Metals

SDI acquires assets from Sims Metal Management

Sims Metal Management, an Australia-based recycling firm, has announced the sale of several scrap recycling facilities in the southeastern United States to Steel Dynamics Inc. (SDI), a steelmaker based in Fort Wayne, Indiana, that also operates OmniSource, its scrap processing subsidiary.

The sale involves yards in Tennessee and Mississippi. Sims, according to its website, had been operating one location in Tennessee, in Memphis, with an auto shredding plant and river barge access. Sims lists five locations in Mississippi: Bryam, Elliott, Greenville, Greenwood and Sherman. The Greenville yard has an auto shredding plant and river barge access.

“The sale of our metals recycling operations in the central region represents a significant step in our initiatives to divest noncore assets and reallocate capital to our key markets,” says Galdino Claro, SMM group CEO. “The divestment, in line with our strategy, will allow management to focus on our core operations.”

Russell Rinn, SDI executive vice president of metals recycling, says, “We believe these assets, located in Memphis, Tennessee, and throughout Mississippi, are well-positioned to support our Columbus (Mississippi) Flat Roll Division as we work toward greater raw material self-sufficiency in the region.”

Zhongwang USA LLC to purchase Aleris

Cleveland-based Aleris Corp., a secondary and rolled aluminum producer, has announced it has entered into a definitive agreement to be acquired by Zhongwang USA LLC for $2.33 billion, comprising $1.11 billion in cash for the equity to be paid by Zhongwang USA, plus $1.22 billion in net debt. The transaction is expected to close in the first quarter of 2017, following regulatory approvals and the finalization of closing conditions.

Zhongwang USA LLC is an investment company majority-owned by Liu Zhongtian through Zhongwang International Group Ltd., parent company of China Zhongwang, which bills itself as the world’s second largest industrial aluminum extrusion developer and manufacturer.

Aleris says it will continue to be headquartered in Cleveland and will be operated as an independent entity. The Aleris management team will remain in place, providing continuity for Aleris employees and customers and supporting the continued implementation of the Aleris strategy, according to a company news release.

Aleris says it will retain its name and “will continue to serve its customers with no changes to current operations, contracts or commitments.” It will continue to implement growth projects, including its expansion project in Lewisport, Kentucky, designed to enable the company to meet the North American automotive industry’s demand for aluminum auto body sheet.

“We are excited about this transition to strategic ownership as it will allow us to accelerate our strategy to expand our capabilities to support the production of high-value advanced materials for the global automotive and aerospace markets while maintaining our position as a leading supplier to critical regional markets like building and construction,” says Sean Stack, president and CEO of Aleris. “We expect the transition to be seamless for our employees and customers and that the new strategic shareholder will provide us with greater financial flexibility to continue to anticipate and meet the needs of our customers well into the future.”

In addition to his role at Zhongwang USA, Liu is the chairman and founder of China Zhongwang. With the acquisition of Aleris, he will oversee companies that have complementary geographic footprints and capabilities, according to the Aleris news release.

“This acquisition is an international expansion to establish a complementary business foothold, as I strongly believe in the potential and prospects of Aleris and the aluminum industry as a whole,” Liu says. “Aleris has a strong management team, talented employees and industry-leading capabilities with a complementary geographic footprint. As the company enters the final phase of its Lewisport automotive project, I believe Aleris is well-positioned to capitalize on the positive demand trends we see globally, and I look forward to supporting the Aleris management team in implementing its growth strategies and pursuing continued success with expanded resources and financial and operational flexibility.”

International Shipbreaking lands contract to recycle aircraft carrier

International Shipbreaking Ltd. (ISL) has been awarded the contract to transport, dismantle and scrap the USS Independence, a Forrestal-class aircraft carrier that the U.S. Navy decommissioned in 1998. The U.S. Navy will pay ISL $6 million for the project.

ISL, based in Brownsville, Texas, is a part of the U.K.-based recycling company EMG Group.

Under the agreement, ISL will tow the 61,000-ton vessel from Bremerton, Washington, down around the tip of South America, eventually bringing it to ISL’s Brownsville location. Despite the widening of the Panama Canal, the carrier is still too large to take that route.

Robert Berry, ISL vice president, says the company expects to start towing the vessel by the end of this year and the trip should take roughly four months. First, ISL will spend several months prepping the vessel for transportation.