Separation gives Schnitzer broader view

Oct 07, 2005 | 04:44 AM | Michael Marley

Divorce is not always a bad thing, regardless of whether it is a marriage or a ferrous-scrap export venture.

That was part of the message that Schnitzer Steel Industries Inc. executives shared with analysts last week. Responding to one question, Schnitzer president and chief executive officer John D. Carter said the separation from former joint-venture partner Hugo Neu Corp. has given Portland, Ore.,-based Schnitzer "a more direct view" of the offshore ferrous market and access to markets that it had shared with Hugo Neu.

Schnitzer and New York-based Hugo Neu completed the termination of the decade-long joint venture Sept. 30, almost four months after the former scrap partners announced their divorce plans.

Schnitzer inherited the link with Hugo Neu when it acquired Proler International Corp. in 1995. Under the divorce settlement, Schnitzer gets the New England-area scrapyards, including the big export yard in Boston, another in Rhode Island, feeder yards in Maine, Massachusetts and New Hampshire, and an export yard in Hawaii. It also receives scrap-trading operations in Denmark, Finland, Norway, Poland, Russia and Sweden, and an agreement from Hugo Neu that it will not be active in those markets for at least five years. Schnitzer also will receive $52.3 million in cash from Hugo Neu.....

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