A handful of waste management companies in California have sold their businesses to Burrtec, citing anticipated difficulties in complying with new organics legislation.
A handful of family-owned waste management companies in California have sold their businesses to Fontana, California-based Burrtec Waste Industries, citing anticipated difficulties in complying with new organics legislation in the state, according to Bakersfield.com. The deal, which was finalized Oct. 1, positions Burrtec to serve the municipal garbage, recycling and organic waste needs of Kern County, California.
The deal includes haulers Howard's Garbage Service Inc., Lamont Sanitation Inc., Mountainside Disposal Inc., Price Disposal Inc., Superior Sanitation Service Inc., Varner Bros. Inc. and Varner & Son Inc.. Additionally, the deal includes a pair of aggregates producers—Kern Refuse Disposal Inc. and Metropolitan Recycling Corp.
The specifics of the deal were not disclosed, but Burrtec owner Cole Burr told Bakersfield.com that he did not anticipate any personnel changes with the acquired companies.
Kern Refuse President Larry Moxley, serving as a representative of the acquired companies, noted that a larger company like Burrtec was in a better position to comply with SB 1383 legislation taking effect Jan. 1, 2022, which requires residents and businesses to divert organics from landfill.
"We had to make a business decision based on the regulations [that] were changing, how we do business and the cost of doing business and meeting all those new regulations," Moxley says.
Burr noted that the company’s infrastructure and experience processing organics via composting and anaerobic digestion will allow Burrtec to handle incoming food and green waste from customers of the acquired companies.
An application was filed Oct. 6 notifying Kern County of the intent to switch waste service providers through a contract transfer agreement. Although there's no indication of when the county board might vote on the transfer, Moxley anticipates that it will be approved.
"We have no expectation that there will be any issue with … the county," he says.
Clean Harbors purchased the U.S.-based industrial cleaning, specialty maintenance and utilities services company for $1.25 billion.
Clean Harbors Inc., Norwell, Massachusetts, announced on Oct. 8 that it has completed the acquisition of HydroChemPSC (HPC).
HPC is a Deer Park, Texas-based provider of industrial cleaning, specialty maintenance and utilities services throughout the U.S. Clean Harbors purchased HPC from an affiliate of Littlejohn & Co. LLC, Greenwich, Connecticut, for $1.25 billion in an all-cash transaction.*
With more than 5,000 employees and 240 service locations throughout the country, HPC serves a range of end markets including the refining, chemical and utilities sectors. For 2021, as a standalone company, HPC estimated that it would generate revenues of approximately $744 million and adjusted EBITDA of approximately $115 million. Clean Harbors expects to achieve cost synergies of $40 million from the acquisition after the first full year of operations through eliminating redundant corporate expenses and capturing efficiencies in customer service, transportation, branch network, asset rentals, vehicle and tank refurbishment, subcontracting and procurement.
“HPC is an established leader in industrial services, with proprietary technology and a dedicated manufacturing center to fabricate its own tools. The addition of HPC’s experienced team, considerable assets and customer base create significant strategic benefits to Clean Harbors beyond just expanding the size and scale of our operations,” Alan McKim, chairman, president and CEO of Clean Harbors, says. “We expect HPC’s automation and hands-free technology capabilities to drive improvements in safety, and the acquisition to create multiple cross-selling opportunities that will drive incremental waste into our network. We welcome HPC’s talented team of employees to Clean Harbors and look forward to a smooth integration. We remain confident that this transaction will greatly enhance shareholder value in the years ahead and will support our growth momentum in 2022 and beyond.”
* The acquisition was financed through a combination of existing cash and proceeds from Clean Harbors’ new 2021 incremental term loan financing that was completed in conjunction with the transaction. The 2021 incremental term loans were issued in the aggregate principal amount of $1 billion at a rate of LIBOR +200 basis points and will become due in 2028.
Steel producer acquires Detroit-based Ferrous Processing & Trading scrap firm.
Ohio-based integrated steelmaker Cleveland-Cliffs Inc. says it has entered into a definitive agreement to acquire Detroit-based Ferrous Processing and Trading Co. (FPT) for approximately $775 million.
Cleveland-Cliffs describes FPT as “among the largest processors and distributors of prime ferrous scrap in the United States, representing approximately 15 percent of the domestic merchant prime scrap market.”
In recent Recycling Today lists, FPT has ranked as the ninth largest overall ferrous scrap processing firm in North America and also the ninth largest nonferrous processing firm that also operates shredding plants. FPT has auto shredding locations in Florida, Michigan, Ohio and Ontario.
FPT currently processes approximately 3 million tons of scrap per year, approximately half of which is prime grade ferrous scrap, according to Cleveland-Cliffs.
