SDI to acquire Mexican scrap firm
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SDI to acquire Mexican scrap firm

Steel Dynamics has signed an agreement to acquire Roca Acero, which has four yards in Mexico.

May 17, 2022

Steel Dynamics Inc. (SDI), headquartered in Fort Wayne, Indiana, says it has entered into a definitive agreement to acquire the equity interest of Monterrey, Mexico-based multilocation scrap processing firm Roca Acero S.A. de C.V. SDI says the purchase, for an undisclosed amount, will “be funded with available cash.”

Roca Acero operates four scrap processing facilities, including at least one with an auto shredder. SDI calls the facilities “strategically positioned near high-volume industrial scrap sources located throughout central and northern Mexico.”

The company’s combined facilities ship approximately 575,000 gross tons of scrap annually and have an estimated annual processing capacity of approximately 850,000 gross tons, SDI says. Roca Acero will become the second Mexico-based scrap firm acquired by SDI, following its 2020 purchase of Zimmer S.A. de C.V., also based in Monterrey.

“We look forward to adding ROCA to the Steel Dynamics family to further solidify our Southwest U.S. and Mexico growth strategy,” says Mark D. Millett, chair, president and CEO of the electric arc furnace (EAF) steelmaker.

“Combined with our existing North American metals recycling facilities, the addition of Roca significantly strengthens our raw material procurement strategy in the region,” Millett continues. “After closing the Roca transaction and fully integrating our Mexican metals recycling operations, we believe our Mexican scrap facilities will provide an even more meaningful competitive advantage to our United States EAF steel operations, while also providing a high-quality, customer-centered option for our outside scrap customers. We are very excited to welcome and learn from the entire ROCA team.”

SDI Executive Vice President and Chief Financial Officer Theresa Wagler tells Recycling Today the acquisition was made in part because “Mexico is prime scrap long.” Thus, Roca Acero can supply prime grades to the SDI flat-roll mill in Sinton, Texas.

The ferrous shred from the Roca Acero shredder yard also potentially can find a home at SDI mills, with the company taking measures to seek higher qualities of shredded scrap to use at its melt shops.

In the 2017 Recycling Today story focused on Roca Acero’s shredder installation, the Commercial Manager Lizette Camarillo is quoted as saying, “Nowadays local markets need to be more competitive in order for supply to cover their demands. We are looking to diversify our products and reach markets with higher added value.”