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.
Systematic approach to savings
Features - Baling Equipment Focus
Consistent attention to details can help recycling plant operators save on their baling costs.
The processing machinery at a recycling plant yields an ongoing set of operating costs tied to a range of factors. Managing these costs, including making the proper determination as to when to invest in new equipment, can make the difference between a profitable and unprofitable year.
Shredding equipment comes to mind when recyclers think of replacement (or wear) parts. Sorting and screening equipment might be thought of first in terms of maintenance tasks and attention to calibration and settings.
By comparison, balers might seem to fall into more of a “plug and play” category, but the people who operate and service these machines can point to a number of decisions and routines that can make an enormous impact on the cost of compressing bottles, cans or paper into dense bales.
It will cost you
The variety of baling equipment at work in the recycling sector is considerable. It ranges from small, vertical models placed in retail backrooms to sizable horizontal balers on the job in material recovery facilities (MRFs) to high-powered ferrous balers designed to squeeze steel into compact cubes.
The price of the baler, naturally, is tied to its size, output and compression force. The cost of a backroom vertical baler might be a single-digit percentage of what the operator of a large MRF will pay for a new, large-volume two-ram or extrusion style horizontal baler.
“The current price range for a new two-ram baler is $300,000 to $1 million,” says Roy Daily, CEO of Himes Service Co. and Daily Recycling Equipment. The two Waco, Texas-based companies sell and service a range of balers, including two-ram models.
He adds, “The final price will depend on the required volume needed and how much material [buyers] want to process.”
Daily says current operators of balers and those shopping for a used machine need to keep one critical word in mind: maintenance.
Having access to or assessing the maintenance history of a preowned baler can make the difference between a satisfied buyer and one who will experience buyer’s remorse.
Daily goes so far as to say the price one pays for a used baler “purely depends on how the baler was maintained during its use. If the baler was properly maintained, it will retain a good part of its value. Otherwise, the opposite will occur.”
Baler owners with an aging machine also can consider the prospect of a rebuild, Daily says.
He says, “A rebuilt baler is going to cost significantly less than a new one and might be available significantly faster.”
Photo from Recycling Today’s archives
Using two-ram balers as his benchmark, Daily adds that, “A reline on an existing baler costs about 10 percent of the cost of a new baler and takes a week or two to complete.”
In a market where new baler fabrication plants can have a backlog, “A new baler generally takes three to four months to deliver,” he adds.
Baler operators face ongoing operating costs, with line items in this category including baling wire, electricity, labor and preventive maintenance.
Emerging savings frontiers
Corporate chains of command often emphasize a mission of controlling costs. For baler operators, this mindset can be helpful when it comes to spending on power, wire and labor. Daily says scaling back on maintenance, however, too often will add to total costs.
Baler manufacturers tend to compete with each other in introducing new models designed to consume less power and minimal wire and to offer automation features that promise to keep operators’ labor costs in check.
“New technology in baler manufacturing is producing a faster, more energy-efficient product,” Daily says. Some of this technology is transferable to older models, he adds. “All existing balers can be retrofitted with a new wire tier or operating system. This, in turn, will make an existing baler more energy-efficient, produce faster and increase overall savings and profit.”
Standardization in components has provided another efficiency advantage, Daily says. “Most manufacturers are creating more standardized equipment, which means parts are more readily available off the shelf and not just [from] the manufacturer,” he adds.
Daily estimates energy consumption comprises 25 percent of a two-ram baler owner’s operating costs, while baling wire purchases contribute another 25 percent of operating costs. That leaves fully half of all operating costs tied to labor and maintenance considerations.
Attention to detail
The word “routine” often is placed before the word “maintenance,” and baler owners could be well-served to consider this. “Training staff to perform daily housekeeping and preventive maintenance tasks like good housekeeping and daily checks is the baler owner’s first line of defense to keep operating costs under control,” Daily says.
He also advocates for baler owners to contract with a manufacturer, dealer or independent service provider to undertake “regular (monthly or quarterly, depending upon volume) preventive maintenance.” Providing access to “equipment experts” is “key,” he says.
Cost savings are evident when in-house staff who take the time and have the training to do so can spot a looming problem by sight (or sound), Daily says. “When issues are identified during daily checks or scheduled preventive maintenance, it is imperative to get them fixed properly right away.”
Photo from Recycling Today’s archives
Daily advises against the seemingly thrifty notion of a quick patch job. “Rigging up workarounds can cause undue wear on the machine, which can lead to decreased efficiency and increased repair costs later.”
If a baler serves as the final processing step at a high-volume MRF that contains a bounty of sorting lines, screens and optical scanners, its maintenance becomes even more crucial, he says.
“The baler is the heart of a recycling system, and when the baler suffers from lack of proper maintenance, the entire system suffers and in turn the bottom line,” Daily says. “Properly maintained balers will allow the owner to control and rein in any operating costs.”
Daily says he has seen good maintenance create return on investment in the form of long baler life and having a saleable piece of used equipment if a facility outgrows its existing baler.
He warns, “A great baler that isn’t well-maintained could have to be replaced in three to five years.” Conversely, Daily says, “We’ve got customers with 30-to-40-year-old [Harris] HRB8 and HRB10 two-ram balers that are still processing great thanks to regular maintenance and relines.”
He concludes, “I can’t stress enough the importance of good maintenance. Maintaining a baler costs significantly less than replacing one. Properly maintained equipment lasts longer, is more efficient and has reduced downtime.”
The author is senior editor with Recycling Today and can be contacted via email at btaylor@gie.net.