Sims Limited (SGM) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the Sims site tour of the North American business. We'll have a series of presentations today from the NAM business and from the SAR business. We also have people from the group here today. But I'll let Stephen talk through the agenda and also introduce you the presenters. For now, I would like to address the structure of the day. We have 3 sets of presentations and Q&A will take place only at the end of each set. So I would like to stress, please on ask questions at the end of each individual presentation or doing the presentation. And there is plenty of time for questions and during the breaks as well and the site tour of the SAR business as well. So without further delay, I'll ask Stephen to start the day.

Thank you, everyone. I'll add my welcome. You're going to see a number of presenters today, as Ana said. We are going to allow plenty of time for questions. So I will do an introductory presentation, then there's some Q&A, then John and Michael and then some Q&A, then Rob and Michael, Q&A. Then I think we've got time for some lunch and then we go to SA Recycling after that. And we will have Q&A at the end of each of those sessions, which I think will help it flow quite well and will allow the questions to be really pertinent to what we're talking about at that time. Here's the agenda for the day. It will end up reasonably packed, and I'm really keen to make sure we get out for the site tour of the SA Recycling facility. It's a fabulous facility and really It's going to be worthwhile spending as much time as we can And, I guess, really making a very practical aspect of -- as to what is a series of presentations today. We will stick closely to the agenda, lunch at around 1. After 1, we've got George and Tyler and then heading off to Terminal Island. I know everyone has met a number of the presenters today, and I'll let George and Tyler introduce themselves later in the afternoon. And from the SIM side, we've got John Glyde here today, which you've all met before. We've got Rob Thompson, who you've also met before. We've got Steve Skurnac, who in a couple of weeks will become the interim CFO, so well done on that Steve. So we've got Steve here today. But we've also got Michael Gaylard and Michael Henderson here at as well, and they'll be presenting to. So I know none of you have met, Michael Gaylard or Michael Henderson before. So maybe a little bit of background from them, and they've both written me extraordinarily comprehensive CV. So let me just read them rather than try and remember each one of them. So Michael Gaylard started working in investment management in London straight from university and quickly found an affinity for quantities. Prior to joining Sims in 2019, Michael spent the previous 12 years working with international trading houses, ship owners, financial institution and hedge funds, creating futures and options market for iron ore, steel, fertilizer and both bulk and container shipping. Michael first encountered the recycling industry when working logistics and sales platform for a magnetite concentrate produced in Southern Utah and here's where it gets interesting. During this period, he made contact with George Adams, a deal was structured to use SAR Long Beach dock facility and to this day, the product still makes its way to Asia by SAR Long Beach facility, and that's what we will be looking at today. Michael lives here in Southern California with his partner and two sons. So Michael is on our commercial side, and you'll hear a lot more from him. And I think you'll appreciate the depth of experience that he brings to our organization. Michael Henderson is the COO for North America. Another person that a number of you -- or I think everyone has not met yet. Michael also has a very interesting CV and so also read it and so do it some justice that it deserves. So Michael started working in the metal recycling space in the early 2000s, while still in high school. After graduating college with the BA in Political Science in 2004, he began his career with middle management Northeast, which Sims acquired in 2008. In his career, both locations, Michael has worked in operations, commercial, business development and global strategy. His most recent appointment, as I said, is the NAM COO came after 2 years as the Vice President of Operations for Sims United States East Coast platform. Mike actually lives in New Jersey. He's not a California-based with his partner and 3 sons. And Mike did make the observation when he sent the script this as easily be in a victory, if you read it in a certain way as well. So I think it's really important that we demonstrate to you today the depth. You've all met John, you've met Rob over the period. But there's extremely good depth, right, throughout the Sims organization, and we thought it was very, very important to get both Michaels involved in the presentation today. So, an update on the market conditions. Now obviously, clearly, we put out an announcement earlier this week on the first quarter. And I really -- I want to talk about the market conditions as we see them, which has led to that. So when we go -- when we spoke at the half year -- at the full year results, sorry, in August, it was very much in the background of steel demand. There was quite a subdued steel demand position. But I think one of the most interesting things was that the scrap price as we see didn't appear to be sufficient to stimulate a strong scrap flow. We found that a rather unusual condition at that time, when we talked to you about this. And we've got a, let's call it, $3.50 to $3.90, the scrap price has been sort of moving around in that range for a period of time. Now that would normally be easily a sufficient price to create quite a liquid and quite a robust scrap market. And right now, it isn't and back and then it wasn't and that condition hasn't changed. There is still a -- the flow of scrap is still subdued. I would describe it as illiquid. And that is a rather unusual condition given the scrap price we've got. And I'll talk a little bit more about that and the update on the market conditions. So the competition for scrap was strong, though. So we had a limited supply of scrap coming out. The competition for it was strong. You still had a number of participants in the market, the same number of participants, I guess, fighting over a smaller quantity of scrap being released from the market, and we had a margin squeeze. We had lower volumes at lower margins and a margin squeeze as a result of that. That was generally true across the regions, though it was much more pronounced in certain regions than others. So for example, it's probably fair to say, less pronounced in as far as Sims is concerned in the Australian region. Still, no doubt, scrap flows are down and margins were being squeezed, but less pronounced in the Australian region, And it was, I guess, slightly more pronounced in the regions in the U.S. where we operated versus the regions where U.S.A. operated. There were some subtle changes between regions, and it was pretty pronounced in the U.K. region as well. The U.K. region volumes were particularly low. So that's what we were talking about in August. We