Newsworthy

METALS

Allied Alloys acquires Blue Alloys

Allied Alloys, headquartered in Houston, has announced its Sept. 1, 2014, acquisition of Blue Alloys, a stainless steel and specialty alloys processor headquartered in LaGrange, Kentucky. The former Blue Alloys has been renamed Allied Alloys Midwest.

Allied Alloys Midwest is an ownership group made up of the former management of Blue Alloys, members of Allied Alloys and Andrew Yaffe of the Yaffee Cos., Oklahoma.It brings together the knowledge and experience of Yaffe, Greenberg, Mukesh Turakhia, Adam Gutow-Ellis, Steve Jones and Terry Hancock.

This collaboration provides Allied Alloys with a fifth processing facility and allows the company to extend its commitment to customer service into the Midwest, the company says.

The LaGrange facility joins Allied Alloys’ existing facilities in Houston, Dallas and Los Angeles, allowing the company to extend its ability to serve domestic and international customers and suppliers.

“We are thrilled with the investment by the members,” says Steve Jones, president of Allied Alloys Midwest. “We look forward to elevating the experience of our consumers and expanding our reach through new synergies and product development.”

Mitch Greenberg, co-founder of Allied Alloys, adds, “Through this collaboration with Allied Alloys Midwest, we will better serve and offer more outlets to the recycling sector. Our mission is enhanced by our diversified ownership’s legacy of excellence and international reach.”

Allied Alloys says it will continue to map out its strategic domestic and international growth, bridging the gap for secondary nickel units, air-melt and vacuum alloys.

METALS

Nucor to acquire Gallatin Steel

ArcelorMittal, based in Luxembourg, and Brazil-based Gerdau have agreed to sell their respective 50 percent interests in Gallatin Steel, a flat-rolled electric arc furnace (EAF) mill in Gallatin, Kentucky, to Nucor Corp., Charlotte, North Carolina, for $770 million. Nucor says the sale is expected to be complete by the end of 2014.

Gallatin Steel began operating in early 1995 and has 1.8 million tons of annual capacity.

“Our agreement to purchase Gallatin Steel is a significant step forward in the execution of Nucor’s strategy for profitable growth,” says John Ferriola, chairman, CEO and president of Nucor. “Importantly, Gallatin will enhance Nucor’s current position serving flat-rolled customers in the growing pipe and tube segment.”

He adds, “We believe this transaction will create excellent value for our shareholders, as the purchase price represents a multiple of approximately 6.4 times estimated 2015 EBITDA (earnings before interest, tax, depreciation and amortization) before synergies and approximately 5.3 times estimated 2015 EBITDA before synergies net of anticipated tax benefits.”

Adita Mittal, chief financial officer of ArcelorMittal, says, “The sale of Gallatin unlocks substantial value for ArcelorMittal’s shareholders and is consistent with ArcelorMittal’s stated strategy of selective divestment of noncore assets.”

André Gerdau Johannpeter, Gerdau CEO, says, “The decision to sell Gallatin was made in order for Gerdau to focus on its core assets in North America.”

With the addition of the Gallatin Steel mill, Nucor operates five flat-rolled steel mills and increases its flat-rolled products capacity by 17 percent to 13 million tons annually.

 

METALS

Big River Steel breaks ground on Arkansas mill

Big River Steel LLC has officially broken ground on its $1.3 billion steel mill and recycling facility in Osceola, Arkansas, Sept. 22, 2014. The company closed on the financing needed to construct the facilty in July 2014. Construction is expected to take 20 months.

Big River Steel announced plans in early 2013 to build the “flex mill,” which the company says combines the cost advantages and flexibility of a traditional electric arc furnace (EAF) minimill with the varying production capabilities in gauge, grade and width of an integrated mill.

The mill will produce a full range of high-strength, lightweight steels used in the automotive industry; wide and thick steels used in pipe and tube applications; and electrical steels used in the energy industry.

John Correnti, chairman and CEO of Big River Steel, said in a speech during the groundbreaking ceremony, “Northeast Arkansas is my home. So, to have the opportunity to build the world’s most advanced steel mill here—powered not just by technology but by the work ethic of the people of Mississippi County—is for me an experience that is hard to put into words.”

