Global secondary metals market 'toughest for 30 years' - BLACKMORE RICOTECH

Global secondary metals market ‘toughest for 30 years’

11th November 2016

Market conditions for commodities and metals recycling in 2016 have been the toughest for 30 years, according to Sims Metal Management chief executive Galdino Claro.

At the company’s annual address to shareholders, Claro said Sims had responded to the tough conditions by reducing overheads, selling or mothballing facilities, and accelerating the implementation of other initiatives.

“The market conditions in [20]16, particularly at the end of the first half, were not only the most difficult during my time at Sims Metal Management, but perhaps the toughest the industry has seen in 30 years.

“Facing these challenges, we did not sit idle waiting for the moment to pass. The accomplishments of this difficult work over the past financial year have meaningfully and sustainably improved our business.”

It was in November 2015 that Sims announced new plans to boost the books.

“The scope of the resetting work was extensive,” Claro said. “Twenty-nine loss-making or non-core facilities were sold or idled, overhead costs were lowered, and employee headcount was reduced by 12%.

”In total, through these initiatives, controllable costs were lowered by a further $137m (£110m) over the prior year.”

Claro said Sims had retained sufficient capacity to sell 12 million tonnes of recyclable material per annum when industry volumes recover.

His comments were backed by chairman Geoffrey Brunsdon who said that when the company launched its five-year strategic plan four years ago, commodities and metals recycling markets appeared to have reached cyclical lows.

“However, what has in fact occurred since then is that the external environment has become significantly more demanding. This has been driven by a 40% ferrous scrap price reduction and a consequent 33% contraction in our sales volumes, similar to the volume decline across our key markets.“

Claro said investment had continued with $109m going into sustaining and growth projects. He was also proud of the company’s drive towards a ‘zero harm goal’.

In 2016, 84% of Sims facilities worldwide had zero recordable injuries, and 94% had zero lost workday injuries.

“Metal recycling involves large machinery and heavy equipment in close proximity of workers. As a result, it can be very dangerous. We believe every accident is preventable and therefore our goal is simple: zero harm; no one gets hurt, either at work or at home.

“While some may be sceptical about a zero injury goal, the company’s most recent safety performance shows this goal is now closer.

Sims is one of the world’s largest metal recyclers with 200 facilities, operations in 20 countries, and over 4,750 employees globally. More than half the revenue comes from operations in the US.

Article courtesy of MRW www.mrw.co.uk

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