Newsworthy

METALS, INTERNATIONAL

Aleris to sell off recycling and specialty businesses

Aleris, headquartered in Cleveland, has signed a definitive agreement to sell its North American and European recycling and specification alloys businesses to an affiliate of Sherman Oaks, California-based Signature Group Holdings, splitting the company that it created in 2004 when it merged Kentucky’s Commonwealth Aluminum with Texas-based IMCO Recycling.

The sale includes 18 production facilities in North America and six in Europe. The plants engage in secondary aluminum smelting and the production of specification alloy products.

Signature has agreed to pay an aggregate of $525 million for the businesses in the form of $465 million in cash, with the remainder in cash and preferred shares of Signature Group Holdings, subject to customary postclosing adjustments.

Aleris says its decision to divest the businesses follows a strategic review process it announced in April.

When Commonwealth and IMCO merged a decade ago, the combined value of the companies was $345 million, according to Securities and Exchange Commission (SEC) filings. At 56 percent, IMCO was the larger portion of the merger, with a value of $186 million at the time.

“The sale of the recycling and specification alloys businesses will result in a stronger, more focused Aleris that will have greater flexibility to concentrate resources in the areas with the highest growth potential,” Steve Demetriou, Aleris chairman and CEO, says. “We have made a number of significant investments in our rolled-products business over the past few years to serve the automotive, aerospace and building and construction industries and remain committed to strengthening our position in these key markets.”

He continues, “The recycling and specification alloys businesses are profitable businesses led by a talented leadership team that have delivered strong operational performance.

“We are pleased that we have found a buyer that we believe will be an exceptional partner for the future growth of these businesses, and look forward to maintaining a strong commercial relationship as they will continue to be an important supplier for Aleris,” Demetriou conclude.

The transaction is expected to close in the coming months following customary regulatory approvals and closing conditions, Aleris says.

PAPER

Resolute sells off recycling assets

Resolute Forest Products, headquartered in Montreal, has completed the sale of most of its AbiBow Recycling LLC recycling collection division assets to EWJ International Inc. EWJ is an affiliate of the New York-based paper recycling firm Jordan Trading.

The transaction includes agreements for Jordan Trading to supply recovered fiber to Resolute’s Thorold, Ontario; Augusta, Georgia; and Mokpo, South Korea, paper mills.

Resolute says two of the 18 paper collection operations under the AbiBow name—those in Boston and Thorold—are not part of the transaction, though the company says it is looking for other opportunities to sell those operations.

Resolute says selling its collection division is consistent with its objective to focus on its core businesses of pulp, paper and wood products.

However, the company says it remains committed to supporting paper recycling, adding that it will produce 100-percent-recycled newsprint at its mills in Thorold and Mokpo, recycled-content newsprint at its Augusta mill and recycled specialty papers at its Calhoun, Tennessee, mill.

MUNICIPAL

Closed Loop Fund opens application process

The Closed Loop Fund (See the article “Championing a Closed Loop” beginning on page S6 of the Paper Recycling Supplement included with this issue.) has announced that it has opened the application process for municipalities and private firms in the United States seeking loans to start or expand recycling efforts. Under its charter, the Closed Loop Fund will invest $100 million over the next five years to support the development of recycling infrastructure and services through the issuance of zero- or low-interest loans.

Municipalities can apply for zero-interest loans to help build recycling infrastructure in their communities. The loans are repaid from either landfill diversion savings or from revenue generated by the sale of recyclables.

Companies that serve municipalities also may apply, and interest rates will be below market, according to the fund.

The founding members of the Closed Loop Fund include Coca-Cola, Colgate-Palmolive, Johnson & Johnson, Keurig Green Mountain Inc., PepsiCo, Procter & Gamble, Unilever and Wal-Mart, as well as Goldman Sachs.

According to the Closed Loop Fund, its success will benefit the public and private sectors. Municipalities will be able to divert recyclables from landfills, which will reduce disposal costs, generate revenue, increase local jobs in the recycling sector and reduce greenhouse gas emissions.

