Aluminum alloys made with remelted scrap have long played an important role in the North American metals supply chain, and the sector is poised to keep thriving as sustainability targets become entrenched as standard corporate practice.
Among the companies expanding their presence in the growing sector is Brampton, Ontario-based Matalco, which began melting aluminum scrap in Brampton in late 2005. The firm is part of the larger Giampaolo Group Inc., which also owns scrap processor and trader Triple M Metal LP.
Matalco Vice President of Corporate Development Robert Roscetti says the company now has some 500,000 tons of annual capacity at five different melt shop facilities, with the potential for greater expansion in the planning stages.
Building on a solid foundation
Although Matalco got its start in 2005, the Giampaolo Group, also based in Brampton, can trace its roots back to the 1970s and the formation of the scrap processing company that became Triple M Metal. Triple M and the Giampaolo Group were both co-founded by brothers Mike and Antonio (Tito) Giampaolo, who remain executives in the organization.
Triple M processes more than 3 million tons of ferrous and 300,000 tons of nonferrous scrap each year, according to a 2018 Recycling Today profile of the Giampaolo Group. The company’s 26 locations in Canada, the United States and Mexico host four auto shredders, a wire chopping line and additional processing equipment.
Roscetti says the Triple M network can supply approximately 40 percent of Matalco’s aluminum scrap requirements. Matalco’s need to purchase the majority of its scrap feedstock from outside the corporate network points to the steady growth it has enjoyed since its inception in 2005.
Matalco’s growth trajectory gained momentum in 2010, when the firm “acquired, out of receivership, a casting facility in Canton, Ohio, from Thakar Aluminum,” Roscetti says. Ohio also was the site of Matalco’s next phase of growth.
“In March of 2016, we completed construction and commissioning of a new $100 million state-of-the-art facility in Lordstown, Ohio,” Roscetti notes.
Matalco’s eye for growth shifted one state west in 2018, when in January of that year it completed its acquisition of what Roscetti calls “one of Matalco’s major competitors, Alexin LLC.” In the press release announcing the Alexin purchase, the firm said former Alexin President Tom Horter would assume the role of president of the Matalco USA operations, a title he has retained into 2021.
At the time of the acquisition, Horter said, “The integration of Alexin provides Matalco with increased product breadth, particularly in the growing automotive flat-rolled product market and specialty alloy billet markets.”
The most recent chapter in Matalco’s growth story involves the late 2020 commissioning of its $80 million greenfield facility in Wisconsin Rapids, Wisconsin. That billet production facility has a projected 115,000 tons of annual capacity.
Tapping into a growing market
Roscetti says Matalco focuses much of its scrap purchasing activity on high-purity 1000- and 6000-series aluminum alloy scrap, “as well as additive alloys, such as 356 car rims and 5052 aluminum.”
Those grades are pivotal to making Matalco’s end product, which it describes on its website as “high-quality homogenized 6000-series aluminum logs and cut billets for the aluminum extrusion and forging manufacturing industries.”
However, the aluminum producer says its “world-class remelt technology” also creates some flexibility in terms of the grades of scrap it can purchase. Roscetti adds, “We also have processing capabilities that allow us to consume painted aluminum siding and long length extrusion scrap, as well as rotary [furnace] capacity to consume scrap material that traditionally wouldn’t be used by a company like Matalco.”
Matalco’s leadership team includes metals industry veterans such as Horter, whose path in the aluminum sector started with Alcoa in the late 1990s. Roscetti, on the other hand, became familiar with Matalco via a nonmetallurgical route.
“I graduated with a bachelor’s degree in business and economics and worked for approximately 15 years of my career in Canada’s largest banking institutions in corporate and commercial finance,” he says. “While working at the bank, I met the owners and senior leadership teams of both Matalco and Triple M Metal and began to learn about their respective companies and business models. I was very impressed with them as business leaders and recognized the growth potential in the industry, which led to my decision to join Matalco.”
Since joining the firm in the early 2010s, Roscetti says he has been in “various progressive positions” and has helped play a role in Matalco’s development as it has grown from operating one melt shop to five.
The company’s 400 employees operate five facilities that now consume at least 250,000 tons per year of scrap, depending on facility capacity rates. In addition to the 40 percent of material it acquires from affiliated company Triple M Metal, Roscetti says Matalco purchases scrap “from extruders, scrap dealers and brokers.”
Matalco sees a bright future in scrap-fed aluminum, which is growing as a material of choice for electric vehicles and is gaining favor in the packaging sector because of its high recycling rate. The construction industry is another sector seeking sustainable materials. When Matalco’s Lordstown plant opened in 2016, Roscetti identified the construction and automotive sectors as the likely top destinations for its recycled- content products.
Roscetti says Matalco has a deep understanding of the raw materials side of its business thanks to the decades of scrap industry experience it can tap into on the Triple M side of the Giampaolo Group portfolio. Additionally, the onset and persistence of COVID-19 have created challenges, but the overarching demand for recycled-content aluminum has not sagged. Roscetti says, “Despite the current COVID-19 environment, Matalco and the entire aluminum industry in North America are experiencing very strong demand.”
In terms of identifying a recent challenge, Roscetti says “aluminum imports into North America have and continue to be a challenge in the metals industry.”
Despite the challenge imports represent, the overall bright prospects for the light metal seem to have Matalco’s management convinced there is room to grow. Looking forward, Roscetti says, “We are currently planning on another expansion project somewhere in the southern U.S. Stay tuned.”