Repeat customers provide the foundation needed in nearly all business models, from a coffee shop to the sale of big-ticket capital equipment. Florida-based IMABE of America and its parent firm IMABE IBERICA SL. in Spain have produced balers so well liked by one recycling firm that it is now operating 12 units, reaching a repeat business milestone.
Based near Monterrey, Mexico, nonferrous metals recycling firm RIISA has four locations in that nation, buying and processing a wide variety of scrap as well as operating a secondary aluminum smelter.
Founded in 1987, RIISA has expanded from one location to four, with much of its growth occurring in the previous decade. “This has allowed us to be closer to our customers and suppliers in all the country and exporting areas,” states the firm on its website.
Mauricio J. Llaguno Garza of RIISA says the firm has worked with IMABE throughout its growth phase, to the point that it now operates 12 IMABE balers: five two-ram balers, three horizontal units, three triple compression CH-1800 models and one triple compression 1500 model.
The width and breadth of the IMABE product line is a critical reason RIISA has been able to turn back to IMABE for so much repeat business. IMABE offers more than a dozen sizes and configurations of its triple compression balers and a half-dozen two-ram models.
RIISA has not only grown geographically, it also has spread beyond its aluminum smelting roots to deal in an increasing number of scrap grades, including copper, steel, bronze, stainless steel, zinc and plastic scrap. “We are always in the search for new materials and markets,” states the firm on its website.
Llaguno Garza says the variety of IMABE models operated by RIISA has allowed him to conclude the company’s equipment is worthy of the loyalty shown by his firm to IMABE.
When asked why RIISA is a repeat IMABE customer, Llaguno Garza replies, “The balers are dependable, they require a low level of maintenance and carry low operating costs, and we get very good service form IMABE in Mexico.”
With a steady and growing volume of material being fed into its family of IMABE balers, Llaguno Garza says RIISA values in particular the level of service it receives from IMABE and its network of support people.
Says Llaguno Garza of the baler company he trusts, “The service is great; they always answer questions and find ways to help. This is the major most important advantage of why we choose IMABE for our operations.”
Roth CH Acquisition to acquire PureCycle Technologies
Roth CH Acquisition, an acquisition company backed by Roth Capital Partners and Craig-Hallum Capital Group, has entered into an agreement to purchase PureCycle Technologies LLC, which is constructing a commercial-scale recycling facility in Ironton, Ohio.
According to an investor presentation from Roth CH Acquisition, the companies aim to complete the merger of PureCycle into Roth CH’s portfolio by the first quarter of 2021. After the transaction closes, a parent company of PureCycle will issue an initial public offering, or IPO. Upon closing, the created holding company will be renamed PureCycle Technologies Inc. and will be listed on the Nasdaq Capital Market under the new ticker symbol PCT.
PureCycle Technologies has a license to commercialize solvent-based recycling purification technology for restoring polypropylene (PP) scrap into what it says is virgin-like resin. The company’s recycling process was developed by Procter & Gamble and commercialized by PureCycle. The company says its “ultra-pure recycled polypropylene” (UPRP) has similar properties to virgin PP.
According to a statement from Roth CH Acquisition and PureCycle, strong interest and global awareness of Pure- Cycle has resulted in strategic investments and offtake agreements with companies including Aptar, BMW i Ventures, Closed Loop Partners, Wasson Enterprise, Glockner Enterprises, L’Oréal, Milliken & Co., Procter & Gamble, Ravago and Total.
PureCycle is building its first commercial-scale plant in Ironton, which is expected to have 107 million pounds of capacity per year when it’s fully operational. Production in Ironton is expected to start in late 2022, with full capacity expected to be achieved by 2023. PureCycle raised about $250 million in a tax-exempt municipal bond offering in October to fund the construction of its Ironton facility.
PureCycle says it plans to build new recycling production facilities globally, with the goal of having 30 commercial lines operational by 2030 and 50 by 2035. The company says it plans to announce its next location in Europe and to begin production in 2023 with a nameplate capacity of about 107 million pounds when fully operational. Expansion in the U.S. is expected to include five scaled-up commercial lines capable of producing more than 165 million pounds each of its UPRP. PureCycle says it expects that production from all sites will bring more than 1.2 billion pounds of annual recycled PP to the market in the next five years.
ArcelorMittal, Nippon Steel to build EAF at Alabama rolling mill
Luxembourg-based ArcelorMittal (AM) has signed a definitive agreement with Japan-based Nippon Steel Corp. (NS) to build an electric arc furnace (EAF) at the AM/NS Calvert, Alabama, rolling mill complex. The EAF will be capable of producing 1.5 million tons of steel slabs for the adjacent hot-strip mill and will be able to produce a spectrum of steel grades required for Calvert’s end-use markets.
