Scrap Industry News

RECYCLING INDUSTRIES FILES UNDER CHAPTER 11

Recycling Industries Inc., once a rapidly growing consolidator of scrap metal businesses, has filed for Chapter 11 bankruptcy reorganization. The filing by the Englewood, Colo.-based company was filed in U.S. Bankruptcy Court for the District of Colorado.

The company’s executives blamed ferrous scrap market conditions in the second half of 1998 as the primary reason for its cash flow and debt service problems. Recycling Industries chairman and CEO Thomas J. Wiens, after noting the drop in scrap prices and volume flow caused by a glut of imported steel, said, “This unprecedented drop in scrap prices and demand, and the resulting lack of sufficient liquidity, has made it difficult for Recycling Industries to service its debt and fund ongoing operations. We have diligently examined other courses of action, but have been left no other recourse.”

The company’s operating tactic of acquiring family-owned scrap companies and attempting to integrate operations was greatly curtailed when the drop in scrap prices hit. After making a steady number of acquisitions in 1997 and early 1998, there have been virtually no announcements of new purchases by Recycling Industries since July of 1998.

Several Recycling Industries yards in the southeastern U.S. have been shuttered, reportedly because the company does not have cash available to pay for incoming scrap. The company’s stock is also scheduled to be delisted by NASDAQ, pending an appeal by Recycling Industries, it was announced in February.

Wiens does not see the company’s situation as irreversible. “Market conditions have improved over the last 45 days, and it is our intention to continue our efforts to restructure the company’s existing indebtedness through discussions with our creditors under the protection of the bankruptcy laws,” he says. “Recycling Industries is committed to diligently pursuing the Chapter 11 process to a successful conclusion and to emerge expeditiously.”

Wiens also announced that Raymond C. Lawhon has been named president of the company. Lawhon will be responsible for “financial and operation aspects of the company,” says Wiens.

DOLE HEADS ISRI SPEAKER SLATE

1996 Presidential candidate Bob Dole will be among the main attractions at the 1996 Institute of Scrap Recycling Industries Inc. (ISRI) Annual Convention, to be held April 13-17 in Orlando, Fla.

Dole will deliver his remarks at a “Power Breakfast” event scheduled for the morning of April 15. The former U.S. Senator from Kansas served as chairman of the Senate Finance Committee and was a vice-presidential candidate in 1976.

In addition to remarks from Dole and entertainment from pop singer Taylor Dayne, several educational seminars will also compete for the time and attention of attendees:

Two vice presidents from CNA Commercial Insurance Co., Chicago, will discuss insurance coverage pertinent to recyclers and all business owners.

ISRI’s Mike Mattia will offer a workshop entitled “Breaking Through the Illiteracy Barrier to Keep Employees Safe.”

Two attorneys will be part of a panel at a session entitled, “Getting Your Insurance Company to Pay for Superfund Compliance.” The panel will also hear the details of several cases and give their views of whether the insurance company involved should be obligated to honor the claim.

NBC high-tech reporter Mike Wendeland will offer bits and bytes of information in his session “Year 2000 Compliance—Are You Ready?”

Sessions on environmental technology and employee retention have also been scheduled.

FORMER SHIP BREAKER, GOVERNMENT TANGLE OVER CLEAN-UP COSTS

The officers of a Portland, Ore., company are asking for federal “Superfund” help in cleaning up land at their processing site along the Willamette River.

The state of Oregon has determined that a multi-million dollar clean-up is necessary at the Zidell Marine Corp. site, where ship-breaking activities occurred starting with the World War II years and ending in the mid-1970s. The state claims that lead, PCBs, arsenic and other contaminants are present at the site.

The site is part of a stretch of land along the Willamette River that the city of Portland is developing into a mixed residential and commercial neighborhood.

Zidell has filed for Superfund help, claiming the source of the contaminants were U.S. Navy ships accepted for ship-breaking at the site.

The clean-up has been estimated to carry a $15 million price tag. An attorney representing Zidell told the Oregonian newspaper that the Navy “disposed of their materials at our site. They have a responsibility for their share of the contamination.”

Adds attorney Dean D. DeChaine, “It’s really a contribution issue. Zidell pays for their share, and the government needs to pay its share.”

CONFERENCE LOOKS AT STEEL MILL WASTES

A May conference presented by Gorham/Intertech will present the latest technologies for processing steel mills wastes and byproducts.

“Strategies for Coping with Steel Mill Wastes and Profiting from By-Products” will be held May 17-19 in Pittsburgh. The event will present case studies on recycling electric arc furnace dust as well as new pyrometallurgical and hydrometallurgical recovery technologies.

Other conference topics include zinc, lead and pig iron recovery in the steel industry and the management of radioactive scrap, lead, sludge, oily mill scale, and basic oxygen furnace wastes.

The more than 24 million tons of slag, furnace dust, mill scale, sludge, pickle liquor and gases generated each year worldwide present “a huge resource from which metal can be recovered, recycled or converted,” according to conference organizers Andrew C. Nyce and Hugh D. Olmstead.

PLANT EMISSIONS PRODUCE LAYER OF TOXIC DUST

An explosion at a plant processing dust from a secondary zinc smelter produced a layer of dioxin-bearing dust that descended upon a German city in mid-March.

Children in parts of the German city of Duisburg were warned to stay indoors for several days after a layer of black dust was emitted from the B.U.S. Metall plant, according to an Associated Press report.

Residents were warned not to ingest the dust and to take off their shoes and wash their hands when arriving home. Many residents were disgruntled because the warnings were not issued until three days after the cloud of dust had been emitted from the plant.

Officials quoted in the AP report believe about one ton of the dust spewed from the plant, and affected a city neighborhood with approximately 4,000 people.

SCRAP COMPANY CITED IN FATALITY

A review by the Occupational Safety and Health Administration (OSHA), Washington, found 16 violations it considers serious in the wake of a fatal accident to an overhead crane operator.

A November accident at Ferrous Metal Processing Co., Brooklyn, Ohio, claimed the life of Russell Kovall, 20, who was operating an overhead crane at the scrap facility when it collapsed and crashed to the ground along with part of the ceiling structure.

Among the violations found by OSHA was that the crane was loaded with 72,000 pounds of material at the time of the accident, which was over its 60,000-pound capacity. The crane had also not been inspected fully within the past year, according to OSHA.

Company officers have requested a meeting with OSHA officials to negotiate the violations and charges, according to a report in the Cleveland Plain Dealer.

DRI PRODUCTION INCREASES IN 1998

Despite a sharp downturn in overall steel industry production, 2.5% more direct reduced iron (DRI) was made in 1998 compared to the year before.

Statistics compiled by Midrex Direct Reduction Corp., Charlotte, N.C., show 37.1 million tons of the scrap substitute material being produced in 1998, with Latin America as the number one regional producer of DRI.

Several new DRI facilities began operations in 1998, including plants in India, Mexico, Venezuela and Alabama. The new plant helped Mexico pass by Venezuela as the world’s leading DRI producer, according to Midrex.

For 1999, there are Midrex DRI production start-ups planned for South Africa, Trinidad and Egypt. Despite the start-ups in 1998 and 1999, overall production is not up dramatically due to the difficult market conditions, the company acknowledges.