PITTSBURGH Gerdau Long Steel North America has completed its acquisition of a Virginia scrapyard chain as part of its strategy of owning assets near its melting facilities.
The Tampa, Fla.-based steelmaker finalized the deal Feb. 1 for Roanoke, Va.-headquartered Cycle Systems Inc., which sources had suggested to AMM would happen last summer (amm.com, Aug. 14). The terms of the deal were not disclosed.
"This purchase supports our goal to minimize billet cost by having scrap sources closer to our steel mills," said Guilherme G. Johannpeter, president of Gerdau Long Steel North America, a division of Brazilian steelmaker Gerdau SA. "It will be a great advantage for our mill in Petersburg, Va., and other nearby operations."
The Petersburg facility is capable of melting 1.2 million tons and rolling 1.1 million tons of structural steel products, including wide-flange beams, annually. There is also a shredder at the Petersburg mill operated by Sims Metal Management Ltd.
"We look forward to adding Cycle Systems to our existing network of scrap processing locations. In addition to supporting our sourcing strategy, it will also grow our commitment to sustainability and the Petersburg community," said Matt Yeatman, vice president of metallics and raw materials at Gerdau Long Steel North America.
The assets will carry the Gerdau name, and the company is evaluating the existing management team.
The purchase increases Gerdaus presence in Virginia, where Cycle Systems has nine locations: Charlottesville, Covington, Harrisonburg/Broadway, Lynchburg, Martinsville, Pulaski, Roanoke, South Boston and Stuarts Draft/Waynesboro.
Cycle Systems, which has a shredder, processed 185,000 tons of scrap in 2011, according to Gerdau.