ANOTHER MONTH, ANOTHER SET OF ACQUISITIONS
Several purchases by Recycling Industries Inc., Englewood, Colo., were among scrap industry deals and acquisitions announced this spring.
Recycling Industries went on a buying spree in late April, making several announcements of signed letters of intent, including:
•a letter of intent to purchase Morris Recycling Inc., New Albany, Miss. The Morris company operates six scrap processing facilities throughout Mississippi that generate $34 million in annual revenues.
•an agreement to acquire Tennessee Aluminum Processors Inc., Mount Pleasant, Tenn. The company is a $15 million per year smelter of secondary aluminum. The firm’s three rotary furnaces melt aluminum scrap, including UBCs and aluminum dross.
•Self Recycling Inc. and Steel Materials Inc., Cartersville, Ga., also signed a letter of intent with Recycling Industries. The sister Georgia companies earn annual revenues of $9.5 million.
•a letter of intent to buy Glynn Iron & Steel Inc., Brunswick, Ga. The third-generation scrap processing company operates a 15-acre yard and has annual revenues of approximately $4 million.
•a letter of intent to buy the assets of Pro Recycling LLC, Milwaukee, Wisc. Pro Recycling and its subsidiaries Lewinsky Iron & Metal Co. Inc. and Recycling World Ltd. have combined annual revenues of about $4 million.
Recycling Industries Inc. chairman and CEO Thomas J. Wiens has also announced a postponement of the company’s plan to offer $250 million worth of new notes to be used to refinance its credit facility, retire existing debts and fund new acquisitions.
Other mergers and acquisitions within the scrap processing industry that have been recently announced include:
•Metal Management Inc., Chicago, has signed a letter of intent to acquire Universal Scrap Metals Inc., also of Chicago. Universal is a $40 million company specializing in non-ferrous processing.
•IMCO Recycling Inc., Irving, Texas, has signed an agreement to acquire U.S. Zinc Corp., Houston. U.S. Zinc is one of the world’s largest zinc recyclers and suppliers of zinc oxide and zinc dust. The company produces annual revenues of about $165 million. IMCO—one of the world’s largest aluminum recyclers—also processes zinc and magnesium.
•Sand Springs Metal Processing Corp., Sand Springs, Okla., has agreed to purchase facilities operated by three fellow Oklahoma processors: The Yaffe Companies Inc., Yaffe Iron and Metal Corp., and Borg Compressed Steel Corp. The combined Yaffe companies operate 13 facilities in four states.
including one of the largest aluminum sweat furnaces in the Southwest at Muskogee, Okla. Borg Compressed Steel, Tulsa, operates three yards in Oklahoma.
CALBAG INKS CHINA AGREEMENT
Calbag Metals Co., Portland, Ore., has entered into a joint venture with a Taiwanese firm to engage in nonferrous scrap processing operations in the People’s Republic of China. According to Calbag executive vice president Rick Schwartz, the agreement will allow Calbag to offer Pacific Rim customers “American-sourced material, upgraded and processed in China, that will be absolutely equal to the highest quality of materials generated anywhere else in the world.”
The agreement calls for a facility in Kwantong Province, China, to have its production capabilities expanded to process and produce more copper choppings, aluminum and zinc ingots, and zinc die cast ingots.
Schwartz adds that the Chinese operations to will not come at the expense of processing capacity at Calbag’s four facilities in the U.S. and will help minimize the impact of regional fluctuations in currency.
SORT YOUR FLUFF, SAYS BRITISH OFFICIAL
Operators of metal shredders in Britain are fighting both a high tax on land-filled auto shredder residue (ASR or fluff) and what they view as unhelpful suggestions from British politicians. The tax on land-fill bound shredder residue was recently raised to approximately $16 per ton by the British government. The tax may be creating a shortage of shredded grades of ferrous scrap, according to the British Metals Federation.
A suggestion from British Treasury Minister Alistair Darling has led some to believe that the government lacks an understanding of how the scrap business works. Darling suggested that shredder operators further sort through fluff to separate out soil, stones and other materials that could be land-filled at closer to $3 per ton. An editorial in the British trade magazine Materials Recycling Week chastises Darling’s suggestion that “shredder operators root through piles of 15 millimeter granules to pick out stones and soil before land-filling their residue. The industry’s concerns deserve to be treated with more respect.”
Processor Acquires Car Crushing Firm
Industrial Scrap Corp., East Chicago, Ind., has acquired the assets of Paul’s Portable Auto Crushing, Hammond, Ind. The mobile car crushing operation will function as part of Industrial Scrap Corp.’s Indiana Shredding Division, according to Herb Gertler, president of Industrial Scrap.
“This acquisition is an important one for Industrial Scrap Corp., in anticipation of our new 98/104 Newell super shredder coming online in the fall of 1998,” says Gertler. “The addition of Paul’s expertise and scope of operation will enable us to close the loop in automobile recycling,” he adds.
Industrial Scrap Corp., the scrap manager for Ford Motor Co.’s Chicago region, expects to exceed $50 million in revenues in 1998, according to Gertler.