Arkansas Gov. Mike Beebe, who took part in the groundbreaking ceremony, commented, “This is the largest single business investment Arkansas has ever seen, and Big River Steel will draw additional opportunities to northeast Arkansas. Osceola’s workforce made this a destination for Big River, but it took the efforts of many parties, including the Arkansas General Assembly, to make this historic project a reality.”

To help in the construction and financing of the Big River Steel mill project, the state of Arkansas provided a financing package that included issuing $125 million in general obligation bonds.

 

INFORMATION SERVICES

Recycling Today Media Group’s parent company relocates corporate offices

GIE Media Inc., the parent company of the Recycling Today Media Group, and a leading business-to-business media company serving some 25 different industries through print and digital magazines, websites, e-newsletters, apps, conferences, reference books and other media platforms, has moved to new offices at 5811 Canal Rd., Valley View, Ohio 44125.

For several years the company has maintained two offices in northern Ohio: one in Richfield and one in Cleveland.

GIE acquired its new office building in March of this year and has been making renovations and updates to the property.

“Since purchasing the building, we’ve made considerable investments to support the technology that drives our business and provide all of GIE’s team members with a modern, efficient and productive workplace,” says Christopher Foster, company CEO. “With 25,000 square feet, the building can easily accommodate our current workforce of 90-plus while also allowing ample room for continued growth.”

Throughout its history GIE has continued to invest in the development of leading-edge publications for the industries it serves. As the Internet has grown, and with it the development of digital media platforms, GIE has continued to expand its portfolio through multimedia platforms, video and database management tools.

Richard Foster founded GIE Media Inc. in 1980. The company began with one magazine and a staff of three in a small space above the Ohio City Tavern in the Ohio City neighborhood of Cleveland. Business quickly doubled, and GIE Media moved down the street on Bridge Avenue to a larger location that is still owned by the company.

GIE Media Inc. is a leading marketing and communications business media company and the publisher of Recycling Today, Recycling Today Global Edition, Construction & Demolition Recycling, Storage & Destruction Business and Renewable Energy from Waste magazines.

 

METALS

US court dismisses antitrust suit against LME

A lawsuit filed against the London Metal Exchange (LME) claiming it assisted firms such as Goldman Sachs and JPMorgan Chase & Co. in keeping aluminum prices artificially high has been dismissed by the U.S. District Court, Southern District of New York.

In her ruling, Judge Katherine Forrest found the LME, owned by Hong Kong Exchanges and Clearing Ltd. (HKEX), carries out some functions as an organ of the United Kingdom government and is therefore protected from lawsuits on sovereign immunity grounds.

“While not formed by the U.K. government, the LME is charged by statute with performing the decidedly public function of market regulation,” Forrest said in her decision. “The court itself initially found this result somewhat surprising and counterintuitive.”

The plaintiffs in the case included consumers of aluminum. Their suit, filed in August 2013, claimed the aluminum inventoried in LME warehouses was ultimately being taken off the market, which delayed delivery of some shipments for longer than one year.

A focal point of the suit has been the conduct involving a series of warehouses owned by Metro International, a Goldman Sachs subsidiary, in the Detroit area. In its suit, the plaintiffs said the Detroit area is where the alleged backlog of aluminum occurred.

The plaintiffs argued that the LME was not immune from the litigation because it entered into warehousing contracts for commercial purposes rather than regulatory ones.

The manufacturers accused the exchange of driving up prices in cooperation with Goldman, JPMorgan Chase & Co. and their warehousing businesses to increase profit. The banks also have moved for dismissal from the case.

The court granted the LME’s motion to dismiss and dismissed all of the pending claims against it. The court also denied plaintiffs the ability to replead the claims against the LME.

The court has not yet issued a ruling on other motions to dismiss that HKEX and LME have filed, and they currently remain defendants in the litigation.

In a statement following the ruling, HKEX says its management continues to believe the claims are without merit and expects to continue to contest all allegations vigorously.

In her ruling, Forrest also threw out the suit against the Wall Street financial institutions and commodity handlers, such as Glencore Plc. The judge said that while it was clear the actions of various defendants affected the aluminum market, there was no evidence showing that they intended to manipulate prices.

 

PAPER, INTERNATIONAL

Bio Pappel to acquire Mexican paper company

Bio Pappel, which bills itself as the largest paper company in Mexico, has reached an agreement to acquire all the assets of Mexico-based Grupo Papelero Scribe, which has been manufacturing printing and writing paper at five facilities since it was formed in 2006. Grupo Scribe also operates a trading company.

