AIM buys stake in Mexican scrap company

Canada-based American Iron & Metal (AIM) has purchased a 50 percent stake in Mexico-based scrap recycling firm Kalischatarra, or Kalisch Recycling. The stake was purchased this August from Hong Kong-based Chiho Environmental Group Ltd., which announced the sale in late December.

Kalischatarra lists 13 plants and sales offices on its website, all located in the northern Mexican states of Chihuahua and Sonora. The website, which shows a shredding plant, says the firm strives to achieve the “separation and purification of ferrous and nonferrous materials.”

The Chiho announcement, prepared for its investors, says the other half of Kalischatarra is owned by Holding Asesoria. Chiho describes that company as being 80 percent owned by Samuel Gustavo Kalisch Seyffert and 20 percent by his father, Samuel Gustavo Kalisch Valdez.

Chiho indicates the Kalischatarra shredder yard is in Chihuahua, Mexico, and includes a downstream sorting system. It says the company sells its ferrous scrap “to major steel mills in Mexico or the southwestern United States.” It adds, “Besides ferrous metals recycling, Kalischatarra [handles] significant quantities of nonferrous collection and sorting, mostly aluminum, stainless steel and copper.”

In its statement, Chiho estimates the sale of its Kalischatarra stake will result in “an unaudited net loss of approximately $5,628,227.”

The Hong Kong-based firm says it inherited its joint venture (JV) stake in Kalischatarra when it purchased Germany-based Scholz Holding in 2016. Chiho says the relationship between the Scholz organization and the Kalisch family “had been difficult and in a deteriorating trend “ prior to its acquisition of Scholz.

Since 2016, Chiho says, it “has failed to work out a viable solution to continue the business relationship with the Kalisch Family and exercise control over the business directions and strategy of the development of the JV. There has been strategic misalignment between the seller and Kalisch family.”

Chiho, after undertaking a buying spree in the early 2010s, subsequently has been engaged in selling off its North American assets, including most of the former Liberty Iron & Metal. The company also made sudden changes to its executive team in late 2021.

This is at least the second time AIM has been a buyer of Chiho North American assets, having purchased two Liberty Iron & Metal shredder yards in 2021.