Additionally, companies will be able to incorporate more recycled content into their manufacturing supply chain, improving the environmental sustainability of their products and preserving the nation’s natural resources, according to the Closed Loop Fund.

Applications are available online at www.closedloopfund.com or by emailing admin@closedloopfund.com.

The Closed Loop Fund and its partners began reviewing applications quarterly Oct. 29, 2014, and funding will be granted in 2015.

METALS, INTERNATIONAL

Novelis opens production facility in Germany

Novelis, an aluminum rolling and recycling firm headquartered in Atlanta, has officially opened its aluminum ingot production facility in Nachterstedt, Germany. The company calls the facility the largest aluminum recycling center in the world.

The $258 million aluminum production plant will consume up to 400,000 metric tons of aluminum scrap per year, the company says. The smelter will convert the aluminum scrap into ingots that will be consumed by Novelis’ European manufacturing operations.

Aluminum ingots produced at Nachterstedt will be hot-rolled at Novelis’ facilities in Norf, Germany, and Sierre, Switzerland, and supplied to company operations across Europe for further processing. Finished coils of aluminum sheet will be delivered to customers primarily in the automotive and beverage can markets.

According to Novelis, the facility features technology for aluminum scrap sorting, decoating, melting and casting. The company also reports the facility will allow Novelis to process a wide range of scrap types, helping to create a more efficient closed-loop recycling system and increasing Europe’s domestic scrap consumption.

Phil Martens, president and CEO of Novelis, says, “The Nachterstedt recycling center is a significant step toward our goal to be the world’s low-carbon aluminum sheet producer, shifting our business model from a traditional linear approach to an increasingly closed-loop model.”

Martens adds, “This new facility further strengthens Novelis’ leadership in Europe and, together with our major recycling operations in Asia, North America and South America, solidifies Novelis’ position as the global aluminum recycling leader.”

Over the past three years, Novelis says it has invested $500 million that has resulted in the doubling of its secondary production capacity to 2.1 million metric tons per year, increasing its recycled content from 30 percent to 46 percent.

“This strategy will enable us to accelerate and capitalize on the sustainability potential of aluminum as a lightweight, infinitely recyclable metal and to dramatically reduce the embedded carbon in our products,” says Martens. “In an increasingly energy- and carbon-constrained environment, we are convinced it will be a key source of competitive advantage for our company—and for our customers.”

Erwin Mayr, Novelis senior vice president and president of Novelis Europe, says, the facility incorporates best-in-class technologies. “To feed the facility, we are expanding and diversifying our scrap purchasing network to ensure the highest quality scrap is recycled back into the same product whenever possible, conserving more metal, reducing waste and using less energy than ever before,” he adds.

METALS, INTERNATIONAL

Constellium to acquire Wise Metals

The Dutch company Constellium N.V. has signed a definitive agreement to acquire Wise Metals Intermediate Holdings LLC, a private aluminum sheet producer headquartered in Muscle Shoals, Alabama. Under terms of the transaction, Constellium will purchase Wise for $1.4 billion, consisting of $455 million in cash and $945 million in the assumption of Wise’s existing debt. Constellium’s board of directors unanimously approved the transaction.

Wise’s business includes Wise Alloys, which produces aluminum can stock; Wise Recycling, a direct-from-the-public collection center for used beverage cans (UBCs); Listerhill Total Maintenance Center, which provides maintenance, repairs and fabrication to manufacturers; and Alabama Electric Motor Services, which provides equipment and services to industries, municipalities, utilities and commercial entities.

Constellium says the acquisition of Wise, which has the widest hot-strip mill in North America, will provide the Dutch company with immediate access to 450,000 metric tons of hot-mill capacity. Following the acquisition, Constellium says it intends to invest up to $750 million by 2022 to increase Wise’s current aluminum hot-mill capacity to more than 700,000 metric tons and to build 200,000 metric tons of dedicated body-in-white (BiW) finishing capacity to serve the automotive market. The new capacity investment is expected to be funded by operating cash flow generated by Wise and existing Constellium resources.

