Schnitzer Steel acquires Encore Recycling

Market: Metals
03/05/22

US recycler Schnitzer Steel Industries acquired Atlanta-area scrap processor and automotive shredder Encore Recycling.

The acquisition of the Lithonia, Georgia-based company includes two full-service recycling facilities, an automotive shredder, downstream equipment, a recycled auto-parts center and wire and cable processor. The deal encompassed Encore Auto Salvage, Encore Auto Parts and Recycling of Jackson, Alpine Capital, Everest Capital and Chapman Road Partners.

Terms of the agreement, which closed on 29 April, were not disclosed.

Encore processed approximately 90,000 gross tons of ferrous scrap, 14mn lbs of nonferrous scrap and 20,000 end-of life vehicles in 2021.

The acquisition comes on the heels of Portland, Oregon-based Schnitzer's 2021 purchase of Columbus Recycling, which included eight recycling facilities across several states in the southeast.

Schnitzer's southeastern footprint now includes 24 recycling facilities across Alabama, Georgia, Kentucky, Mississippi and Tennessee.

The southeast has been ripe with consolidation activity over the last few years as the region is sees significant growth in electric arc furnace (EAF) steelmaking capacity. Schnitzer rival SA Recycling also has aggressively grown in the region over the last six years.

Schnitzer plans to invest in a shredder enclosure and emission control system at the new facilities as well as stormwater infrastructure upgrades, and implementation of a US Environmental Protection Agency (EPA) approved refrigerant recovery management program.

The company agreed to institute an EPA-approved recovery management program at its 40 facilities in late-April after it was fined $1.55mn by the US EPA.

Schnitzer recently implemented a new facility fee on 15 April for ferrous and nonferrous scrap purchased at its facilities in the face of rising operating costs and additional equipment, which it has said stemmed from more stringent environmental regulations.

Schnitzer operates metal recycling facilities across 25 US states, Puerto Rico and western Canada and has seven deep water export facilities located on both the east and west coasts and in Hawaii and Puerto Rico.

The company posted a $38mn profit in its second quarter, down from a profit of $46mn a year earlier and $47mn in the first quarter.

By Brad MacAulay

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