The acquisition of Scribe would give Bio Pappel more than 30 production sites in Mexico and the United States. The company says the acquisition is part of its strategy to grow and integrate its operations throughout North America and Latin America.

The purchase is contingent upon an endorsement from Mexico’s Federal Competition Commission.

If the deal is completed, Bio Pappel and Scribe would become the principal subsidiaries of Group Bio-Pappel, which would be the largest and most integrated manufacturer of paper and paper products in Latin America.

Following the acquisition, the two companies would control from 18 to 20 percent of the Mexican pulp, paper and cardboard market in Mexico, according to several sources.

 

LEGISLATION & REGULATIONS, PLASTICS

California becomes first US state to ban plastic bags

California Gov. Jerry Brown signed SB 270 into law Sept. 30. SB 270 prohibits grocery stores, drugstores and convenience stores from distributing single-use plastic bags starting July 2015.

Under the law, stores can sell paper, durable reusable bags and compostable bags for a minimum charge of 10 cents each.

The law also seeks to protect and create green jobs by creating standards and incentives for plastic bag manufacturers to transition to making reusable bags and provide financial incentives for worker retraining and company retooling.

In promoting the bill, which it sponsored, the environmental group Californians Against Waste says that more than 120 cities and counties in the state, encompassing in excess of one-third of California’s population, have adopted a local bag ordinance. SB 270 provides a uniform, statewide solution to the rest of the state, modeled after the local ordinances already in place and successfully implemented, the group adds.

“The state assembly spent a great deal of time debating the merits of this issue over the last several months and especially this week,” says Mark Murray, executive director of Californians Against Waste. “In the end, it was the reports of overwhelming success of this policy at the local level that overcame the political attacks and misinformation from out-of-state plastic bag makers.”

Additionally, SB 270 is designed to:

• ramp up the use of recycled content for reusable plastic bags (In 2016, bags will be required to have 20-percent-recycled content and in 2020 will need to be made of 40-percent-recycled content.);
• support recycling of agriculture plastic film, which is currently sent to landfills;
• require large grocery store chains to take back used bags for continued recycling;
• require third-party certification of reusable plastic bags to ensure compliance with bag standards that support California manufacturing; and
• grandfather existing local ordinances related to grocery bags.
   

 

PAPER

FutureMark Chicago area paper mill closes

FutureMark Alsip, located in Alsip, Illinois, has closed indefinitely.

FutureMark Paper Group, Manistique, Michigan, cited challenging market conditions in the North American coated-paper market as the key reason for shuttering the mill. FutureMark says Alsip was the only facility in North America making coated publication and printing papers predominantly from recycled materials.

The company’s recycled-content printing and writing paper mill in Manistique will continue to operate.

“This is an extremely difficult decision for us given the exceptional achievements of the Alsip mill in producing coated papers with unmatched levels of recycled content and the dedicated work of all of our employees,” says Stephen Silver, CEO of Alsip. “We explored many options to avoid this action, but the brutal reality for all coated paper manufacturers today is that falling demand and pricing pressure from lower-quality uncoated substitutes has driven prices to near historic lows. Combined with massive increases in energy costs over the winter, this pricing pressure has made it impossible for us to continue our Alsip operations at this time.”

FutureMark says it has explored all alternatives for avoiding the shutdown, including expanded debt facilities, locating new investments and the possible sale of the company. It also received cooperation from its union and salaried employees in the form of wage concessions. However, some recent operational issues on top of continued poor market conditions led to a severe liquidity crisis, the company says.

FutureMark says it is working with an investment bank with a background in the paper industry to assist in evaluating alternatives for maximizing the value of Alsip in a sale—including converting the facility to a standalone deink pulp mill for the sale of recycled fiber; using the site to manufacture tissue; converting the mill for the manufacture of packaging papers; or continuing its current line of coated papers.

 

ELECTRONICS

Redemtech co-founders create Sage SE

Robert Houghton and Jill Vask, two electronics recycling sector veterans, have jointly formed an IT asset disposition (ITAD) and refurbishing company called Sage Sustainable Electronics LLC, headquartered in Columbus, Ohio. The company says it will have a processing facility at its Columbus headquarters as well as processing operations on both the East and West Coasts.

Vask and Houghton co-founded the firm Redemtech in 1998. That company, a two-time Gartner Magic Quadrant leader in ITAD, was sold to Arrow Electronics in 2012.

