Founded in 1956, Columbus Recycling has a well-established customer-focused business that purchases and processes scrap metal from industrial manufacturers, local recycling companies, and individuals, and sells the recycled products to regional foundries and steel mills
Schnitzer has agreed to acquire leading US metal recycler in Southeast. (Credit: Gerd Altmann from Pixabay)
Schnitzer Steel Industries, Inc. (NASDAQ: SCHN) is pleased to announce the successful restart of production at its Cascade Steel Rolling Mills in McMinnville, OR. The Company is also pleased to announce that it has entered into an agreement to purchase the assets of Columbus Recycling in the Southeast region of the United States.
Cascade Steel Rolling Mills Restart
Earlier this week, Cascade restarted production following the substantial completion of replacement and repairs of property and equipment at the mill’s melt shop that had been lost or damaged by a fire on May 22, 2021. Cascade has resumed operations with a full workforce several weeks ahead of schedule and is accepting orders for its full range of finished steel products based on the rolling schedule. Due to the timing of the restart and the ramp up in operations, Cascade is expected to complete a limited number of sales prior to the end of August, the close of Schnitzer’s fiscal year.
Tamara Lundgren, Chairman and Chief Executive Officer of Schnitzer Steel Industries, stated, “I am proud of our team’s exceptional efforts to bring the mill back into production ahead of schedule, enabling us to support our customers with high quality finished steel products. Cascade is powered by electricity that is more than 95% carbon-free. Combined with the use of recycled metal as its primary raw material, the steel made in our electric arc furnace steel mill has an exceptionally low carbon impact as compared to the industry average.”
Agreement to Acquire Columbus Recycling
On August 12, Schnitzer entered into a definitive agreement with Columbus Recycling, a leading provider of ferrous and non-ferrous metal recycling products and services, to acquire eight operating facilities across several states in the Southeast, including Mississippi, Tennessee, and Kentucky. The transaction is expected to close during the first quarter of Schnitzer’s 2022 fiscal year, subject to regulatory approvals.
Founded in 1956, Columbus Recycling has a well-established customer-focused business that purchases and processes scrap metal from industrial manufacturers, local recycling companies, and individuals, and sells the recycled products to regional foundries and steel mills. Combined with Schnitzer’s nine existing facilities in Georgia, Alabama, and Tennessee, the acquired operations will offer additional recycling products, services, and logistics solutions to customers and suppliers across the Southeast, a region that is expected to see a significant increase in electric arc furnace steelmaking capacity in the coming years. In the twelve months through the end of May 2021, Columbus has delivered annual sales volumes of approximately 300,000 ferrous tons which, on a pro-forma basis, would increase Schnitzer’s total ferrous volumes by approximately 7% over the same period.
Tamara Lundgren, Chairman and Chief Executive Officer of Schnitzer Steel Industries, stated, “The acquisition of Columbus Recycling will expand our platform and offerings in a robust regional market with immediate scale and meaningful synergies. The transaction is consistent with our growth strategy to expand metals recycling operations to meet anticipated increases in steel and nonferrous metals demand driven in part by the global transition to low carbon technologies. While a variety of solutions will be required as industries, communities, and governments actively pursue carbon reduction, the increased use of recycled metals is one path that is immediately achievable.”
Ms. Lundgren continued, “We look forward to welcoming the Columbus Recycling team to the Schnitzer family, as both organizations have fostered cultures focused on operating responsibly and sustainably for their customers and the communities in which they operate.”
Preliminary Fourth Quarter Results
The Company expects to announce preliminary consolidated financial results for its fiscal 2021 fourth quarter during the second half of September, including an update on the financial impact of the melt shop fire at its steel mill and the status of the related insurance recoveries.
Source: Company Press Release