Hilco and MCM purchase ship recycling and scrap processing complex in Texas

Hilco Redevelopment Partners, Northbrook, Illinois, a unit of Hilco Global (Hilco), and MCM Marine Services, an affiliate of MCM Management Corp. (MCM), Bloomfield Hills, Michigan, have announced they completed a transaction to purchase the assets of one of the largest and busiest ship recycling and scrap processing companies in the world, formerly known as ESCO Marine.

The new joint venture company will be opened under the name SteelCoast with a new management and operations team to begin running the business immediately. SteelCoast's headquarters are in Brownsville, Texas.

The joint venture deal closed May 1, 2017, following U.S. Bankruptcy Court proceedings presided over by Judge David R. Jones. Hilco and MCM acquired the assets from the previous ship recycling and scrapping operation, which were sold following a chapter 11 bankruptcy proceeding filed in late 2015. Financial details and purchase price were not disclosed.

Hilco Redevelopment Partners EVP and SteelCoast board member Roberto Perez says, “Putting a deal together to acquire and relaunch this unique ship recycling and scrap processing business was complex, especially given the nature of the assets and our goal of maintaining key U.S. government client relationships. Following a lengthy diligence process, we are confident that SteelCoast has a very substantial growth path.”

Rob Mardigian, CEO of MCM and SteelCoast board member, says, “Hilco and MCM have become very proficient at identifying new opportunities for industrial facilities that many have viewed as too challenging to tackle.”

MCM and Hilco have collaborated on industrial real estate remediation and redevelopment projects in recent years, including major automobile OEM sites, energy generating facilities and, recently, the 3100-acre redevelopment project called Tradepoint Atlantic, the former site of Bethlehem Steel in Baltimore.

The companies say SteelCoast is expected to be one of the largest and most technologically advanced reclamation, remediation and recycling firms in North America. The Brownsville facility, which already has undergone more than $1 million in renovations and improvements, will provide a complete end-to-end solution, including recycling of huge oceangoing vessels (military and nonmilitary) from around the world.

SteelCoast also will dismantle decommissioned, idled or underused oil rigs, train locomotives, railcars and other industrial and commercial sources of recyclable metals. Additionally, SteelCoast will process automobiles and other light metal products in its 4,500-horsepower shredder. These types of reclamation and recycling projects allow for the scrap processing of ferrous and nonferrous metals during the dismantling process. SteelCoast will then work to process and resell the scrap to be used in various other manufacturing industries.

Hilco and MCM also have announced the hiring of Kris Wood as CEO at SteelCoast and say they are in the process of adding an experienced operations and management team.  Working with Wood over many months, SteelCoast has developed a detailed business plan that includes an investment in sales support to build upon its client base, which includes contracts with the U.S. Navy and marketing and reselling of the recyclables. SteelCoast also has immediate plans to invest millions of dollars more into the infrastructure, berths, technology and equipment to ensure the facility is a leading state of the art, world-class ship recycling and scrap processing facility, the companies say.

Wood has experience within the ship recycling and scrap processing industry.   As a lifelong south Texas resident, he worked at the former company for more than 12 years, having touched almost every operational and administrative aspect of the business as he added new management responsibilities throughout his career.

“I’m excited to take on this opportunity to build SteelCoast and establish its place atop the industry, in Brownsville and with our employees,” Wood says.

Wood has led several key team projects over the years, including oversight of key U.S. Navy and MARAD initiatives.

Wood says, “I understand that building a hardworking and trusted employee base is vital.  I’m excited that SteelCoast will bring back hundreds of jobs to the community which knows this business well.”

The company indicated that it would have approximately 130 employees by the end of May 2017, with plans to hire 80 to 90 more in the coming months.

Eduardo A. Campirano, port director and CEO of the Port of Brownsville, says, “We couldn’t be more pleased that Hilco and MCM will open its recycling facility and get business going again at SteelCoast.”  

Campirano goes on to say that Brownsville is the most strategically important place in the world for this type of work and that “it seems SteelCoast as the new company name is an ideal branding decision that actually reflects this region and its vital role as the ship recycling hub of America, providing a hardworking labor force and excellent proximity to steel-processing plants.”

SteelCoast immediately will commence the work of dismantling the decommissioned aircraft carrier USS Saratoga and former MARAD (United States Maritime Administration) vessels Shenandoah and Yellowstone.