According to Houghton, CEO of Sage, the company’s business model is based on using innovative methods and up-to-the-minute technology to reuse more and recycle less of what it receives, improving financial and environmental results for customers.

The company says it expects to launch its national service Jan. 6, 2015.

 

METALS

Huntington Aluminum to expand operations

Huntington Aluminum Inc., a metal recycling firm based in Huntington, Indiana, has announced plans to invest more than $2.75 million to construct and equip a 40,200-square-foot addition to its operations in Huntington, doubling the size of its facility.

The company says the expansion will allow it to recover from a warehouse fire in April 2014, increase production capacity at the facility and accept new orders.

“We are pleased that the state of Indiana, the city of Huntington and Huntington County are all helping us grow as a company right here in Huntington,” says Roger Kilty, owner of Huntington Aluminum. “We were at a crossroads: either stay as we are and turn away business or expand. We’ve chosen to expand in Indiana.”

Founded in 2011, Huntington Aluminum collects and processes aluminum and scrap metal, specializing in the aluminum 356 alloy. The company serves the automotive industry.

 

ELECTRONICS

Creative Recycling files for bankruptcy protection

Creative Recycling, a Tampa, Florida-based electronics recycler, has filed for bankruptcy protection and is looking at suitors.

The company’s receiver and chief restructuring officer Robert Swett is managing partner with Robert Swett Consulting LLC, a Florida-based business consulting group that specializes in turnarounds, crisis management and financial solutions.

A Tampa Bay Business Journal article posted online Sept. 8, 2014, notes that Sweet has found three “interested strategic buyers” for Creative Recycling’s assets:

• Colt Refinery & Recycling, New Hampshire, which processes more than 20 million pounds of electronic material yearly;
• Kuusakosi Recycling, which has electronics recycling operations that span 12 countries and 48 U.S. states and has begun converting CRT (cathode ray tube) glass to alternative daily cover at landfills and has its U.S. headquarters in Plainfield, Illinois; and
• CIMMA Recycling, based in Lakeland, Florida, which is backed by the appliance recycling firm JACO Recycling.

Creative also has three unnamed private equity groups interested as financial investors, the article notes.

 

MUNICIPAL

Parties file suit over Indianapolis recycling contract

RockTenn, a Norcross, Georgia-based papermaking and recycling company; Graphic Packaging Corp. (GPC), a Chicago-based papermaker; and Cathy Weinmann, a resident of Indianapolis, have filed a suit against the city of Indianapolis’ Public Works Department over its award of a large contract to the waste and recycling firm Covanta. The contract calls for Covanta, Morristown, New Jersey, to build and operate a large mixed waste processing facility in the city adjacent to Covanta’s existing waste-to-energy (WTE) plant.

According to the Indianapolis Business Journal, the plaintiffs have asked a judge in Marion County, Indiana, to halt the agreement between the city and Covanta. The three plaintiffs claim the $110 million contract, which includes the construction of a $45 mixed waste materials processing facility, did not go through the normal bidding process.

 

MUNICIPAL

North Carolina seeks household recycling data

How many pounds of recyclables does a household generate annually? What is the commodity profile of that material? If you think your city or county knows these answers, the state of North Carolina wants your input.

According to North Carolina recycling officials, these figures will help to:

• benchmark the total amount of residential recyclables generated in a given community, state or region;
• gauge current residential recycling programs performance against the theoretical recovery maximum;
• ballpark participation rates by community and by commodity;
• understand how much of each commodity is in the residential stream;
• provide critical data for local or state planning and reporting processes; and
• track the performance of newly proposed mixed waste processing plants.

North Carolina is asking for:

• waste and recycling data that is as purely residential as possible;
• definitive numbers on households served by both solid waste and recycling collection programs;
• sound data on the total tonnage of recyclables collected from households;
• sound data on the total tonnage of solid waste collected from households;
• a relatively recent residential household waste characterization to determine how much of the disposed solid waste stream is recyclable; and
• the residential recycling commodity breakdown from a community’s material recovery facility (MRF).

State and local governments willing to share this information are asked to contact Rob Taylor at rob.taylor@ncdenr.gov or Matt James at matt.james@ncdenr.gov of the North Carolina Department of Environment and Natural Resources.

Data will be updated and shared as the project continues, says the department.