Constellium estimates that the North American market for BiW aluminum rolled products could grow from less than 100,000 metric tons in 2012 to about 2.2 million metric tons by 2025.

“The acquisition of Wise is transformative in many ways for Constellium,” says Pierre Vareille, Constellium CEO. “Wise is a natural fit with our business portfolio. The combination of their strong operating capabilities with our major position in the BiW and can sheet markets in Europe will create an outstanding platform to serve our customers. With three core businesses—aerospace, automotive and packaging—and a more balanced international dimension, Constellium expects to increase its earnings power and create sustainable value for customers and shareholders.”

David D’Addario, chairman and CEO of Wise Metals, says, “I’m excited that we have a new steward for Wise who shares our views and has the technological and financial ability to take Wise to the next level. I will be watching with excitement as Wise continues to evolve in a profound way into the future.”

PLASTICS

PET recycling rate posts slight increase in 2013

The National Association for PET Container Resources (NAPCOR), Sonoma, California, and the Association of Postconsumer Plastic Recyclers (APR), Washington, have jointly released the “Report on Postconsumer PET Container Recycling Activity in 2013.”

The report notes that the domestic recycling rate for polyethylene terephthalate (PET) bottles reached 31.2 percent in 2013, a slight increase from the prior year’s recycling rate of 30.8 percent. The report notes that slightly less than 1,798 million pounds of PET bottles were collected for recycling by domestic sources in 2013. Total PET used in the production of U.S. bottles in 2013 also was higher at 5,764 million pounds, despite sales declines in some beverage market sectors. These bottles included 475 million pounds, or about 8 percent, of recycled PET content.

“Demand for recycled PET continues to grow, with domestic use in bottles, polyester fiber and other applications increasing year over year,” says Tom Busard, NAPCOR chairman and chief procurement officer for Plastipak Packaging Inc., Plymouth, Michigan, and president of Clean Tech, Plastipak’s recycling affiliate. “Limited recycled PET supply is still a barrier to growth, but PET reclaimers really boosted their operations in 2013, easily absorbing the increase in bottles collected and pulling back material that had been exported in previous years.”

Clean PET flake produced by domestic PET reclaimers from U.S. bottles totaled 974 million pounds, an increase of 24 percent over 2012. The amount of recycled PET used across domestic end market segments also increased from 1,312 million pounds in 2012 to 1,513 million pounds in 2013, with significant gains in PET bottle and fiber end uses.

Other trends the report notes include a continued decrease in export volumes, which represented only 26 percent of total collection volumes in 2013, the lowest volume since 2004 and the lowest by percentage of total collection since 2000.

“Despite very real challenges for PET recyclers due to limited supply and decreasing bale yields, this report shows a maturing, entrepreneurial industry that continues to innovate and find new material sources and process efficiencies,” says Scott Saunders, APR chairman and general manager of KW Plastics’ Recycling Division, Troy, Alabama. “Notably, domestic recyclers are contributing more than 790 million pounds of material back into U.S. production of new PET packaging; this is a significant demonstration of domestic closed-loop manufacturing.”

While the report holds a lot of good news, NAPCOR and APR continue to acknowledge the industry’s ongoing challenges. Collection of PET bottles for recycling continues to lag far behind demand, underutilizing a robust domestic PET recycling infrastructure with more than 2 billion pounds of capacity, the associations say.

The report notes that low PET bale yields—a measure of usable PET derived from the recycling process—add significant costs to reclaimers and place stress on current infrastructure. These low yields are in light of increasing presence of non-PET materials in PET bales and the growth of nonrecyclable package innovations, the organizations note. They say they are working to increase the quality and the quantity of the supply of PET bottles by encouraging improved bale quality, promoting recycling-friendly package design, and fostering greater collection. (Design guidelines are available online at http://plasticsrecycling.org/market-development/apr-design-guidefor-plastics-recyclability.)

