Steel is the new steel

Is recycling the new manufacturing?

Hamilton is home to an increasing number of companies that are taking trash and turning it into treasure. Think salad dressing, soap, steel and Styrofoam. Local companies are diverting a whole host of items from landfills, giving them a new purpose, and in the process, creating big business.

Lisa Grace Marr reports on the growing trend.

Hamilton is a hub in the North American scrap metal commodity market

There is a chef in the cafeteria, artwork on the walls and a viewing window overlooking the pristine indoor 62,000-square-foot non-ferrous sorting facility at American Iron & Metal (AIM).

It seems a long way from the scrap business on Windermere Road with heaps of rusty metals, workers pulling out copper strips from steel ready to be crushed into cubes, and dust everywhere (not to mention it was once at the centre of the infamous dispute between Chester and Morris Waxman).

This is the new other steel sector in Hamilton’s economy — scrap companies that have consolidated and grown, watch currency markets like any other company that deals in a global commodity, that count their revenues in the billions, and Fortune 500 companies as customers.

It’s a natural evolution, shrugs Colleen Burns at AIM.

“Our customers are more sophisticated than ever so we have to be too.”

Scrap metals and steel represent the lion’s share of industrial recycling in Canada with an estimated 16 to18 million tonnes of scrap metal handled each year, according to the Association of Recycling IndustriesEND.

It is a sophisticated commodity market and Hamilton is a hub of that commodity, part of the reason why AIM located here in 2007 among its many competitors. One of those is Triple M, which just spent $25 million on a new sorting facility near Parkdale Avenue.

AIM, based in Montreal, has invested $45 million in Hamilton and now has about 90 employees at its Windermere Road facility.

Some of the new technologies AIM has invested in include advanced sorting equipment, an ATM-style machine that automatically issues cash to peddlers at the door, a logistics nerve centre with a GPS tracking system for its trucks and an X-ray screening system to check all trucks entering the property for nuclear or other hazardous wastes.

AIM is also diversifying, forging a relationship with Kenny U-Pull auto parts firm END which has a facility on 10 acres of AIM’s 50-acre property.

“It’s a great opportunity,” said Burns. “Ninety per cent of what is salvaged off of a vehicle is non-ferrous. It’s plastic bumpers, windshield wipers.”

And while vehicles still make up some of what AIM deals with, the company deals with virtually all areas of scrap metal and steel.

“We’ll do everything — peddlers, cars, it’s all part of that blend,” said Burns. “The schoolteachers who collect pop tabs or grandmas and grandpas for education funds, we get a lot of that. It’s a small percentage but interestingly enough we have a few organizations which solicit scrap for organizations.”

Stephen Mangotich at AIM said the organization is global in its outlook. The Hamilton location has a rail yard at the back of the property with rail cars — made by National Steel Car in Hamilton — waiting to ship the metals away.

“All markets are our markets,” he said. “We will export it to Asia, Turkey, essentially wherever the highest prices are. The world and the market has become very small with the Internet.”

Mangotich said the global markets are challenging because it’s not just about supply and demand, it’s also about currency and logistics and new revenue streams.

“It’s incredible really that I’m talking about this — I’m just a junk dealer. The market in India … and Turkey has all but dried up so the value of the currency has become of vital interest to us. Recently, we have had to shift our focus to the domestic — including U.S. — market.”

Profit margins are now directly affected by those vagaries of the global economy, he said, so that operations must run as smoothly, smartly and efficiently as possible. Moving to Hamilton is just part of those calculations.

“We had to have a presence in Ontario and Hamilton is a good place to start.”