PITTSBURGH MetalX LLC is
said to be close to finalizing a deal to buy an auto shredder
facility in Birmingham, Ala., owned by Sims Metal Management
None of the parties involved
would comment, but the industry is abuzz that Sims is divesting
the shredder in the very near future and MetalX reportedly has
locked up a deal to sell shredded scrap from the plant to
Birmingham-based American Cast Iron Pipe Co. (Acipco).
Acipco, which runs a shredder at
its pipe manufacturing facility, would eventually mothball its
equipment and secure its melting needs from Waterloo,
Acipco would become less
vertically integrated, sources said, noting that the company
had no interest in buying the shredder and moving it to its
melting facility. And MetalX wont relocate the shredder
to the Acipco facility, which could save $5 per gross ton in
transportation costs, because Acipco doesnt want an
outside party operating on its property, sources said.
Jefferson Iron & Metal
Brokerage Inc. reportedly would market the scrap at all
southeastern yards, sources told AMM.
MetalX was launched by Rifkin
brothers Danny, Rick and Marty less than one week after the
expiration of a five-year no-compete agreement when they sold
OmniSource Corp. to Steel Dynamics Inc., both based in Fort
Acipco, Jefferson Iron &
Metal and Rifkin-owned private equity firm North River Capital
LLC all hold a stake in ARC Alabama LLC, a recycling entity
that can process auto shredder residue.
The MetalX auto shredder in
Waterloo is running at capacity and the company has said it is
ready to expand (
amm.com, March 28).
In an exclusive interview in
November, MetalX president and chief executive officer Danny
Rifkin said the company expected to complete two acquisitions
in the first half of 2013 (
amm.com, Nov. 1).
There have been rumors that
other Sims assets could be picked up in the deal, but this
couldnt be substantiated.
Sims has expressed an interest
in focusing on coastal areas, which have the increased
likelihood of a strong return on its investments. It is
building a new shredder on the New England coast and is growing
its feeder yard network in the Gulf Coast.
"These actions are part of our
clear strategy to direct capital to the highest-returning
assets, with an emphasis towards water-based facilities on
brown water and blue water," Daniel W. Dienst, Sims chief
executive officer, said in a recent conference call, noting
that facilities not near exporting avenues tend to produce