This is the ninth year that NAPCOR and the APR have partnered to produce a report on PET container recycling activity and the 19th year that a report has been issued by NAPCOR in its current format. The full “Report on Postconsumer PET Container Recycling Activity in 2013,” can be found on the NAPCOR and APR websites, www.napcor.com and www.plasticsrecycling.org, respectively.

PLASTICS

Overall plastic bottle recycling rate increases

A recently released report notes that domestic plastic bottle recycling increased by 120 million pounds in 2013 from the prior year, a 4.3 percent increase. The increase pushed the total amount of plastic bottles collected for recycling in 2013 to 2.9 billion pounds.

The report, “National Post-Consumer Plastics Bottle Recycling Report,” adds that the increase for the year resulted in a 2013 plastic bottle recycling rate of 30.9 percent, a 0.4 percent increase from the prior year.

The report was jointly released by the Association of Postconsumer Plastic Recyclers (APR) and the American Chemistry Council (ACC), both based in Washington.

The two associations note that the 2013 figures mark the 24th consecutive year that the pounds of plastic bottles collected for recycling have increased. The report also notes a number of trends that are affecting plastic bottle recycling figures, such as:

• The single-stream collection of household recyclables continues to grow, resulting in higher participation rates but also an increase in contamination levels.
• The use of plastic bottles in packaging applications is expanding but is offset by continued lightweighting and the increased use of concentrates with smaller, lighter bottles.
• Reclaimers are capturing greater value through enhanced sorting operations.
• The lack of access to away-from-home recycling is a barrier to increased collection.

The report finds that during 2013, the collection of high-density polyethylene (HDPE) bottles increased to 1.05 billion pounds, a gain of more than 26 million pounds from 2012. The recycling rate for HDPE bottles remained flat at 31.6 percent.

The study also reports that the domestic processing of postconsumer plastic bottles has increased. Meanwhile, exports of postconsumer plastic bottle bales declined from 28.4 percent in 2012 to 20.4 percent in 2013, the lowest level in five years. Exports of HDPE dropped 19 percent to 163 million pounds in 2013, while U.S. reclaimers imported 74 million pounds of HDPE, up from 33 million pounds (or 124 percent) from 2012.

“The data are in, and they clearly show that U.S. reclaimers are able to compete internationally to provide the recycled plastics that our customers demand,” says Steve Alexander, executive director of APR.

“Every day, we see more innovative manufacturers using recycled plastics in new and exciting ways,” adds Steve Russell, vice president of plastics for the ACC. “Each of us can—and should—help by doing our part to get more used plastics into a recycling bin.”

The 2013 survey finds the collection of polypropylene (PP) bottles rose nearly 32 percent to reach 62 million pounds. Domestic processing of postconsumer PP bottles jumped 35 percent to reach nearly 59 million pounds. PP bottles deliberately recycled as PP (instead of being blended with HDPE) increased from 34.5 million pounds in 2012 to 44.2 million pounds in 2013. Although PP caps, closures and nonbottle containers are collected widely for recycling in the U.S., these data are presented in a separate report on nonbottle rigid plastics.

Polyethylene terephthalate (PET) and HDPE bottles combined comprise more than 96 percent of the total U.S. market for plastic bottles, with PP comprising half of the remaining 4 percent, according to the report.

Data on PET recycling referenced in the report were separately funded and published by the APR and the National Association for PET Container Resources (NAPCOR). (See news story above for more details on the PET bottle recycling rate.)

The 24th annual “National Post-Consumer Plastics Bottle Recycling Report” is based on a survey of reclaimers conducted by Moore Recycling Associates Inc., Sonoma, California.

SUSTAINABILITY

P&G to expand sustainability efforts

The consumer products firm Procter & Gamble Co. (P&G), Cincinnati, says it plans to expand its sustainability goals while continuing to create value with consumer-preferred brands and products.

The company says it is using 12 established environmental sustainability goals, which include using 100-percent-renewable energy and 100-percent-renewable or -recycled materials for all products and packaging and achieving zero consumer and manufacturing waste, as a template.

