“PST fits our ambitious plans for the future”
Published on 11 March 2020
The deal is sealed: ARN has sold the PST plant in Tiel to HKS Metals, a leading player in recycling. “We want to grow our business with this PST plant”, says HKS managing director Wout Kusters, while taking a look at the future together with Olaf de Bruijn (chair of Stichting Auto & Recycling, 100% shareholder of ARN).
Sometimes, successful mergers and acquisitions make for a ‘perfect fit’ and a ‘win-win’ situation. This certainly applies to the deal involving the PST plant. ARN found a perfect acquisitor in HKS, a subsidiary of a large European concern. The organisation has a strong profile when it comes to processing old iron and non-ferro materials and considers the plant in Tiel a perfect match for expanding their technology and processing capacity. Wout Kusters on behalf of HKS: “The PST plant fits our organisation and our ambitious plans for the future. We want to move forward and PST offers plenty of opportunity in that regard.”
Post-shredder activities to meet government requirement
The acquisition is a true milestone for ARN, Olaf de Bruijn emphasises. “ARN, with its stakeholders RAI Vereniging, BOVAG, FOCWA and Stiba, launched the PST plant in 2011 because commercial parties had no interest in doing so at their own expense and risk at the time. We considered ARN the right party for taking the necessary steps in order to meet the stringent government requirement of 95 percent recycling of ELVs [end-of-life vehicles]. Post-shredder activity was key. There is no way around it: the technology was largely experimental; it was a quest for the best solution. PST was and is ahead of its time.”
Hats on, hats off
De Bruijn underlines the fact that ARN’s active participation in the recycling process with the PST plant had been intended as a temporary endeavour from the start. ARN’s active participation in the chain meant ‘wearing more than one hat’, which posed a risk of ambiguity. “Now that the plant is performing well – its contribution to the recycling percentage is over 15% of the 98% total – ARN found a good takeover partner in HKS. As of now, ARN once again adopts a clear position as a chain director.”
ARN will keep monitoring performance
The acquisition involves certain challenges. ARN and HKS have made explicit agreements with regards to how the chain can maintain the required car recycling performance in the ten years ahead. “Assurance of the system with the required contribution to recycling performance must remain intact and we have made clear arrangements to that effect”, De Bruijn reports as he emphasises that ARN will keep monitoring continuity and performance. It is important that HKS’ shredders do not get a preferential position. Other Dutch shredders will retain access to the PST plant non-discriminately for their car shredder residue supply.
Other Dutch shredders will retain access to the PST plant non-discriminately for their car shredder residue supply
Car disassembly companies will retain the freedom to decide what shredder company they supply their ELVs to. In addition, De Bruijn openly expresses his expectations of HKS. “A commercial party of this calibre should be able to improve the sustainability of the recycling process in the long term.”
‘Adding value instead of speculating with iron’
HKS is a subsidiary of TSR Recycling which is part of Remondis, a large international waste processor. Kusters: “A concern committed to circularity and – importantly – prefers to build long-term relationships and partnerships. Our approach is to add value rather than speculate with iron. We prefer to recover raw materials in order to have them reused in production processes. We are an important player in the car recycling chain and want to ensure a qualitative expansion of that position”, Kusters concludes.
It should be clear that as a part of a large enterprise, HKS is able to capitalise on economy of scale in order to approach recycling with great efficiency, while deploying high-tech innovations. Kusters boasts: “We process around 1.8 million tonnes of iron annually and supply directly to large smelters such as Tata Steel, ArcelorMittal and other European steel and copper plants. With four shredder locations in Moerdijk, Amsterdam, Nijmegen and Zwartsluis, we are the Netherlands’ largest shredder company for cars, washing machines and anything else that is collected at the municipal level.”
The importance of cleaner separation is on the rise
HKS is no stranger to post-shredder activities. “We have a post-shredder plant in Amersfoort, specialised in deploying advanced technologies to separate non-ferro fractions such as copper, stainless steel, brass and aluminium. The latter involves such a high degree of purity that the material can be used for manufacturing window profiles, among other things, without any further processing required.” Kusters reports that HKS recently invested millions in a method to separate resources such as stainless steel from copper and brass even more effectively.
What value does PST add to HKS? “The plant in Tiel provides us with new opportunities for separating low and high-grade streams, including all kinds of plastics and fibres. The importance of increasingly clean separation is on the rise. The plant in Tiel comes with combined knowledge that we would like to deploy for all our streams. That knowledge and quality, as well as the associated volume, is what this is all about. Car recycling is well organised in the Netherlands with a recycling performance of 98%. But when it comes to recycling other products, the plant in Tiel makes for a great addition. It fills a ‘blind spot’ for HKS”, according to Kusters. He adds that not all residual streams of the HKS shredders are currently utilised in full; part of them is burned or dumped. “The pressure to put those streams to use is increasing. ‘Tiel’ has the potential to add a lot of value in that regard.” The same applies to Circore, the brand name of sustainable finishing, dam walls and barrages, which is also part of the acquisition. A remarkable fact is that it repurposes recycled plastics from old cars. Circore’s products are decomposition-free and have an expected technical lifespan of at least 50 years.
The plant in Tiel will become HKS’ tenth branch in the Netherlands. Meanwhile, a win-win situation emerges: both organisations benefit from the acquisition and the approximate number of 45 employees have reason to be excited about the new situation as well. Kusters: “We need all employees for the work and plans ahead. I believe the PST employees have a good sense of HKS’ excitement about the plant. The permits evidently facilitate our ambitions to grow the Tiel operation, for example by expanding processing activities for streams other than those from ELVs. The current permits state an annual ceiling of 150,000 tonnes whereas ‘Tiel’ is currently processing just under 40,000 tonnes. Possibilities abound!”