PITTSBURGH Less than one week after the Oct. 26 expiration of a five-year no-compete agreement, the former owners of scrap recycler OmniSource Corp. have announced their return to the industry with the construction of an auto shredder in northeast Indiana.
MetalX, the Rifkin brothers new scrap-processing facility in Waterloo, Ind., will serve as the flagship scrapyard once it is complete, one of many they say are in the works.
The Rifkins sold Fort Wayne, Ind.-based OmniSource to Steel Dynamics Inc. (SDI), also of Fort Wayne, in 2007 for more than $1 billion (amm.com, Oct. 1, 2007), and the three Rifkin brothers walked out after less than a year when the marriage apparently soured (amm.com, June 16, 2008).
"We procured and are building a ferrous and nonferrous greenfield facility and believe it to be an excellent location for a regional processing center," said Danny Rifkin, president and chief executive officer of the new company. "We are installing a shredding system that can easily be expanded if inbound (scrap) warrants it."
The company expects to hold a ribbon-cutting ceremony this month at the 70-acre site, which has mainline rail access, is adjacent to an interstate and is close to other transportation. Processing efforts will be phased in starting with nonferrous baling and shearing, and the shredder is expected to be commissioned during the first quarter of 2013.
The Rifkins have assembled a team of former OmniSource executives to springboard its growth platform. Rick and Marty Rifkin will oversee nonferrous growth efforts, and Dannys son, Neal, is working at the start-up facility.
Jim Ustion will serve as executive vice president of marketing and transportation, and John Marynowski will serve in a board-level position in which he will be active in the strategic growth of the company. Both men had more than 30 years experience with OmniSource when they left in 2008.
Paul Everett will serve as chief financial officer, Jeff Ryerson will act as vice president of operations and Steve King has been named vice president of marketing, focusing on industrial marketing and transportation.
Brian Brown will serve as vice president of engineering and will be responsible for designing and overseeing the construction of the shredder. Shari Zink will oversee administrative functions.
"We have assembled a tremendous management team with a lot of experience and a pretty diverse skill set. We have all worked together before," Rifkin said.
Rifkin said that Waterloo is near his home and seemed a logical choice for the first scrapyard, but he expects to add more assets to the companys portfolio in short order. "We have identified half a dozen regions in the country where it appears there is an opportunity for a niche business with a different strategy," he said. "We thought it best to start in an area we are familiar with and to restart relationships."
Rifkin said the company expects to complete two acquisitions in the first half of 2013 and a total of three or four before the end of next year.
"We can access a lot of mills in this region. When we look at some other regions we plan to enter, there could be an opportunity to export," he said.
The companys strategy is return to its scrap roots and focus on industrial accounts.
"The MetalX strategy is to build a strong business culture among us and focus on suppliers and generators. We have always thought the sourcing of scrap is a key element to the business," Rifkin said. "It appears to us in the industrial and wholesale sectors that suppliers and generators have been disregarded a bit. We intend to focus on those relationships, and think that will differentiate us."