NEW YORK Schnitzer Steel Industries Inc. has set up its
first self-service auto parts recycling facility in Rhode
Island after acquiring an existing business this past week.
Richard Peach, the Portland, Ore.-based companys chief
financial officer, told AMM that Schnitzer acquired Cumberland,
R.I.-based Bills Auto Parts under its Pick-N-Pull
Although the acquisition cost was not disclosed, AMM
understands it was below $1 million.
Pick-N-Pulls first foray into Rhode Island follows
Schnitzers increased focus on the state, where it
operates two scrap facilities in Providence and Johnston.
The company has strategically targeted expansions in its auto
parts business near existing scrap recycling facilities, adding
11 Pick-N-Pull locations over the past six months to its
previous 51 locations.
One of our main strategies has been increasing the amount
of synergy between our auto parts and metals recycling
businesses, Peach said. What we did in our fiscal
second quarter was purchase a couple of auto parts businesses
in Massachusetts which were close to our recycling facility in
Everett, Mass. This time we are buying one in Rhode Island
since we already have an export facility in Providence and
Johnston. So this continues our strategy.
Schnitzer chief executive officer Tamara Lundgren announced the
acquisition during an earnings conference call June 27.
Subsequent to the (fiscal) third quarter, auto parts
business (APB) invested in a new store in Rhode Island,
establishing our first Pick-N-Pull store in that state. This
new location is near our metals recycling operations, which
will expand APBs presence in our core northeastern market
and strengthen our regional supply chain, she said.
Since 2009, weve grown the number of our APB
locations by over 50 percent and we intend to continue to
actively grow this business. In aggregate, these investments
will enable us to further penetrate core markets for our auto
parts business, leverage existing operational resources, and
enhance scrap flows to our metals recycling business.
Lundgren said organic growth and contributions from the 10 new
locations it started during its fiscal second quarter resulted
in an 8-percent increase in vehicle purchases.
The Rhode Island Pick-N-Pull acquisition increases its combined
regional presence to 16 facilities.
During the conference call, Peach said that in the fiscal year
to date Schnitzer has invested $47 million in a combination of
new auto parts business locations and the acquisition of
noncontrolling interests in a Canadian subsidiary.
For fiscal 2013 as a whole, we anticipate cap-ex spending
of up to $100 million, of which approximately 40 percent is
related to completion of major projects in Canada and Puerto
Rico. Consequently, we expect a significant reduction in
capital expenditure in fiscal 2014.
The company is investing in new technology at its facility in
Puerto Rico to boost nonferrous metal recovery and secure
better yields and margins from scrap flows.