FPT operates 22 scrap processing facilities, with approximately 90 percent of revenue originating from its Midwest locations, primarily in Michigan and Ohio. In the trailing 12 months ended Aug. 31, 2021, FPT generated EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $100 million, the Cleveland-based steel producer and iron ore mining firm says.
“FPT already enjoys an outsized position in automotive and industrial scrap, which is expected to grow as part of Cleveland-Cliffs,” the company adds.
“Cleveland-Cliffs is entering the scrap business as a major player through the acquisition of a large scrap company,” states Lourenco Goncalves, Cleveland-Cliffs’ chair, president and CEO. “Even more importantly, FPT has a very meaningful presence in prime scrap. With all the new flat-rolled EAF [electric arc furnace] capacity coming online in our market over the next four years, prime scrap will only become more and more scarce.”
Goncalves continues, “As the largest supplier of flat-rolled steel in North America, Cleveland-Cliffs is the main source of the steel that generates prime scrap in manufacturing facilities. Furthermore, throughout our entire footprint, Cleveland-Cliffs also consumes a very significant amount of scrap in our EAFs and BOFs [basic oxygen furnaces].”
Adds Goncalves of the strategic aspects of the purchase, “The acquisition of FPT will enhance our ability to buy back prime scrap directly from our clients, cutting the middlemen and improving the margin contribution from scrap for both Cleveland-Cliffs and for the manufacturing and service center clients that will be able to sell scrap directly back to us.”
The Cleveland-Cliffs list of “transaction rationale” aspects also includes that it:
The acquisition has been approved by the Cleveland-Cliffs board of directors and is expected to close in the fourth quarter of 2021, subject to regulatory approval and closing conditions.
India and its neighboring nations remain poised to soak up a portion of North America’s excess scrap materials.
Demand for imported scrap metal and paper remains strong in the nations of the Indian subcontinent, which include India itself and several neighboring countries, with Pakistan and Bangladesh being the largest.
The region has been beset with waves of coronavirus infections and related workplace restrictions that have, at times in 2020 and 2021, combined to make India’s still developing transportation and logistics infrastructure even more frustrating than usual.
Delays and hassles aside, the numbers show metals producers in India, Bangladesh and Pakistan remain keen to convert scrap into secondary metals that go into transportation and building products that help comprise the steady gross domestic product (GDP) growth in the region. Likewise, recovered fiber shipped from overseas is consumed vigorously by India’s paper and board producers.
As COVID-19 emerged on the global scene in the spring of 2020, India made headlines for the swift and comprehensive restrictions on movement enacted by the government of Prime Minister Narendra Modi.
Importers and exporters of scrap commodities were among those left with lengthy delays in filling out necessary documents and in getting materials moved from an inbound container to its final destination. The resulting financial hassles, such as demurrage charges, were the subject of petitions and lawsuits.
During the remainder of 2020, the situation in India improved, and scrap again began flowing into the subcontinent. COVID-19 was not finished with India, however, with the spring of this year seeing a considerable spike in cases that resulted in more workplace and freight movement restrictions.
As of mid-September, one Asia-based nonferrous trader told Recycling Today, “Indian scrap imports have been, as usual, smooth without any customs clearing.” He added, “With COVID cases having become considerably lower, industrial activities are at a peak, with scarcity of raw materials pushing buyers to buy domestically.”
The trader also mentioned two recurring issues that can threaten the flow of scrap into India: maneuvers by primary metals producers to erect scrap import barriers (to help protect their own business); and efforts by India’s largest companies, in cooperation with the government, to manage the flow of domestic scrap to serve these established firms.
The shifting of domestically generated scrap to larger scrap yards run by multinational firms could indeed raise the overall level of metal available to domestic producers. However, in a nation where a sizable army of scavengers tends to find anything of value that is discarded, some observers say it is more likely a larger volume of metal will be formally recorded as recycled rather than journeying quietly from a peddler to a small melt shop.
The investments in scrap processing infrastructure include a 500,000-ton-per-year facility commissioned by Tata Steel in Rohtak, India, in the northern part of the country.
“Recycling scrap ensures the closure of the circular economy loop,” stated Yogesh Bedi, chief of Tata’s Steel Recycling Business, when that facility opened this summer. Ferrous scrap produced at the facility, which has a shredder and a baler, is being branded as Tata FerroBaled and Tata FerroShred, with the brands designed to “give a distinct identity to the processed scrap and ensure a standardized quality product for the customer and simultaneously raise the bar of the scrap Industry,” Bedi said.
India’s primary aluminum producers often seem to expend lobbying efforts to raise taxes and introduce tight restrictions on imported scrap to stave off competition from scrap-fed secondary producers.
While those efforts can create hurdles, India’s recycled-content metals producers (and those of neighboring Pakistan and Bangladesh) have not surrendered to the primary producers.
One of India’s largest secondary aluminum producers made news in late September by filing paperwork with a regulatory agency to raise funds through an initial public offering (IPO).
