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Mill Focus-Unity Aluminum

Betting on Aluminum

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MCN Editor Beth Gainer A new aluminum mill in the U.S. promises to deliver quality products and community buy-in.

The U.S. is home to a rebranded and reinvented aluminum mill. What was Braidy Industries Inc. is now Unity Aluminum, Ashland, Ky.

The name is fitting, considering the company’s philosophy on achieving unity within the mill’s employees, its community and stakeholders. Slated to be operational in 2023, the mill will be housed in a new building within a day’s drive of key customers and key markets.

The mill’s target market will be diverse – from automotive to aluminum cans, with a huge focus on the automotive market. Sixty percent of Unity Aluminum’s automotive volume will go through automotive direct, while up to 40 percent will be distributed through service centers, according to Don Foster, president and CEO. He adds that some automotive direct products will need service centers for value-added services.

One of Unity Aluminum’s goals is to have a service center on the company’s premises. “We’ve got a list of five processors that, once we get our funding, we’ll be engaging to talk with because we have room in our complex,” says Foster. “We would like to have a high-quality value-added service center on our property to provide services such as splitting coils and slitting. We’re going to need partners that specialize in those aspects of the business.”

Foster notes the new mill is “a historical, market-driven project,” as it is the first greenfield aluminum mill in about 40 years to be built in the U.S. Existing aluminum mills in this country are at least 70 to 100 years old, he adds. 

Although the initial plan was for the mill’s volume to be 300,000 metric tons, Foster and his team worked together to increase the volume to nearly 330,000 metric tons. The facility will be large coil, high-quality flat-rolled aluminum, executives claim. Site preparation is under way on 244 acres. The staff is verifying all the geotechnical work, and then installing a new drainage system around the entire site. 

“That site under the roof is projected to be the size of 26 football fields,” says Foster. “Right now there is nothing but land and site preparation going on. And then once we get some financing, we’ll put the equipment orders in.”

The impetus behind the mill was the philosophy the U.S. should be more self-sufficient in the aluminum arena. “I don’t believe our country can rely on international supply chains for critical materials as much as we have in the past,” says Foster, adding that the new facility will help supply the high-quality, critical flat-rolled aluminum required in today’s marketplace. 

Many studies suggest the automotive market needs more aluminum than is currently available. Auto analysts DuckerFrontier suggest aluminum usage in the typical automobile will grow 12 percent by 2020.

“A few years back, the Ford F-150 converted from steel to aluminum, saving that vehicle 700 pounds per vehicle in weight reduction. There is not enough quality flat-rolled aluminum available in the marketplace today if another vehicle like the Ford F-150 converts over from steel or another product to aluminum,” Foster says. “We and Harbor Aluminum – one of the experts in forecasting markets – believe it to be a 2.6-million ton shortfall of domestic collateral aluminum.” 

In fact, Harbor claims “between now and 2023, aluminum penetration would require almost doubling the amount of aluminum into the automotive market,” he adds.

“The strength-to-weight ratio of aluminum can absorb two times the crash energy of steel, and that’s attractive to automakers,” he says. “They have a smaller lifecycle in the CO2 footprint by about 20 percent, which saves about 44 million tons of CO2 emissions annually, so environmentally, they’re attractive,” he says, adding that consumers are increasingly considering a product’s environmental impact before purchase.

Beyond auto, the aluminum can market will also be a target. And as with auto sheet, Foster believes there is a shortage of quality flat-rolled aluminum for the beverage can market. He estimates the market will grow by at least a third over the next decade. 

“There’s three times more recycled content in an aluminum can than there is in plastic or glass. Seventy-five percent of all aluminum ever produced is still being used today because of the high recycling content,” says Foster.

To raise money for the enterprise, Unity Aluminum turned to Headwall Partners, which Foster describes as “a boutique metals-centric investment banking firm.” “Of course, our goal is to attract the financing, and Headwall believes they can have that accomplished by the end of April.”

For investment dollars, Unity also turned to Russian-based aluminum producer Rusal, a move that raised some concerns in Washington, D.C., given the frosty relations between the U.S. and Russia. “I have a lot of respect for Rusal. They are highly knowledgeable and know what they’re doing,” says Foster. “They’re quality people, so they’re a good partner to have on the front end of the project.” 

He anticipates that somewhere down the road, Unity’s relationship with Rusal will evolve. “It is appropriate at some point in time that Rusal step back from their investment and that we find a way to make it right and whole for them and that they become – what they’re really interested in – a supply partner with us,” says Foster. “We could use buying some primary aluminum, and they’re a very good supplier of primary aluminum, and so we expect to be pivoting our relationship with Rusal, who we really respect, from an equity investor to a supply partner.” 

Guiding Principles
The company’s philosophy of collaboration is reflected in its relationship with customers, employees, communities, stakeholders and suppliers to create the following tagline: “Together. Lighter. Stronger. Greener.” “‘Together’ is a reflection of the collaboration that we’ll have with these groups. ‘Lighter’ and ‘Stronger’ are a reflection of the technology we’re bringing to the market,” says Foster. And “Greener” refers to the company’s environmental conscience. “This tagline encapsulates our new direction.”

Good citizenry – from within and outside of the mill’s walls – is also at the heart of Unity Aluminum, he claims. The company has reset its culture from within. “Culture always runs deeper than people give it credit for,” says Foster. “The culture that we’re setting today is one of diligence, hard work, honesty, integrity and transparency.” To encourage diverse input, the entire team is involved in major decisions and thus are able to take ownership of them. 

In the greater Ashland community, good citizenship matters, too. “We are just letting folks know that we are intending to be good neighbors,” says Foster. “We established our credibility in the local market and Ashland, Ky., with a more transparent, respectful and humble approach.” 

With a new mill come new opportunities. “A host of industrial companies have come and gone in Ashland, so there’s a real need in that community for economic development and there’s a really solid set of skills and crafts in that community, so it makes it a great location to build a facility,” says Foster, adding that the mill will employ about 550 people with about another 1,200 workers through the construction process. “There have been economic studies done for the region of Eastern Kentucky and the commonwealth as a whole that show a phenomenal amount of tax revenue a year and ancillary jobs paying bills,” he says.

Foster and his team are pleased with how well potential customers have accepted the new mill.  The company has been reaching out to customers every week and keeping them apprised of its progress. Keeping with the company’s culture, Unity Aluminum aims for transparency. “We talked to Tesla; we’ve talked to most of the major automotive companies, and we’re finding a real interest, so we’re delighted about the customer acceptance,” says Foster. “We’ve also got pretty good support from the state and local communities and local governments. We’ve gotten very strong – and this will be important not only for customers but for the investment community – a very strong third-party validation of our business model from industry experts.” 

The company has continuously been receiving a barrage of phone calls from executives, commercial people and technical people in the aluminum business who want to be a part of the new project. And Foster is encouraged. “A couple of guys we have now are just outstanding. They had worked in facilities that were so old and suboptimized, it was very frustrating, and they wanted to be part of a business that gets to design its mill from the ground up, with all the latest best practices and forethought into how we service customers, how we approach the marketplace and how we employ technology.”

If this mill is successful, Unity Aluminum will have another two or three mills on the horizon as part of its long-range plan. Foster has high hopes for the future of the enterprise. “This is a once-in-a-lifetime opportunity to be what I call the Great American Onshoring Project,” he says. 

Unity Aluminum’s site, shown in this prototype, will be estimated to be the size of 26 football fields.
(Photo courtesy Unity Aluminum.)