In a move bound to have ripple effects throughout the industry, a pillar of the e-scrap world has announced major closings in Canada and the U.K.
Sims Recycling Solutions (SRS), the e-scrap division of publicly traded Sims Metal Management, announced the sudden closures on Tuesday. All three of SRS’ Canadian sites will be closing – accounting for nearly 300,000 square feet of processing space – and “a substantial portion of SRS in the U.K.” will also close, the initial announcement reads.
Steve Skurnac, SRS’ president, explained the decisions in greater detail in an email to E-Scrap News:
In Canada, the recycling of e-scrap is effectively controlled by the manufacturers through a virtual monopoly organization, EPRA, that sets volumes and pricing. Without the ability to effectively manage inflows and recycling rates, it is difficult for any recycler to support investment in technology, capacity and quality standards.
In the U.K., there is a substantially more recycling capacity than material currently available in the market and as such competition for material is very aggressive. Consequently Sims is reviewing our processing capabilities in both our U.K. scrap metal division and our EU electronics recycling division to determine if there is a more competitive way for us to process available material.
EPRA’s director of harmonization, Jay Illingworth, declined to comment “until more information is provided by Sims on their restructuring internationally.”
It is not yet known which of Sims’ U.K. facilities will close. The company website lists locations in Cheshire, Middlesex, Dumfriessire, Stockton-on-Tees, Glasgow, Gwent and Warwickshire.
The company will release further findings from an ongoing review of SRS’ global “operations and strategy” on July 23. The “restructuring” is expected to cost Sims between $80 million and $85 million in charges and impair goodwill by $20 million to $30 million, the release states.
Sims recently closed facilities in Texas and New Jersey as part of larger consolidation efforts in the U.S. It was not widely known that the company was considering further closings.