AM announced plans to build an EAF at AM/NS Calvert in August of last year. According to a news release from AM, the EAF will be a 50/50 joint venture between the two companies.
AM says construction of the new EAF capacity, which will cost about $775 million, will start in 2021, with the EAF coming online in the first half of 2023. AM/NS Calvert is funding the project.
“This is an important project for AM/NS Calvert, which builds additional flexibility to its slab sourcing and will increase its responsiveness to short-lead-time orders,” says Brad Davey, CEO of ArcelorMittal North America. “AM/NS Calvert is already one of the world’s finest steel finishing facilities. Adding this state-of-the-art EAF will further strengthen its capabilities and enhance its ability to serve its full range of customers.”
NS says in a news release that the Calvert complex currently produces steel sheet products by processing semifinished slabs procured from domestic and overseas suppliers. With the new EAF, Calvert will be able to manufacture a portion of the slabs necessary to produce its steel sheet products. NS says the EAF will produce slabs for automotive flat products, including Gen3 advanced high-tensile steel sheets.
BIR issues China ferrous scrap import changes memo
The Bureau of International Recycling (BIR), Brussels, has distributed to its members a memo from five People’s Republic of China government agencies concerning regulatory changes affecting imported ferrous scrap.
The memo, titled “Announcement on Regulating the Import Management of Recycling Iron and Steel Raw Materials No. 78 of 2020,” is from China’s Ministry of Ecology and Environment and four other agencies with scrap import oversight: the Development and Reform Commission, the General Administration of Customs, the Ministry of Commerce and the Ministry of Industry and Information Technology.
The Dec. 30, 2020, memo informs regulators, port officials and the metals industry that “recycling iron and steel raw materials that meet the standards of recycling iron and steel raw materials (GB/T39733-2020) are not solid waste and can be imported freely.”
The agencies add, “Imports are prohibited if they do not meet the requirements of the national standards for recycling iron and steel raw materials (GB/T39733-2020)” and state that the new policy went into effect Jan. 1.
For scrap traders and processors interested in exporting to China who also handle nonferrous, the new system appears comparable to one that came into effect Nov. 1, 2020, for aluminum and copper scrap grades that were redefined by the government as a resource.
Metalico purchases Ohio shredder yard
Cranford, New Jersey-based Metalico Inc. has purchased an auto shredder yard in northeast Ohio from the Liberty Iron & Metal subsidiary of Hong Kong-based Chiho Environmental Group. A recap of the transaction prepared by Chiho for the Hong Kong Exchanges and Clearing Ltd. and The Stock Exchange of Hong Kong Ltd. says the sale was completed Dec. 25, 2020, for $13.2 million. Chiho stock is listed on the Hong Kong Stock Exchange, triggering the disclosure.
The recap states, “The seller is Liberty Iron & Metal Inc., an indirectly wholly owned subsidiary of [Chiho]. The buyers are Chloe Girard LLC (Metalico Girard) and Metalico Youngstown Inc. (Metalico Youngstown). The buyers are part of Ye Chiu Metal Recycling (China) Ltd., listed on the Shanghai Stock Exchange [and] one of the largest secondary aluminum producers globally.”
The purchased yard in Girard, which is near Youngstown, Ohio, had been part of the Diamond-family-owned Liberty Iron & Metal before it was purchased in part by the Germany-based Scholz Group in 2007 and in its entirety by Scholz in 2016. Scholz Group was purchased by Chiho in 2016. According to Chiho’s December 2020 transaction summary, “The proceeds from the sale will be primarily used to repay existing local bilateral bank loans secured over the [disposed of] assets, hence reducing loans and financial expenses.”
Chiho’s recap indicates additional Chiho disinvestment could be in the works. The company says it plans to “strategically refocus” on its Southwest U.S. operations and divest the disposed of assets. Those assets include certain properties, equipment and inventory of the shredder facility that the company owns and operates in Ohio and Pennsylvania. After the divestment, the company says it will cease to own and operate the Girard shredder facility.
In addition to the sold Girard shredder yard, Liberty’s website lists a shredder yard in Erie, Pennsylvania, and another facility in Sharon, Pennsylvania, as its remaining eastern U.S. assets. In the Southwest, Liberty has a shredder yard in Phoenix and a location in Chihuahua, Mexico.
Equity firm purchases Hussey Copper
Leetsdale, Pennsylvania-based Hussey Copper has been purchased out of bankruptcy by an affiliate of New York-based KPS Capital Partners LP. Hussey, which melts copper scrap at its Leetsdale facility, was purchased as part of Libertas Copper LLC from Zohar III Ltd., with the approval of the United States Bankruptcy Court for the District of Delaware.
