Scrap Industry News

Departments - Scrap Industry News

August 7, 2001

RAPID DEAL-MAKING PACE CONTINUES

The consolidation trend within the scrap processing industry continued at a vigorous pace in the late first quarter and early second quarter of 1998. As in 1997, two of the most aggressive deal-makers were Metal Management Inc., Chicago, and Recycling Industries Inc., Englewood, Colo.

Metal Management’s recently announced acquisitions include:

*Michael Schiavone & Sons Inc., North Haven, Conn. Schiavone, one of the largest scrap companies in New England, is a $60 million a year company with a 100-year-history . The company operates a deep water port that allows it to both export and ship by barge domestically.

* Newell Recycling of Denver Inc., Denver, Colo. The 12-year-old firm operates two feeder yards in addition to its large shredder yard in Denver. The company’s annual revenue estimate for 1998 is $16 million.

* Ellis Metals Inc., Tucson, Ariz. Ellis processes ferrous and nonferrous scrap at two Tucson facilities and a yard in Casa Grande, Ariz.

* Nicroloy Co., Pittsburgh. The 36-year-old company is a leading stainless steel scrap and nickel alloy scrap processor.

* Metal Management’s Cozzi Iron & Metal subsidiary, Chicago, announced the acquisition of most of the assets of Midwest Industrial Metals Corp., also in Chicago. (Cozzi did not purchase the copper chopping and lead processing assets.) Among assets purchased by Cozzi are aluminum shredding operations, baling operations, and an aluminum furnace.

The Chicago consolidator also announced the termination of one previously announced deal. An agreement to purchase five Dallas recycling companies—Yonack Iron & Metal, Yonack Services, Gold Metal Recyclers, Atlas Recycling, and Spectrum Metals—has been terminated. None of the parties involved has publicly commented on the reason for the termination, though speculation has centered on dissatisfaction on the part of the acquired companies with the direction of Metal Management’s stock price.

One of the previously announced deals made by Recycling Industries Inc. was also terminated this spring. RII’s agreement to purchase Mindis Metals Inc., Atlanta, was terminated in early April. RII cited reasons pertaining to environmental due diligence as the cause of the termination. "When looking at potential acquisitions, Recycling Industries performs an environmental review. Unfortunately, the circumstances did not allow us to complete our standard due diligence process," says RII chairman and CEO Tom Wiens.

RII did announce three other agreements:

* Ferex Corp., Tyler, Texas. Ferex operates K & L Auto Recycling Inc. and Ferex Metals Recycling Inc., which have combined annual revenues of $68 million. Ferex Corp. processes ferrous and nonferrous material and is one of the largest metal aggregators and operators in the mobile car crushing industry, according to RII.

* Cycle Systems, Roanoke, Va. The Virginia ferrous and nonferrous scrap recycler has estimated annual revenues of $25 million and operates facilities in Roanoke and Lynchburg, Va.

* Southern Metals Recycling, Wilmington, N.C. Southern, with annual revenues of $8 million, operates two facilities in Wilmington and processes both ferrous and nonferrous scrap.

The deals made by the two fast-moving consolidators were by no means the only ones announced this spring:

* Noranda Inc., Toronto, has announced the tentative purchase of Huron Valley Steel, Belleville, Mich. Noranda estimates that Huron Valley (profiled in the October 1997 RT) will add more than $210 million to its annual revenue figures. Leonard and Randy Fritz of Huron Valley will retain their interest in Fritz Enterprises, Taylor, Mich., a ferrous processing company that—among other things—operates a steel slag shredder in Gary, Ind.

* OmniSource Corp., Fort Wayne, Ind., has acquired A. Edelstein & Son, Toledo, Ohio. The 79-year-old $12 million scrap processing firm was recently mentioned in RT (March 1998) as a family-operated outpost in a region experiencing rapid consolidation. OmniSource operates 26 scrap facilities in the Great Lakes region, as well as six brokerage offices and an aluminum smelting plant.

* Commercial Metals Co. (CMC), Dallas., has purchased the assets of Temega Industrial Recycling Inc., Augusta, Ga. The facility will primarily supply the SMI-South Carolina mill in Cayce, S.C., which is part of the CMC Steel Group.

* TJN Enterprises Inc., Sioux Falls, S.D., has acquired Watertown Iron and Metal Co. of Watertown, S.D. The Watertown location will retain its current name, according to TJN Enterprises president Toby Shine.

METECH SETTLES WITH EPA

Metech International, Mapleville, R.I., has agreed to pay a $300,000 penalty in order to settle improper waste handling allegations being investigated by the U.S. Justice Department and the Environmental Protection Agency.

Metech, a subsidiary of Swedish conglomerate Trelleborg AB, also agreed to install new equipment at its precious metals recycling sites. The company recycles precious metals and other recoverable materials from computers and other obsolete equipment. In addition to operating a facility at its Rhode Island headquarters, Metech also has facilities in South Bend, Ind. and Gilroy, Calif.