“We continue to improve the environmental sustainability of our products across all aspects of their life cycle—from manufacturing, packaging and delivery through consumer use,” says Martin Riant, P&G executive sponsor of sustainability and group president, global baby and feminine and family care. “We are reducing the environmental footprint of our products for shoppers, our communities and the company while still delivering the quality and performance people expect from P&G products.”

Since establishing its goals in 2010, P&G notes that it now has 70 zero-waste manufacturing sites; energy consumption, water use, carbon dioxide emissions and truck transportation are down significantly; and the use of renewable energy and the number of virgin-materials certifications are up substantially. P&G also has expanded its social sustainability work.

The company says it is looking to build on these environmental steps by adding product packaging and water conservation.

P&G says it is on track to reduce its packaging by 20 percent per unit of production by 2020. To accomplish this, P&G says it is committed to doubling the use of recycled resin in plastic packaging and to ensuring 90 percent of its product packaging is recyclable or that programs are in place to create the ability to recycle it.

In addition, P&G says it is working across its supply chain to develop the capability to replace petroleum-derived raw materials with renewable materials, as cost and scale permit, by 2020.

MUNICIPAL

Waste Management to acquire Deffenbaugh Disposal

Waste Management Inc. (WM), headquartered in Houston, and the leveraged-buyout firm aPriori Capital Partners LP, Concord, Massachusetts, have announced the signing of a definitive agreement under which a subsidiary of WM will acquire Deffenbaugh Disposal Inc., Kansas City, Kansas.

“This proposed acquisition aligns perfectly with our goal of driving shareholder value by maximizing our focus on our core business,” says David Steiner, WM president and CEO. “It affords us the opportunity to expand our service offerings to residential, commercial and industrial customers in Kansas, Missouri, Nebraska and Arkansas and enter an attractive market—Kansas City—where we currently have very limited presence. It also allows us to replace a portion of the earnings and cash flow from our pending divestiture of Wheelabrator Technologies Inc. at an attractive price while preserving our strong balance sheet.”

Steiner continues, “Deffenbaugh’s management team runs a terrific business, and the company’s employees operate it superbly.

“I am confident that the addition of Deffenbaugh to our operations will create years of shareholder value, additional benefits for customers in the region and opportunities for the employees of both companies to learn and grow from each other’s operational, customer service and community involvement expertise,” Steiner adds.

Jim Donahue, Deffenbaugh president and CEO, says, “This is an exciting day for Deffenbaugh. Today’s announcement is a testament to our strong business operation, deep community engagement and the hard work of our employees. I speak for all of us at Deffenbaugh when I say we are excited to be joining forces with Waste Management, the largest and most respected name in the industry.”

Deffenbaugh provides services in Omaha, Nebraska; St. Joseph, Missouri; Kansas City and Topeka, Kansas; and northwest Arkansas. Additionally, the company operates one municipal solid waste landfill, one construction and demolition landfill, two material recovery facilities and seven transfer stations.

In 2013, Deffenbaugh collected more than 1.7 million tons of waste and recyclables, with the majority processed at its recycling facilities or disposed of at its landfills.

MUNICIPAL, PLASTICS

New resources promise to help communities increase plastics recycling

A group of stakeholders in the plastics recycling industry have released a set of resources designed to help communities recycle more plastics.

“Plastics Recycling Terms & Tools,” www.recycleyourplastics.org/recycling-professionals/education/terms-tools-app, have been designed to make it easier for consumers to recycle plastics and to help improve the nationwide tracking of the types and amount of plastics recycled by providing two sets of common plastics recycling terms (outreach and commodities) for use throughout the U.S. and Canada, the stakeholders say.

“Because communities across the country use slightly different terms to refer to the same things, consumers often are unnecessarily confused about what can and cannot be recycled,” according to a news release issued by the American Chemistry Council (ACC), Washington. “To help reduce confusion, Terms & Tools contain a common set of outreach terms (a glossary or lexicon) for community recycling coordinators to use when educating residents about what plastics to recycle.”

