Metalico advances shredder plans within Buffalo
Metalico, Inc. has moved to the next phase
of its strategy for growing the company’s network-wide shredding
capacity by escalating plans for new equipment in Buffalo, New
York while suspending shredding activity in Youngstown, Ohio,
as it upgrades that site.
In February, the company purchased a 44-acre parcel, including
a 177,500 square foot building, in suburban Buffalo to house
an 80” by 104” scrap metal shredder. After additional reviews
of market opportunities, Metalico has determined to build a larger
96” x 104” shredder and to upgrade the facility’s contemplated
downstream nonferrous metals processing and recovery systems.
Separately, Metalico had been considering a potential relocation
of its Division Street operations in Youngstown, Ohio and attendant
facility improvements for more than a year. The company has elected
to remain at its existing location permanently but will proceed
with plans to overhaul and upgrade the Division Street location
and the Warren, Ohio buying site in anticipation of potential
expansion of its business activities in the Youngstown-Warren,
Ohio market and surrounding areas. Contemplated improvements
include regrading, paving, fencing, landscaping and equipment
As part of the Youngstown improvement plan, Metalico will shut
down and dismantle its aging Youngstown shredder in early April.
The Youngstown yard will continue to purchase shredder feedstock
but will forward materials to Metalico’s Neville Island shredder
in Pittsburgh until such time as Youngstown may restart its own
shredding capability. The changes in Metalico’s flow of shreddable
feedstock should have only a minor impact on the company’s suppliers.
The company does not expect a negative earnings impact from the
shutdown of the shredder since it will eliminate certain operating
costs and because most of the lost frag (shred) tons will be
produced and replaced by the far more efficient Pittsburgh shredder.
During the re-construction period, Metalico’s Youngstown yard
will continue buying, processing and selling other ferrous and
nonferrous scrap metal products and will continue to serve its
consumers as before.
The company will monitor and analyze market conditions to determine
when and whether to build a new shredding plant in the Youngstown
Construction of the shredder is already under way, and work on
the site on the border of the Town of Hamburg and Blasdell, New
York has commenced. Items of equipment requiring long lead times
have been ordered.
Metalico anticipates it will be shredding at the Buffalo site
somewhere around October 1, 2011. The company plans to have 20,000
tons of feedstock on site when the shredder becomes operational.