Tom Bird, managing director of the UK arm of metals recycling company Van Dalen, believes that, while merger and acquisition activity may give the impression that consolidation seems to be on the increase, in reality it is quality, commitment to service and choice that are gaining further traction in a fast-moving arena.
In an increasingly service-driven marketplace, those with a total commitment to customer service are not only surviving but thriving. Furthermore, those without an ongoing programme of investment both in equipment and training will be left behind and will not survive. So, the marketplace is benefitting from better choice.
From an industry perspective, many observers feel that further merger and acquisition will follow. More and more organisations are looking for a complete, pan-European service and single site businesses are simply unable to offer the breadth of capability demanded by the marketplace now. Some also believe that the middle tier is being squeezed out. However, there are alternatives to the big hitters and those options are coming from ambitious middle tier players.
Indeed, its an extremely interesting marketplace which we are all operating in at the moment. Prices on the ferrous market have remained relatively strong for the year, albeit with the inevitable dips and peaks, as and when buyers have been coming in and out of the market. An example of this is the price recovery were seeing now in both ferrous and non-ferrous after a brief dip in March and April.
Main driver
The main driver of the ferrous market has been Turkey, which has been a consistent buyer. India has also been strong on the containerised ferrous market, with an ever-growing construction need driving demand. In terms of the foreseeable future, it is anticipated that the ferrous industry will see prices per tonne vary no more than fifteen to twenty dollars either up or down which moves in line with demand. A fluctuating picture is driven in the main by the ebb and flow of demand from China, particularly in terms of copper. Europe, however, has been reasonably strong.
From our own perspective, it may well be that Van Dalen starts to look at the acquisition route. That would give us more outlets and a wider geographic spread, to complement our existing facilities. We will continue to invest, at what is an extremely exciting time for the metals sector. There will be immense change in the shape of the industry over the next five years. However, there could not be a better time to be looking for high quality partners and suppliers in the metals recycling sector.
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