Hussey describes itself as a leading North American processor and fabricator of copper products and the largest North American manufacturer of copper bus bar. A Leadership in Energy and Environmental Design (LEED) qualifying statement posted to Hussey’s website states, “Hussey Copper architectural copper sheet and strip is manufactured with a minimum of 95 percent recycled content.” The company says it uses internal scrap and scrap obtained by “prequalified industrial sources [and] scrap metal suppliers.”
According to KPS, Hussey Copper is the third acquisition completed by its KPS Special Situations Mid-Cap Fund.
Ryan Harrison, a partner of KPS Mid-Cap Investments, says Hussey Copper is “a market leader with best-in-class manufacturing capabilities, product offering, quality and customer service.
He adds, “We look forward to working with CEO John Harrington, Hussey Copper’s management team and employees to build on this great platform. Hussey Copper’s strong brand and manufacturing expertise, combined with access to KPS’ strategic, operational and financial resources, provide an ideal foundation for future growth. We intend to drive the company’s growth both organically and through strategic acquisitions.”
Harrington says, “The entire Hussey Copper team is excited to partner with KPS in this next phase of growth. KPS’ tremendous track record of manufacturing excellence and investing in leading metals companies will position Hussey Copper for continued success over the long-term. We plan to work closely with KPS to develop a range of growth and operational initiatives to build upon our long and successful history.”
According to Hussey, Locke Lord LLP served as legal counsel to KPS and its affiliates with respect to the transaction, while Lazard Middle Market LLC served as a financial advisor and Latham & Watkins LLP served as a legal counsel to Hussey Copper.
In addition to its Leetsdale facility, which has a melt shop, Hussey operates a bar mill and a fabrication plant in Eminence, Kentucky.
KPS describes itself as the manager of a family of investment funds with more than $12 billion in assets. Other KPS portfolio companies include engine maker Briggs & Stratton and golf club manufacturer TaylorMade.
The Institute of Scrap Recycling Industries (ISRI), Washington, has announced that its 2021 Convention & Exposition will be hosted entirely online. Previously, the event was scheduled to be held April 19-24 in San Diego; but, because of the ongoing COVID-19 pandemic, the decision was made to switch to a virtual event.
ISRI says the event will take place online over two weeks, April 20-22 and April 27-29, while the event’s online exhibition area will be accessible from April 20 through May 20.
ISRI says it plans to return to in-person events for its 2022 and 2023 conventions. ISRI2022 will be March 2022 at Mandalay Bay in Las Vegas, and ISRI2023 will be April 2023 at the Music City Convention Center in Nashville, Tennessee.
Lakeshore Recycling makes northern Illinois acquisition
Lakeshore Recycling Systems (LRS), Morton Grove, Illinois, has announced that it has acquired Roy Strom Co. of Maywood, Illinois. The company says this is its largest acquisition to date.
Photo courtesy of Lakeshore Recycling Systems
Lakeshore adds to the number of MRFs it operates with the purchase of Roy Strom Co.
LRS calls Roy Strom “among the most-respected independent waste haulers in the Chicagoland market.” The addition of Roy Strom to the LRS portfolio “positions LRS for accelerated growth throughout Chicagoland and the broader Midwest,” the company says, referring to itself as the nation’s seventh-largest privately held waste and recycling firm.
According to LRS, it is gaining “an extensive, long-tenured residential and commercial customer base, well-positioned single-stream and C&D (construction and demolition) recycling operations and a strategically located transfer facility in Maywood that serves many local operators.”
George Strom, who served as president of Roy Strom Co. as of its purchase, says, “As the fourth generation of Strom leadership, I am excited to carry on my family’s values of hard work, putting the customer first and fierce independence; at LRS those values will be preserved for generations to come.”
LRS says Strom will remain with LRS as an area vice president, leading operations at the LRS Roy Strom facilities in Maywood.
LRS CEO Alan T. Handley says, “For more than 75 years, Roy Strom Co. has built a rich legacy as one of the most respected independent waste and recycling leaders in Chicago. This critical partnership demonstrates how trusted LRS remains as a first-choice acquirer for independent, family-owned waste and recycling companies throughout the Midwest.
Handley adds, “LRS has been built by entrepreneurs with many of the acquired businesses’ family members continuing to serve as key executives throughout the organization. Maintaining our entrenched local roots with an unyielding commitment to the customer experience differentiates LRS and fuels our growth and innovation. LRS remains the local alternative to large national waste haulers who lack the community connection so essential to successful waste and recycling service delivery.”
Chicago-based Much Shelist served as legal advisor, and KPMG LLP provided financial and tax advisory services to LRS. In conjunction with the acquisition, Comerica Bank’s Environmental Services Department led senior financing, while Ironwood Capital provided mezzanine financing.
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