Commitment to customer and environmental care – Liberty Iron & Metal helps to preserve the planet while playing a pivotal role in the recycling cycle
The United States processes enough steel and iron scrap to build 25 Eiffel Towers every day. Every year, we recycle enough copper to build the Statue of Liberty 25,000 times. The way Liberty Iron & Metal looks at it, that’s a sterling way to reduce our carbon footprint.
A significant player in the $39 billion scrap metal recycling industry, Liberty traces its roots to Erie, Pennsylvania, where it began in 1932 as a family-owned scrap yard. Thirty-five years later, the company purchased the first automobile shredder to be used east of the Mississippi and followed that advancement with a series of acquisitions that expanded their reach into Ohio, New York, Arizona, and Northern Mexico.
Liberty entered the global market in 2007, a result of their acquisition by German metal recycler Scholz Group. One of the largest recycling firms in the world, Scholz is a wholly owned subsidiary of the Chiho Environmental Group (CEG), one of China’s foremost recycling companies.
“Although generally the scrap business is regional and local, there are some important aspects for Scholz to be here in the United States,” posits Liberty CEO Mike Diamond. “By having Liberty, they have a really strong footprint in the eastern United States, specifically in the Manufacturing Belt of the U.S., where we service a strong, broad customer base. Secondly, they have the ability to globally source materials from us.”
In addition to reaping the rewards of a growing domestic market for both recycled ferrous and non-ferrous material, Liberty provides recycled non-ferrous metals specifically to the Asian markets through its trading office located in Pleasanton, California.
“Our markets tend to be somewhat local in the sense that you have to consider local market specifics in your decision making,” Diamond noted. “There are certain global trends and macroeconomic factors that impact supply and demand but being able to operate locally is a really important advantage that we have. While we have a corporate structure where Scholz and CEG are shareholders, we still have strong local decision-making capabilities at Liberty. Our management team is composed of senior operators and personnel who’ve been in the industry for decades, and we are able to make fast local decisions.
“Transparency and flexibility make all the difference,” he added. “We are empowered locally to take care of our customers and suppliers, and we speak their language which is also really important.”
Liberty defines its customer base in two ways: consumers that transform the recycled scrap supplied by Liberty to create new products, predominantly steel and pure non-ferrous raw materials like copper, and the suppliers who generate or trade scrap itself. That supplier base runs the gamut from small local companies such as construction subcontractors and plumbing companies, to large enterprises for whom metal scrap is a byproduct of their manufacturing activities.
“For our bigger suppliers we typically have contracts with them to provide additional services such as logistics, and even entire scrap recycling programs” Worth Howard, COO of Liberty, points out. “As we are part of the recycling cycle, it’s important to collect scrap, to sort it, to process it, and then to bring it back to the processors at steel mills and foundries who will generate new products out of it. It's much more environmentally friendly compared to using natural resources like iron ore.”
Fostering environmental and financial sustainability
“We are fully committed to the environment,” Howard exhorted. “When we were acquired fully by Scholz the first thing was to set up a new management team, then we established a strong, in-house environmental health and safety team for environmental management; they work together with government agencies and authorities to stay on top of the latest in regulatory compliance. There's a big trend in the environmental compliance area throughout the U.S., and one of our strategic objectives and core to our business is to stay on top of it.”
This year, Liberty Iron & Metal has been nominated by steel industry pub American Metals Market for achievements as a finalist in Environmental Responsibility/Stewardship and Scrap Company of the Year. “That shows our commitment, and also how publications in the industry see us as working in this area,” Howard added. Liberty also recently implemented additional environmental management standards like ISO14001.
“All that we collect, sort, and bring back into the economic cycle will not go to a landfill. There we have reduction essentially of what is incinerated, lower emissions, reduction of the use of landfills, and also an economic and ecological opportunity to use already used scrap from various sources and bring it back into the economy,” he said.
In 2017, Liberty Iron & Metal secured $50 million in funding from KeyBank, which is leveling the playing field with the competition in today’s hot domestic metals market. “We have a commodity-based business to run, and as such we are required to keep our financing structure flexible to absorb typical market volatility. That means that the prices for scrap and the materials that we purchase, and sell are the determining factors of our working capital needs, specifically,” Alexander Esser, CFO of Liberty, commented. “We now have a sound financing structure and optimal capital structure in place that works well in our industry.”
As part of a far-reaching global enterprise, Liberty benefits from practical lessons learned in the more mature European markets. “In the industry we certainly see a move toward consolidation. Ultimately, only a few bigger companies with sufficient funding and means will have the ability to continually compete in the future. Operating fixed costs have increased over time and will further increase, as is the focus on environmental compliance. The only side to be on is to fully comply with environmental laws and regulations, today and in the future.”
As Liberty Iron & Metal continues to fortify their market presence, they are moving on a steady growth track. “How do we do it? How do we want to get there? To make investments in people, because having the right people who have a passion for what they're doing, who have knowledge is first and foremost,” he said.
“We invest in our existing yards and in areas that enhance productivity, whether it's the effective use of IT, streamlining of processes and procedures, or through investing in technology and new equipment,” Esser said. The recent purchase of an automobile shredder modification for their Erie, PA facility will enable Liberty to shred not only vehicles, but also electric motors, which, in addition to increasing their service portfolio, eliminates the need to ship E-motors overseas for processing.
Diamond concluded, “As a team and as a company we are committed and devoted to playing a key role in the success of our consumers and suppliers, while also taking care of the environment through sustainable operations. We are doing something good for the overall environment and the local communities and economies in everything we do.”
Liberty Iron & Metal, with its network of affiliated companies, is among the leading processors and brokers of ferrous and non-ferrous metals in North America.
Their network spreads from the Northeast to the Southwest of the United States and Northern Mexico. Over the course of eight decades, Liberty Iron & Metal grew from a small family business to an innovative, technologically advanced and well experienced group of recycling companies. They provide holistic solutions and services to customers of all shapes and sizes, from big industrials, to midsize dealers, to small producers and collectors.
Liberty prides itself on maintaining strong relationships with their clients and on their ability to support local communities with easy-to-access locations while preserving the environment and boosting local economy.