Content area
Full text
Itself, formed as the result of a major merger just over three years ago, Aleris' has continued on the path of acquisitions of both recycling and rolling companies and has sold off its profitable zinc business to focus solely on aluminium.
Aleris International Inc's $194M acquisition of aluminium casting metals and molten metals producer Wabash Alloys LLC in September is not in any way out of character for the Beachwood, Ohio, aluminium rolling and recycling company which has been on a growth path almost immediately after it was formed at the end of 2004.
"Aleris has been one of the biggest factors in the consolidation of the North American rolling industry and now it looks like they are moving into the secondary alloy side, doing the same thing," says Jim Southwood, president of Commodity Metals Management Co, Wexford, Pa. "Buying Wabash fits right in its modus operandi," he continued. "It is a good fit with their facilities and with the customers that it supplies, and, more importantly, it is a good fit in terms of metal supply," explained Southwood. "Aleris makes its money by the way it purchases metal. Its secret is to keep getting bigger and bigger."
And that is just what Aleris has been doing, says Steven J Demetriou, its chairman and chief executive officer, having grown from a $2bn company when it was created through the merger of Commonwealth Industries Ine, Louisville, Ky, and Imco Recycling Ine, Irving, Texas, in December 2004, to a company with over $7bn in revenues today thanks to the series of acquisitions that it has made, including the Wabash acquisition, over that timeframe.
Aleris' strategy, he says, has been to drive productivity efficiencies, especially in the area of manufacturing, as it grows in size, both through acquisitions and organic growth.
On the acquisitions side, he says Aleris took advantage of consolidation benefits of merging similar companies together. "That has been the acquisition of core businesses that are bolt-on in nature, not veering off to new legs or new activities that don't have a lot of strategic synergies. The company is also further refining its aluminium focus through its announced spin-off of its zinc business, which operates under the name of US Zinc, to Brazil's Votorantim Metais...