Sidney C. Olive and John Abraham Sternenberg, excited by the railroad moving through Hardin County, began relocating their milling interests from Beaumont and Houston to Hardin County in July, 1881. They erected a circular mill with a 40,000 board feet daily capacity and were cutting their first bill of lumber in October that same year. Business prospered, and by 1889 the mill's capacity increased to 65,000 board feet per day, although the Atchison Topeka & Santa Fe locating engineer, R. L. Van Sant, reported to his chief engineer that the cut was only 50,000 feet in 1890.
The town became known as Olive but was listed as Sunset in an 1884 railroad directory. The town had a brass band, saloon, company store, and segregated churches and schools. The saloon and store kept regular hours, closing at 6:00 P.M. The town's population numbered 500 in 1889; 976 in 1900; and 1200 in 1905. The 1900 census revealed that the predominant race was white, with 804 Caucasians and 172 African-American. Olive & Sternenberg regularly sponsored and fielded company baseball teams. A set of photographs of Sidney C. Olive (1833-1906) and the Olive Sternenberg mill at Olive (ca. 1892) are located at the Texas Forestry Museum, Lufkin.
The company tram road snaked eight miles into the woods by 1904.
Two initial officers in the management, V. A. Petty, secretary-treasurer, and G. A. Sternenberg, mill foreman, became owners in 1900. The sawmill burned in 1904 and was rebuilt as a band mill having a 100,000 feet per day capacity. Several changes in management were made in the early 1900s, but the mill continued to prosper until the timber supply was exhausted in 1912.