Metalico Opts for Larger Shredder at Buffalo Site

Metalico Inc. has announced the next phase of its strategy for growing the company's shredding capacity by increasing the site of its planned auto shredder at its new site in the Buffalo, N.Y., area. The company also decided to suspend its shredding operations at its Youngstown, Ohio, facility while the company undertakes an upgrading at the Ohio facility.

Earlier this year the company announced the purchase of a 44-acre parcel, including a 177,500-square-foot building, in the Buffalo area to house an 80-inch by 104-inch auto shredder. According to a Metalico release, after reviewing market opportunities, the company has decided to build a larger 96-inch x 104-inch shredder and upgrade the facility's downstream non-ferrous metals processing and recovery systems.

For the Buffalo project, Metalico has retained Hammermills International, Tulsa, Okla. to provide the complete design, fabrication, installation and commissioning of the auto shredder, which will be powered by a 4,000 HP motor, and a related downstream plant on a full turnkey contract basis.

Construction of the shredder is presently underway. The company hopes to begin shredding at its Buffalo site by October 1, 2011.

"We've been targeting plans for internal growth for quite a while now, but the timing for our projects in Buffalo and Youngstown could not have been better as we continue to experience great momentum and robust activity in all sectors of our business,” says Carlos Aguero, Metalico’s president and CEO, in the release.

"We are very optimistic that first quarter results will reflect an improving economy, strong commodity pricing environment and the significant benefits of our broadly diversified operations."

The company also notes that for the past year it has been considering relocating its Youngstown, Ohio scrap metal operations, as well as improving the facility. After deliberations, the company has decided to keep the Youngstown operations at its present location, and will overhaul and upgrade the facility, as well as the company’s nearby Warren, Ohio facility. In deciding to upgrade the existing site, Metalico says that it expects to see significant expansion of its business activities in the Youngstown/Warren, Ohio area. The company says that improvements to the site may include regrading, paving, fencing, landscaping and equipment upgrades.

As part of the improvement plan, Metalico has decided to shut down and dismantle its Youngstown auto shredder. The Youngstown facility will continue to purchase shredder feedstock, but will forward materials to Metalico's Neville Island, Pa., shredder. The changes in Metalico's flow of shreddable feedstock should have only a minor impact on the company's suppliers, according to Metalico.

The company adds that it expects to eliminate certain operating costs when the Youngstown shredder is shut down. Meanwhile, the company expects the lost shredded tons will be produced and replaced by Metalico’s more efficient shredder in the Pittsburgh area.

The company will monitor and analyze market conditions to determine when and whether to build a new shredding plant in the Youngstown market.