SHIP BREAKER SENTENCED

Another EPA investigation has resulted in a 30-month prison term for the president and owner of a Baltimore ship scrapping and salvaging company. Kerry L. Ellis Sr., president of Seawitch Salvage, received the 30-month sentence and a $50,000 fine from a U.S. District court judge for violations of the Clean Air Act, the Clean Water Act, the Rivers and Harbors Act, and for making a false statement to a federal agency.

The charges resulted from violations the company committed while scrapping two decommissioned U.S. Navy vessels, the aircraft carrier USS Coral Sea and the minesweeper USS Illusive. Seawitch was charged with improperly handling and disposing of asbestos materials in the ships and discharging oil, paint chips, metal fragments, insulation materials, construction debris and other pollutants into the Patapsco River, which drains into Chesapeake Bay. The false statement charge stemmed from misleading periodic progress reports Seawitch submitted to the Defense Department regarding asbestos handling.

In addition to Ellis’ prison sentence and fine, Seawitch Salvage itself was sentenced to five years probation and a $50,000 fine.

DAEWOO FORMS NEW CORPORATION

Daewoo Machinery Corporation merged with Daewoo Equipment Corporation to form a new $350 million organization named Daewoo Heavy Industries America Corporation. The new company will be responsible for North American sales, service and technical support of all Daewoo machine tools, construction equipment, lift trucks, skid steer loaders and mini excavators.

Heung Yun Lee, former president of Daewoo Machinery Corporation, has been appointed president and CEO of the new corporation. The company is headquartered in Carlstadt, N.J.

SVEDALA REORGANIZES LINDEMANN DIVISION

Svedala Industries has announced a reorganization of its Lindemann Recycling Equipment operations, Charlotte, N.C. Personnel heading the newly-named Lindemann Recycling Division will include Bill Tigner, whose new title is Product Manager, North America for Shredders and Replacement Castings. He will also oversee the company’s two-ram and single-ram baler sales and distribution. Gunn Phillips has been named Product Manager, North America for Ferrous Shears and Ferrous Balers. Peter Gross remains the division’s President and General Manager.

TRADEMARK IS NEW NAME IN FLORIDA SCRAP

The David J. Joseph Co. (DJJ), Cincinnati, and Newell Recycling of San Antonio LP have combined their operations in Florida under the name Trademark Metals Recycling, LLC.

The new company, to be based in Tampa, will consist of seven scrap processing facilities: Newell’s Everglades Recycling location in Opa Locka and its Port Everglades location in Fort Lauderdale; DJJ’s Tampa and West Palm Beach processing facilities; and the Yorke Doliner facilities in Daytona Beach, Cocoa, and Port Canaveral.

Tom Baker, president of Newell of San Antonio, is the president and general manager of Trademark Metals Recycling. Ron Laker will serve as commercial vice president, Greg Oelrich as financial vice president, while Dan Bonivich, Tim Brose, Carl Coghlan and Mark Jolly have been named senior operating managers.

ERIEZ ACQUIRES BRITISH FIRM

The Eriez Europe subsidiary of Eriez Magnetics, Erie, Pa., has acquired a British metal detection equipment manufacturing firm. Eriez Europe, based in Bedwas, Wales, acquired Pulse Technology Ltd. of Abingdon, England. Pulse makes Metalarm Metal Detectors, which are used by the plastics, wood, mining, quarrying, and recycling industries.

"Pulse Technology’s products complement our current technology," says Eriez Magnetics president Chester F. Giermak.

WENDT ADDS SERVICE FLEET

Scrap recycling equipment maker Wendt Corp., Tonawanda, N.Y., has added a field service truck fleet. Among the vehicles that can be dispatched to service Wendt Corp. equipment in the field are a 64,000-pound International truck and two 44,000-pound Ford trucks.

According to Wendt Corp. service manager Jerry McAdoo, the trucks are equipped with fabrication and field service gear.

Services that can be performed on balers, shredders, shears and cranes include rebuilding, relining, installation, troubleshooting and repairs on electrical, hydraulic and mechanical systems.

GALT EXPANDS IN OHIO

Galt Alloys Inc., Canton, Ohio, has announced a 5,000 tons per year expansion of its ferrotitanium alloy capacity. "Our intentions are to enhance our position domestically as well as to expand our involvement internationally," says Galt Alloys chairman Scott Jackson. "Galt’s strengths are our diversified production processes and raw materials supply."

The production expansion comes on the heels of the construction of a new scrap processing facility the company is currently building. "We are adding more than 75,000 square feet of scrap handling space and associated equipment," says Jackson. "Titanium scrap material that does not qualify for ingot production will be used in ferrotitanium production or for scrap steel mill grade products."

The company consumes aluminum, shredded ferrous, titanium and titanium alloy scrap at its Canton facility.