Waste? Not.

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Scrap Metal Services, LLC aims to disrupt the scrap metal business

In the global metal recycling market, estimated to reach USD $434.55 billion by 2023, scrap metal makes up roughly 69 percent of total market share.  If the name of your company is Scrap Metal Services, this is a pretty nifty statistic.

Established in 2005 by brothers Jeffry and Rick Gertler, SMS has sped to the top of the heap, becoming a leader in the hotly competitive metal and scrap recycling industry. Headquartered in suburban Chicago, the company boasts over 20 facilities in the United States, Europe, and Mexico.

The firm’s divisions include Scrap Metal Services, which provides ferrous and non-ferrous processing, shredding, railcar dismantling and demolition services, SMS Mill Services, which provides efficient, cost-effective, and environmentally responsible scrap management and related support services for steel producers, and SMS Brownsville, a state-of-the-art vessel, ship, and oil rig dismantling and recycling facility and licensed environmental remediation contractor.

“We touch around 3 million tons of ferrous scrap a year and about 70 million pounds of non-ferrous scrap a year.  Our mill services operations have been handling around a million tons of scrap on an annual basis,” reported company CEO Jeremy Kirchin.

The firm’s ascension is marked by a series of savvy acquisitions and successful contract wins to create full-service offerings encompassing both commercial scrap operations and onsite steel mill services. The acquisition of All Star Metals in 2012, now the SMS Brownsville division, features a 138-acre facility where ships and other large vessels and rigs are converted into material for the scrap market.

“Shortly after that acquisition, we won the award to decommission the first aircraft carrier that was ever to be decommissioned in the United States. That was the USS Forrestal. It was a 60,000-ton vessel that over two years was dismantled and stripped, cut up and sold into the marketplace for steel consumers and producers. It was an incredible job,” Kirchin stated.

An important part of the company’s mission is to increase the amount of metal recycling as a way of contributing to the health of the planet. According to the United Nations Environment Programme, less than a third of metals have an end-of-life recycling rate above 50 percent, and SMS is working to change that.

“A car will go into a shredder and have a ferrous content of 70 percent. The residual scrap is essentially waste,” he explained. “There are high value metals from the circuit boards inside the vehicle to the platinum metals inside the catalytic converters. We extract every ounce of metal that we can out of those materials that we shred, and only the true waste — the fluff from the car seats, things like that — goes into a landfill. Our focus is to recycle every potential pound we possibly can to capture all the residual metals to avoid and improve the impact on the environment.”

SMS provides a host of metal shredding services to auto makers, foundries, marine demolition yards, scrap dealers, steel mills, and others. They demolish, too — deconstructing everything from locomotives and intermodal shipping containers to structures. When it comes to transportation and logistics, SMS takes care of all the details around moving large masses of scrap and material.

Milling around

Over the past decade, SMS has proven its ability to create exceptional value for its steel mill customers through its customized solutions.

Last year, the Gertlers established the company’s first management board, becoming co-chairs, and placing day-to-day operations in Kirchin’s capable hands. “They are entrepreneurs; they’ve built a $450 million business in less than 10 years, effectively,” he said. “To take that to the next level, and to meet the changing expectation of the marketplace and with the changes in market conditions we are moving to become more of a steel mill service company with a commercial arm.”

The shift comes to fill a gap in the marketplace that, as Kirchin put it, “is for really very competent, onsite metal processing companies to be able to supply the raw material to the furnace.” The major focus is to add value to the services they provide and maximize the value of the raw material.

“There’s a greater level of collaboration with the steel maker to take away what was traditionally some of the steel maker’s roles and responsibilities and bring them back into our fold.  The combination of both the commercial scrap marketplace and understanding what’s happening in all the automotive plants, stamping plants, you name it, we have the intel to understand the availability of material, what’s happening with the market conditions, to be able to utilize that within the mill services to help better educate and inform the steel makers. “states Kirchin.

“With the direct control of the technology we have that manages the raw material on the ground inside the steel mill which connects with the actual availability of the material in our commercial operations, we can tie the two together to create a dynamic model that helps our customers and their overall process.”

Earlier this year, the mill services division inked a multiyear contract to provide mill services to Optimus Steel, a producer of high-quality wire rods, coiled rebar, and billets. Both companies share a dedication to “safety, excellence, innovation, and collaboration,” and, according to Kirchin, “We were supplying material to them already from our facility in Baytown, Texas, and they knew about us, knew about our capabilities, and knew the quality of the product we were supplying to them to make the steel. In that relationship they saw a potential mill service provider.

“We’re thinking out of the box, thinking differently from some of our competitors. ... We stand by our word: We will implement and operate our technology which reduces our customers overall costs and provides all the critical information they require.”