Faridabad, India-based secondary aluminum producer CMR Green Technologies, formerly known as Century Metal Recycling, says proceeds from the anticipated IPO would go toward “the payment of debt and general corporate purposes.”
The company’s Managing Director Mohan Agarwal is a staunch advocate of recycled-content metals production. At the 2020 Materials Recycling Association of India (MRAI) meeting near Delhi in February of that year, he told delegates, “Scrap is the future and recycling.”
He made that statement while acknowledging India’s government sometimes imposes lofty duties on imported aluminum scrap, often swayed by lobbying from the nation’s primary aluminum producers. (MRAI was formed in part to provide a lobbying counterweight to make the case for producers of scrap-fed metal, paper and other materials.)
Despite the ongoing placement of such hurdles, CMR Green Technologies has grown to operate 12 manufacturing plants, four of which involve joint ventures with Japanese companies Toyota Tsusho Corp. and Nikkei MC Aluminium.
On the export side of the equation, statistics gathered by the United States Census Bureau and aggregated by the U.S. Geological Survey (USGS) show the scrap metal trade between the U.S. and the Indian subcontinent remains vigorous.
A portrait of recovered fiber demand in the region can be found in a recent Recycling Today profile of Amritsar, India-based Khanna Paper. That firm consumes about 600,000 metric tons of recovered paper annually in the four paper machines found on its 80-acre campus.
Khanna Paper is a steady consumer of recovered fiber brought in via inbound shipping containers. The company’s Saurabh Khanna told Recycling Today this spring, “We had 50 containers per month when we started, and now we have more than 1,000 containers per month. We have had year-over-year growth, and we have had to hire some people because of that in 2019.”
The volume of ferrous scrap exported from the U.S. to India, Bangladesh and Pakistan (combined) has been nearly identical in the first half of 2021 compared with the first six months of 2020. Approximately 1.265 million metric tons were shipped in both time frames.
Bangladesh is the biggest buyer in the ferrous sector, having purchased 622,000 metric tons, or 49 percent, of the three nations’ total. India was next, at 332,000 metric tons (26 percent), followed by Pakistan, which received 311,000 metric tons (24.5 percent).
This year, the three nations each rank among the eight largest destinations for outbound ferrous scrap. Excluding its USMCA (U.S.-Mexico-Canada Agreement) partners with land borders, Bangladesh is the fifth largest destination, India is seventh and Pakistan is eighth.
When the three nations’ appetites are combined, their 1.265 million metric tons in the first half of 2021 fall behind only Turkey as an overseas destination (and also behind Mexico, with its land border).
Figures posted to the USGS website show CMR Green Technologies is far from alone in the region in terms of importing aluminum scrap. In the first half of this year, India brought in 169,000 metric tons of aluminum scrap, with Pakistan importing another 8,100. India’s volume puts it behind only Malaysia as a buyer of U.S. outbound aluminum scrap. (And a government agency in Malaysia might be about to make shipping scrap to that nation much more difficult.)
In early October, concerns about a coal shortage have the industrial sector in India on edge. Beyond that, if India and its neighbors are able to enjoy steady economic growth, U.S.-based processors and traders of numerous scrap materials seem poised to keep the Indian subcontinent foremost in their international trading plans for several years to come.
The Terex Recycling Systems product range will initially focus on construction and demolition and commercial and industrial waste applications.
Terex Materials Processing (MP), headquartered in Dungannon, Northern Ireland, has launched Terex Recycling Systems, which will design and build modular recycling products that can be combined to provide customers with a tailored approach to meet their recycling needs. According to a news release from Terex MP, Terex Recycling Systems will support the company’s strategy to expand its offerings in the environmental industry with products that complement the existing portfolio.
“As Terex looks for opportunities to drive our business forward, the rising urgency to deal with waste globally continues to present enormous potential,” says Kenny Hull, commercial product manager at Terex Recycling Systems. “Terex MP already has significant and expanding global presence in the waste recycling industries with our existing environmental lines—Terex Ecotec and CBI. However, we see a need for products that require a more project-focused sales approach compared to traditional machinery sales.”
Terex Recycling Systems will initially focus on construction and demolition and commercial and industrial waste applications. According to Terex MP, the Terex Recycling Systems range, which is in its first phase of product development and due for release in early 2022, will include several modular products that can be combined to create stationary systems for sorting and separation of various waste streams. Products will include feeding, modular conveying systems, trommel screens, vibrating screens, metal separation, air separation and manual sorting.
“The modularity of our solutions will make our systems quick and easy to install and keep installation costs to a minimum—without compromising on performance or reliability,” Hull adds. “This approach will also add flexibility for the end-user to adapt and grow the system as their business and market demands change.”
Terex MP plans to sell the new product range through its distribution network, with its established dealers providing local project management and aftersales support.