Advancing in aluminum

Quite a few businesses in Wabash, Indiana, trace their roots to Gebhart Holdings, a corporation that formed in 2014 and is focused on vertically integrating business ventures. Metal Source, its flagship company, initially formed in 2000 as a zinc dross milling operation and shifted to aluminum scrap processing in 2003.

In 2014, Ben Gebhart, CEO of Gebhart Holdings, wanted to diversify his family business and expand. The company has since added a handful of central Indiana businesses to its portfolio from various industries, including Metal Source Recycling, Wabash Steel Supply, Wabash Trucking, Market Street Grill, Splash & Dash Car Wash and Wabash Property Management.

Although not all these businesses are super lucrative, Gebhart says he sees them as ways to give back to the community where Metal Source operates.

“We’re fairly active in the community. The Market Street restaurant we own, all of our employees have huge discounts there,” he says. “Employees receive discounts and priority at other assets we own in town.”

Metal Source and its Metal Source Recycling sister business have driven substantial growth for Gebhart Holdings in the last few years. These businesses operate out of two main locations in Wabash. But, in the last year, the company has added a handful of other sites in central Indiana through organic growth and acquisitions, including recycling sites in Decatur, Marion and Peru.

In the past year, Metal Source also began ramping up the amount of aluminum scrap it can process by adding two new aluminum furnaces at each of its sites in Wabash. Once the installation of the second of these furnaces is completed later this winter at the company’s Plant 1 facility on Wabash Street, Metal Source will operate a total of three aluminum furnaces in Wabash.

Colin Denihan, executive vice president of Metal Source, says the new furnace at Plant 1 will enable the company to expand into producing prime-equivalent foundry alloys. He adds that Metal Source sees potential growth opportunities in that market with the anticipated transition from internal combustion engine vehicles to electric vehicles in the near-term future. “We see that demand as a good, strong future. Our intentions were to pivot our dependency upon 380 alloys.”

Denihan says the new furnace at the company’s Plant 2 facility on Mill Street in Wabash has enabled Metal Source to increase the amount of 356 aluminum wheels it processes from 4 million to 5 million pounds per month to 8 million to 10 million pounds.

With three furnaces total, he says Metal Source will have the capacity to process more than 15 million pounds of aluminum on a monthly basis.

Photo courtesy of Metal Source

An interest in aluminum

For most of Metal Source’s history, the company has focused on processing aluminum scrap. However, it began as a zinc dross milling operation.

Gebhart’s father, Thomas, started Metal Source in 2000 after he sold his stake in S&R Enterprises. However, not long after, Thomas was diagnosed with cancer and died in 2002.

Gebhart says he always planned to work alongside his father at Metal Source, but Thomas’ death sped up that process. That year, rather than return to college to finish his bachelor’s degree, Gebhart took over ownership of Metal Source.

“When my father passed away, I took over as acting president and soon after purchased the business from my mother,” he says. “I went off to college for a semester and came back to help run the company. I was quite frankly more interested in working. I always had a fascination with the recycling industry—with aluminum, metal and helping to run a business. So, unfortunately or fortunately, I was afforded the opportunity to do that.

He adds, “Unfortunately, I did not get a lot of time to work with my father, but I guess it sparked an opportunity.”

Upon taking ownership of Metal Source, Gebhart also shifted the company’s focus from processing zinc to instead processing aluminum scrap.

“I didn’t really have a lot of direction, but I knew I wanted to do something with aluminum,” he says.

In 2003, Gebhart hired Chris Lochner, a close friend from high school, to help him grow the small aluminum processing company. Although Lochner had no previous experience with aluminum or scrap, he says he liked the idea of working for a small company.

“I really didn’t have a lot of direction other than I thought I might want to come back to my hometown. I also liked being able to start something and grow something from a relatively small business,” says Lochner, who currently serves as president of Metal Source.

Denihan joined the company in 2008 while finishing college, and Gebhart says he was instrumental in starting the Metal Source Recycling division. Although he left for a few years to work for LKQ Corp., Denihan returned about seven years ago.

Today, Metal Source operates two processing facilities in Wabash. Plant 1 has two aluminum furnaces, a nonferrous shredder, a dross milling operation, a small granulator line and a baler/logger, while Plant 2 features a 356 aluminum furnace. Both plants also are equipped with skid-steer loaders, excavators and cranes.

Gebhart Holdings has more than 250 employees across all its companies, with about 150 to 160 employees in the Metal Source business.

Lochner says Metal Source has ramped up recycling of 356 aluminum wheel scrap over the last five years, prompting the need for the additional furnaces at the company’s Wabash plants.

“Now, we’re focusing the next three to five years to add regional recycling facilities so that we can build our recycling footprint,” Lochner adds.

Photo courtesy of Metal Source

New avenues of growth

In the past year, Metal Source has grown its recycling footprint by acquiring small retail scrap yards. In 2021, the company purchased Secondary Metals, which operated a 2-acre yard in Peru, Indiana. In mid-December, Metal Source also acquired Decatur Salvage, a small scrap yard in Decatur, Indiana.

With these acquisitions, Gebhart says, Metal Source retained the employees who worked at those yards.

Metal Source also purchased a 22-acre property in Marion, Indiana, in 2021 with the intention of turning that site into a recycling facility.

He says the company made these acquisitions “in the interest of growing Metal Source Recycling.” Having these retail scrap operations helps the company to feed its aluminum processing facilities and trading capabilities.

Denihan adds that the company’s Peru yard will serve as a blueprint for how Metal Source wants future retail recycling facilities to operate as it adds more sites.

Metal Source Recycling says it aims to use the new Marion facility for shredding and milling operations.

While these small yards were the first acquisitions Metal Source Recycling made, Denihan says he expects the company will continue to expand through acquisitions in the future.

“We’d like to acquire two to three more retail recycling facilities over the next two to three years,” he says.

Gebhart says the two furnace additions will help Metal Source expand into the prime-equivalent low-copper foundry market. “Our intentions were to pivot our dependency upon 380 alloys,” he adds.