 

METALS

UBC recycling rate stands at 66.7 percent

Three trade associations—the Aluminum Association, the Can Manufacturers Institute (CMI) and the Institute of Scrap Recycling Industries (ISRI)—have announced that the recycling rate for used aluminum beverage cans (UBCs) reached 66.7 percent in 2013, the third time in a row the rate topped 65 percent.

The Aluminum Association, Arlington, Virginia, notes that the UBC recycling rate averaged 54 percent in the prior decade.

According to the Aluminum Association, while the UBC recycling rate has risen significantly over the past decade, much of the growth in recent years has come from the addition of imported used cans entering the U.S. recycling stream. Because of aluminum’s high inherent value and the closed-loop recycling process of can making, U.S. recyclers often import used cans from Canada, Mexico, Saudi Arabia and other countries.

While the number of imported cans decreased slightly from 2012, the number of cans recycled by U.S. consumers increased slightly, offsetting the decline, the associations say.

“We’ve made steady progress on can recycling in the industry, especially during the past several years, and that’s something we can all be very proud of,” Heidi Brock, president and CEO of the Aluminum Association, says. “But consumers have a big opportunity to help increase can recycling as well. Recycling your used beverage can is one simple way to make a huge difference to the environment and the economy.”

The Aluminum Association’s industry recycling rate is based on survey input of UBC melting facilities, including can sheet producers, can manufacturers and secondary aluminum producers, representing nearly all U.S. can recycling activity.

 

PLASTICS

ACI Plastics to expand South Carolina operations

ACI Plastics Inc., a thermoplastics processor and recycler based in Flint, Michigan, has announced plans to invest $4.1 million at its facility in Oconee County, South Carolina. (ACI was profiled in the May 2008 issue of Recycling Today, available at www.RecyclingToday.com/Article.aspx?article_id=21104.) The expansion includes the purchase of a former textile warehouse building in Westminster, South Carolina, which the plastics firm says it will remodel. The renovations are expected to be completed by the first half of 2015.

Scott Melton, president of ACI Plastics, says, “The purchase of this building is key to our strategic growth in the South. Within the next 10 years, we see our operation in South Carolina being as large as our operation in Michigan, where we operate in 225,000 square feet with 85 employees. The new South Carolina plant in Oconee County will add capacity to our paint removal and instrument panel recycling.”

ACI Plastics, in business for 28 years, has operations in South Carolina, Michigan, Arizona and Nebraska. The company specializes in paint separation and multilayer material separation for plastics primarily from the automotive industry. The company says it also has seen growth in recycling scrap plastics from the medical industry.

Primary services at ACI’s South Carolina plant comprise size reduction, toll grinding, product destruction, dismantling, warehousing and logistics. ACI says it will add paint removal and instrument panel recycling to the South Carolina plant over the next few years.

 

AUTOMOTIVE

LKQ to open self-service location in Nashville

Auto dismantling and recycling company LKQ Corp. is building a new self-service auto recycling facility in Nashville, Tennessee. Dudley Smith, a regional vice president for Chicago-based LKQ, says the facility will be approximately 20 acres in size and should be open for retail business by the first quarter of 2015.

LKQ plans for the location to house 1,500 cars and to employee 25 people. According to a report in The Tennessean newspaper and website, the facility will cost $1.2 million and will include an 11,200-square-foot storage and equipment building.

In choosing Nashville for its 72nd location, Smith says LKQ looked at the demographics of the area and the current business environment.

LKQ also says it plans to build its third auto recycling yard in Tennessee in Chattanooga. The company has an existing facility in Memphis, Tennessee, that is full service.

PLASTICS

Zzyzx Polymers receives National Science Foundation grant

The National Science Foundation (NSF) has awarded Zzyzx Polymers, Allentown, Pennsylvania, a Small Business Innovation Research (SBIR) grant for $737,000. Zzyzx says the grant will support research and development efforts on the company’s plastic polymers manufacturing process.

“We are grateful to the National Science Foundation for their support of this project, and we look forward to bringing our technology to the plastics market,” says CEO Mike Janse.

Zzyzx Polymers says the SBIR Phase II project will demonstrate the first commercial-scale processing of postconsumer plastic materials for what it calls “high-value applications” using an approach known as continuous mechanochemical compatibilization (CMC).

The project will use CMC to recycle plastics without extensive cleaning or sorting, reducing processing steps and returning value to the materials in a cost-competitive and significant way, says Zzyzx.