Schnitzer Steel Industries Inc., headquartered in Portland, Oregon, says it entered into a definitive agreement Aug. 12 to acquire Columbus Recycling, with ferrous and nonferrous recycling operations in the Southeast. The company also announced the restart of production at its Cascade Steel Rolling Mills in McMinnville, Oregon.
The restart of production at Cascade Steel this week followed the substantial completion of replacement and repairs of property and equipment at the mill’s melt shop that had been lost or damaged by a fire May 22, Schnitzer says. Cascade has resumed operations with a full workforce several weeks ahead of schedule and is accepting orders for its full range of finished steel products based on the rolling schedule. In light of the timing of the restart and the ramp-up in operations, the company says Cascade is expected to complete a limited number of sales prior to the end of August, the close of Schnitzer’s fiscal year.
Chairman and Chief Executive Officer of Schnitzer Steel Industries Tamara Lundgren says, "I am proud of our team’s exceptional efforts to bring the mill back into production ahead of schedule, enabling us to support our customers with high-quality finished steel products. Cascade is powered by electricity that is more than 95 percent carbon-free. Combined with the use of recycled metal as its primary raw material, the steel made in our electric arc furnace (EAF) steel mill has an exceptionally low carbon impact as compared to the industry average."
Regarding the Columbus Recycling agreement, that company is a provider of ferrous and nonferrous metal recycling products and services that operates eight operating facilities across several states in the Southeast, including Mississippi, Tennessee and Kentucky. Schnitzer says the transaction is expected to close during the first quarter of the company’s 2022 fiscal year, subject to regulatory approvals.
Founded in 1956, Schnitzer says Columbus Recycling has a well-established customer-focused business that purchases and processes scrap metal from industrial manufacturers, local recycling companies and individuals, selling the recycled products to regional foundries and steel mills. Combined with Schnitzer’s nine existing facilities in Georgia, Alabama and Tennessee, the acquired operations will offer additional recycling products, services and logistics solutions to customers and suppliers across the Southeast, a region that is expected to see a significant increase in EAF steelmaking capacity in the coming years, the company says.
Further illustrating the importance of this region, earlier this week, Orange, California-based SA Recycling LLC also announced the purchase of the business assets of Southern Recycling LLC, including locations in Nashville, Tennessee, and in Bowling Green and Owensboro, Kentucky.
According to Argus Media, which cites American Iron and Steel Institute data, the South was the top steel-producing region in the U.S. last year, with raw steel production averaging nearly 601,000 tons per week
Argus says an additional 6.2 million tons per year of flat-rolled capacity are expected to come online in the region from late 2020 through 2022.
In the 12 months through the end of May, Columbus has delivered annual sales volumes of approximately 300,000 ferrous tons which, on a proforma basis, Schnitzer says would increase its total ferrous volumes by approximately 7 percent over the same period.
"The acquisition of Columbus Recycling will expand our platform and offerings in a robust regional market with immediate scale and meaningful synergies,” Lundgren says. “The transaction is consistent with our growth strategy to expand metals recycling operations to meet anticipated increases in steel and nonferrous metals demand driven in part by the global transition to low-carbon technologies. While a variety of solutions will be required as industries, communities and governments actively pursue carbon reduction, the increased use of recycled metals is one path that is immediately achievable."