To help communities adopt the common language, an online tool aids in matching the plastics collected in a community recycling program with a common set of outreach terms. The terms, a corresponding gallery of images and an option to create a flyer (all available at no cost at www.RecycleYourPlastics.org) are designed to be used by community recyclers in developing education and outreach materials, the ACC says.

The Terms & Tools also include recycled plastics commodity terms, available at www.recyclemoreplastic.org/images/termspdf.jpg, designed to enable more accurate characterization of recycled plastic commodities and to improve tracking, the ACC says. The commodity terms, created by Sonoma, California-based Moore Recycling in partnership with the Association of Postconsumer Plastic Recyclers (APR), Washington, are intended to create greater efficiencies in used plastics buying and selling, the organizations say.

MUNICIPAL

Republic Services acquires Rainbow Disposal

Republic Services Inc., headquartered in Phoenix, has announced the acquisition of Rainbow Disposal Co. Inc., one of the largest independent solid waste companies in Southern California.

Republic Services says the deal reflects its plan to expand its business in Southern California with targeted acquisitions.

The acquired company has hauling routes in Huntington Beach, Fountain Valley, Midway City, Westminster, Orange County, Newport Beach and Irvine, California. Rainbow also has a recycling facility, a transfer station, a compressed natural gas (CNG) refueling station and a vehicle fleet powered by CNG.

“Rainbow Disposal’s highly favorable and growing market position, long-term franchise agreements and diversified service offering will make a strong addition to Republic Services,” says Brian Bales, Republic Services executive vice president of business development. “Through this acquisition, we are further enhancing our recycling and waste diversion capabilities, which will allow us to better serve California’s growing sustainability initiatives,” he adds.

As part of the transaction, Republic Services notes, the primary principals at Rainbow Disposal, Jerry Moffatt and Jeff Snow, have joined Republic Services and will now lead a newly created business unit of the company.

The new business unit will continue to serve residential and commercial customers, providing waste collection, transfer, disposal, diversified material recovery/recycling and organic composting.

“For over 50 years, Rainbow Disposal has offered thousands of customers across Southern California solutions to their waste disposal needs. We are now pleased to be a part of the industry-leading team at Republic Services, as both companies have strong values and a commitment to customer service, innovation and sustainability,” Moffatt says.

Snow says, “We have prided ourselves on providing the highest levels of customer service and community engagement while at the same time focusing on being an employer of choice to our team of 350 dedicated employees. We look forward to continuing this great tradition under the Republic flag.”

Republic Services says it focuses on providing reliable environmental services and solutions for commercial, industrial, municipal and residential customers.

METALS

Ben Weitsman of Rochester to build warehouse

Upstate Shredding – Weitsman Recycling, headquartered in Owego, New York, has broken ground on a new steel warehouse at Ben Weitsman of Rochester in Rochester, New York. Ben Weitsman of Rochester presently operates locations in Binghamton, Owego and Ithaca, New York.

The company says the new warehouse will expand its new steel division into Rochester. The groundbreaking for the building took place in the last week of September, and the company says the building is expected to be open by January 2015.

Adam Weitsman, owner of Upstate Shredding – Weitsman Recycling, says, “We look forward to expanding our new steel business into the Rochester market. Our initiative this year has been on further growing the new steel division companywide, and this fits in perfectly with our strategy. We anticipate becoming a major player in the new steel business throughout the Northeast as our footprint for scrap recycling continues to aggressively grow.”

He continues, “The two complement each other well, and we have been pleased with the increase in sales for new steel and look forward to bringing it to Rochester with a brand new 10,000-square-foot warehouse that customers and the Rochester community will be proud of.”

The company says the new steel warehouse will stock and distribute structural, flats and rounds, plate and sheet, bar stock, tubing and pipe in steel, aluminum and stainless. The Rochester location also will saw, cut and shear as well as perform rebar fabrication.

Implementation of a new enterprise resource planning system will tie all new steel locations together to keep inventory at minimum, the company adds.