Global View

Sutcliffe and Neu

GAINING CLOUT. With their combined operations in North America known as Sims Hugo Neu, the company catapulted up the rankings to become the largest metal recycler in the world.

By adding Hugo Neu, Sims Group not only grew to include 30 different facilities on the East and West coasts of the United States, it has also inherited New York City’s revived curbside recycling program. Sims Group had already enjoyed a prominent role in the European and Asian markets, a position achieved through internal growth as well as through strategic acquisition.

When the merger was first announced, Sims cited how the impending deal would increase the international presence of its core business of metal recycling. While this newly acquired size may give the company a distinct advantage, Sims has avoided resting on its laurel by limiting itself to a single market. Instead, the company continues evolve, responding to environmental concerns and providing a wider array of service to communities and customers. Its business branding now extends to include waste-to-energy technology and the recycling of tires, electronics and post-consumer plastics and glass.

ADVANCING ON OPPORTUNITIES. Whether driven by the European Union’s Waste Electrical and Electronic Equipment (WEEE) Directive or by state legislation in the United States, the recycling of electronics is gaining momentum. Sims Group CEO Jeremy Sutcliffe recognized this trend from the earliest initiatives and formed the Sims Recycling Solutions division.

Based in the United Kingdom, Sims Group says this division is designed to prevent the disposal of potentially hazardous materials, such as televisions, radios, computers and other electrical and electronic consumer products. The division also focuses on investigating and implementing solutions to material streams affected by new and impending collection, storage and recovery standards.

"We started this program early to gain first mover advantage rather than wait for it to be wholly legislative driven," Sutcliffe says of the Recycling Solutions division. "We see business opportunities here."

As opposed to the company’s traditional metals recycling division, the Recycling Solutions division focuses on a fee-for-service model. This gives the company the opportunity to implement innovative technology and to use its extensive marketing know-how to process the material and to move the recyclables to better end markets.

The Sims Group’s Recycling Solutions division takes a multi-material approach to addressing and solving the vexing issues surrounding a number of materials. The goal is not only to boost electronics recycling, but also to help with the European Union’s end-of-life vehicle strategy and other legislation, according to Sims Group. To these ends, Sims has developed and expanded its refrigerator recycling operations with the addition of a plant—the first of its kind in the United Kingdom, according to Sims Group—and begun operating a tire recycling plant.

While being a large player in a fragmented electronics recycling industry doesn’t necessarily guarantee a company a major advantage, Sims’ has the resources to become more ambitious in extending its products and services. In 2004, for example, Sims acquired Mirec, one of Europe’s largest electronics recyclers. Known as Sims Mirec, the company has a proven ability to improve the recycling loop for electronics and offers comprehensive pan-European service through nine strategic locations, Sims says.

As Sims hones its expertise in electronics recycling in Europe, it develops a platform from which to expand its services to new markets, most likely North America and Australia. Sutcliffe says he’s well aware of the need to replicate this process in the United States. He also says Sims will continue to dedicate significant resources to research and develop the processing of solid waste and the separation and recycling of materials like plastics.

BROADENING ITS SCOPE. The Sims Group’s operation of New York City’s residential curbside recycling program has generated considerable attention for the company. Sims Group says it strongly supports the program, which was developed by Hugo Neu before it merged with Sims, and believes it holds significant opportunities.

Sutcliffe says that the New York City project is an excellent way for Sims to grow its business and to handle an ever-widening stream of recyclable materials. With many tons of plastics and glass arriving at its facilities six days per week, the company says it has become adept at processing and marketing the materials. The company also plans to build a new state-of-the-art material recovery facility to process the diverse stream of recyclables generated throughout New York City.

While tackling a curbside program always presents challenges, dealing with a city as diverse as New York City holds even more trials. However, according to Sutcliffe, the company has proven well suited to manage the program successfully.

"First and foremost we bring a unique infrastructure to the program. We can move by barge," Sutcliffe says. "Second, we have a strong and entrepreneurial relationship. I think we have won the respect of city officials and the public."

While industry observers were surprised by Hugo Neu bidding on and ultimately winning the contract to handle recyclables from New York City, John Neu, vice chairman of Sims Hugo Neu and Sims Group worldwide, says the new enterprise offered an ideal opportunity to broaden the materials the company recycles.

While Hugo Neu and Sims Group are most well known as marketers of scrap metal, Sims Hugo Neu Co. has been adding a number of commodities to its mix. With the New York City project, it is now charged with developing markets for the collected material, which includes plastics and glass.

Neu says he sees many similarities between marketing post-consumer plastics and scrap metals, albeit on a much smaller scale. Neu says the scale of Sims Hugo Neu allows the company entry into more end markets. "This is a key for running a global trading team" he says. "I think there was a need for a company of this size level."

Although the curbside program in New York City is the company’s first venture into recycling’s municipal side, Neu says that Sims Hugo Neu is definitely open to establishing similar operations in the mid-Atlantic region.

KEEPING UP WITH TRADITION. Many opportunities also remain in the traditional metals recycling segment. While the Midwest may seem a natural location for Sims to bulk up its North American presence, Neu says Sims will likely look to the southern United States, with its growing number of steel mills and manufacturing centers.

Sutcliffe sees China as a region that holds huge potential. This upbeat outlook contradicts many other recyclers who are challenged by Chinese economic and legislative initiatives.

"We were probably the first scrap metal company with its own office representation in Shanghai," according to Sutcliffe.

While Sims has been in the Chinese market since the early 1990s, Sutcliffe says the development of the ferrous market took much longer than initially expected. However, he says the company’s long-term commitment gives it strength and credibility moving forward.

MOVING FORWARD. Sims likely will continue to expand. However, Sutcliffe says that future acquisitions will have to make business sense.

To view a map of Sims Group's locations, click the following link: