SDI completes acquisition of Mexican scrap business

Steel Dynamics Inc. (SDI), Fort Wayne, Indiana, has announced the completion of its acquisition of Roca Acero S.A. de C.V., a multilocation scrap processing company based in Monterrey, Mexico.

Roca Acero operates a ferrous and nonferrous scrap metals recycling business comprised of five scrap processing facilities it says are strategically positioned near high-volume industrial scrap sources throughout central and northern Mexico. The company also operates a 2,500-horsepower auto shredder and downstream system from Wendt Corp. that came online in January 2017.

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“We sincerely welcome the Roca team into the Steel Dynamics and OmniSource Mexico families to further solidify our growth strategy,” says SDI Chairman, President and CEO Mark D. Millett. “Combined with our existing metals recycling facilities in Mexico, the addition of Roca significantly strengthens our ferrous and nonferrous raw material procurement strategy in the region.”

Prior to the shredder installation, Roca Acero said in a 2017 profile in Recycling Today that it traditionally processed a mix of 75 percent industrial scrap and 25 percent “mixed urban scrap,” most of which is obsolete material. The shredding plant, however, allowed Roca Acero to begin processing a wider range of obsolete scrap.

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Currently, Roca Acero ships approximately 575,000 gross tons of scrap annually and has an estimated processing capability of approximately 850,000 gross tons. When combined with SDI’s existing metals recycling business, the total estimated annual ferrous and nonferrous scrap processing capability within Mexico will be more than 2.5 million gross tons.

SDI previously announced the acquisition in May, and Executive Vice President and Chief Financial Officer Theresa Wagler told Recycling Today at the time that 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.

“We believe our Mexican metals recycling facilities will provide a meaningful advantage to our electric arc furnace steel operations and planned aluminum flat-rolled products operations while also providing a high-quality, customer-centric option for our customers in Mexico and the United States,” Millett says.