Recyclers eye M&A, new streams in growth

Apr 22, 2014 | 04:17 PM | Sean Davidson

Tags  scrap, ferrous scrap, nonferrous scrap, metal recyclers, mergers, acquisitions, growth opportunities, e-scrap Sean Davidson

NEW YORK — Metal recycling companies struggling to find better margins should focus on increasing their recycling streams and consider mergers and acquisitions to drive growth, according to market participants.

The expansion of recycling activities is the main focus area for growth for 36 percent of respondents to an AMM survey, while a quarter believe that strategic shifts—mergers, acquisitions, consolidations and rationalization—could help bring growth to an industry battling hyper-competitive markets (amm.com, April 7).

Suppliers cited vertical integration, downstream recovery systems and the broadening of recycling product mixes as other potential opportunities for growth.

"I suspect growth can come from nontraditional areas, such as electronics and plastics," one Midwest dealer said.

Recycling all types of materials, including electronic scrap, plastics and paper, and not just metals, could help some find improved margins, while pure ferrous scrap recyclers could do well to branch into nonferrous metals and specialty shredding, others said.....





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