, and operate a technologically advanced, environmentally sustainable scrap metal recycling steel rebar mill. The equity portion of the funding was led by TPG Rise Climate, the dedicated climate investing strategy of TPG’s global impact investing platform TPG Rise, and Global Principal Partners (the investment entity used by Hybar’s senior management team).
Of the $700 million raised, $470 million will be spent for building the rebar mill. And the remainder of the funding will be used to start up and operate the mill and pay certain debt service costs during construction. The mill – expected to take 22 months to construct – is being built in northeast Arkansas on a 1,300-acre greenfield site with direct access to barge, rail, and truck transportation options. This mill will produce a full complement of high-yielding rebar that will primarily be used in large infrastructure projects, including projects supported by the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.
Hybar’s mill technology, including the water treatment facility, is being supplied by SMS group. Primetals Technologies are providing the substation. And Hybar’s technology is designed to significantly reduce the energy needed to produce rebar, especially compared to other rebar mills in North America, many of which were built more than thirty years ago. Plus, Hybar’s technology will also significantly limit greenhouse gas emissions. Hybar expects its greenhouse gas emissions to be the lowest among all North American steel producers and likely the lowest in the world’s steel-making community.
Hybar’s ability to drastically reduce energy use while limiting greenhouse gas emissions was a vital driver. This led to Hybar being the first steel company globally to be certified to issue Climate Bonds. Climate Bonds demonstrate compliance with the international Paris Agreement’s greenhouse gas emissions targets.
Dave Stickler (Hybar’s CEO) and his colleague, Ari Levy, Hybar’s chief financial officer, have a long and successful track record of investing in, building, and operating some of the finest scrap metal recycling steel mills in North America and elsewhere.
Hybar’s mill is going to be directly connected to an adjacent solar facility. And this will enable the company to know with certainty that during certain periods of the day, the electricity being used to run the mill is being generated from 100% renewable sources. No other steel mill in North America is directly connected to a solar field that can supply 100% of its power needs. Hybar also has a special rate power contract with Entergy Arkansas, under which Hybar can buy electrical power to supplement the adjacent solar-generated power when needed.
Hybar plans to produce 630,000 tons of rebar annually with approximately 154 employees (4,090 tons of rebar production per year per employee). And the 154-employee figure includes all employees, not just operating employees. Hybar expects to be the most labor-efficient steel rebar producer in the world.
KEY QUOTES:
“The Climate Bond certification aligns perfectly with Hybar’s plan to offer our customers competitively priced rebar that is also the greenest rebar in the market.”
― Dave Stickler, Hybar’s chief executive officer
“It says a lot about the Hybar project given that we have the same high-profile financial providers that have invested alongside Dave and me on prior projects, including the highly successful Big River Steel flat-rolled steel mill, which is located two miles away from the Hybar site.”
― Ari Levy, Hybar’s CFO
“We look forward to building on the deep relationship and successful partnership we’ve had with Dave and Ari over many years. Our investment in Hybar not only reflects the trust we have in this talented management team but our thematic focus on sustainable materials broadly, and on green steel production specifically. The global steel industry accounts for 7-9% of global CO2 emissions today, which creates a massive opportunity for Hybar to drive decarbonization at scale.”
― Mike Stone, partner at TPG