felt the need that we had to put an update out earlier this week on Monday. Those conditions are persisting. We have not had an improvement in those conditions. I think there's a couple of indicators on that. The PMIs very low at the moment. A little bit inconsistent in some of the data, but definitely in the contraction mode. So we've got that going on. The other thing, which is really quite interesting in these market conditions is that is durable goods. So durable goods demand is down. And durable goods generates scrap. We've got some anecdotal rationale for that. but it's -- the data says that durable goods are down. We've got a reason why we think that is happening by looking at other data. And that has to do with consumer spending. During the pandemic, people were locked down. They weren't going on holidays, they weren't going to restaurants. They couldn't do the normal things that they did as part of their life. And they -- if you look at the data, there was a large uptick in the purchase of durable goods. fridges, washing machines, whatever you consume in your house, which is metal intensive, there was a large -- a very large uptick in the purchase of that. And that is post the pandemic has just completely fallen away. So we -- there's less scrap coming out as a result of that. There was more scrap at that time. We had higher prices. And if you look at the FY '22 year, I think that's reflected in that. Right now, we're seeing not much in the way of scrap flowing out of that. You combine that with what we've previously talked around -- talked about around automobiles. There is no doubt that during the pandemic, we used our cars less. We -- frankly, we were crushing them less. We were wearing them out less. And there's still -- we believe there's still a rump of cars still need to come through the system at some point in the post-pandemic period. So those market conditions haven't improved and that's continued on. The other comment we'll make is the newest domestic market, which we described previously resilient, is showing some sign of weakness. Now a lot of this is actually largely around sentiment. And that sentiment right now is being driven by the United Auto Workers potential strike, and that has absolutely impacted the sentiment of the market. So tomorrow is the day we apparently we find out are they going on strike, have they done a deal or have they agreed to extend why they continue to negotiate? That is the 3 large auto manufacturers are all under the threat of that and that has caused quite a negative sentiment in the demand for steel. People are not willing to hold stocks. They are -- they're purchasing less steel, less demand for scrap. So that is right now not a, I guess, a factorial, but It's much more of a sentiment-driven issue that's happening in the U.S. marketplace. Let's see if it gets resolved over the next days, weeks or months. As a result of that, we believe that our Q1 '24 is going to be approximately breakeven subject to the normal caveats that we put on that. We will have ships that are loading at the end of September. Do they get loaded at the end of September or the beginning of October? It's just a timing issue, but that could flip it from 1 month into other or could bring forward from -- if we've assumed something that's going to load into October and -- beginning of October, loads at the end of September that will bring it forward. I'd also make the point that September hasn't finished. We have largely completed our sales program for September, but we still have to buy some of that scrap over the coming weeks. So the final price that we buy that scrap at will determine the final margin that we make on that cargo. Putting all that together, though, we believe on balance that we will have a breakeven September quarter. None of this changes our medium- to long-term outlook. And pretty much our medium-term outlook is where we're focusing. And there's still [indiscernible] of infrastructure spending going on in the U.S. We've still got the Inflation Reduction Act, which is absolutely driving demand for steel. That is a medium-term trend moving through to a long-term trend. That will be around for a considerable period of time. Global decarbonization is not a fad. It's not a 5-minute wonder. Global decarbonization of the steel making industry will continue for decades to come. It drives EAF. It drives the EAF capacity. You're seeing here in the United States, Rob and John will both cover off that in considerable detail what that's doing to the EAF construction, what that's doing to the demand for scrap? That's not a trend that's going away. That's built into the global economy for decades to come. Associate of that is the electrification of products. Everything that's going to be electrified over the coming period is steel intensive, is copper intensive, is aluminum intensive. None of that is going away. Electric cars, wind farms, solar, they are all intensive from a steel point of view, The best way to produce those with low carbon footprint is recycling metal. None of that has gone away. We just have some short-term challenges over the coming weeks and months. I want to briefly touch again on our sustainability strategy because, again, this hasn't changed. It's at the core of what Sims is. Sustainability is our business. We look at our sustainability in 3 areas: operate responsibly, close the loop and be a partner for change. Operate responsibly is something we will always do, whether it be from an environmental perspective, from a safety perspective, diversity and inclusion. Those are, I guess, the foundations of our operating responsibly. We believe it's the way you have to do business, and that's the core of what we do. Closing the loop is the closing the loop and partner for changes where our sustainability strategy connects with our customers. We are helping our customers close the loop. John will talk a lot or a fair amount in his presentation and the type of products we are looking at producing for our customers, which will help them close the loop. The work we're doing on ASR and Sims Resource Renewal turning that into ultimately a plastic, which will close the loop on the car manufacturers. That is a key part of what we're doing around our sustainability strategy. And the last one is the partners for change. The type of investments that we're putting in place, the type of products that we're looking at producing for our customers, the type of waste that we are helping them close the loop, it cannot be transactional. It cannot be we're going to do this deal for you today, and we might not be here for tomorrow. They are long-term partnerships that we need to create. We have commenced down that journey. And in fact, a number of areas we've commenced in a considerable fashion. These 3 pillars are all driving the value for shareholders on the other side, whether it be revenue generation. And I would say, just as importantly, it's the quality of the revenue generation that we're looking at. Long-term partnerships with trusted customers where we are the trusted supplier that produces higher quality revenue less volatility in that area. The competitive advantage and innovation, I think they speak for themselves. We are -- I believe in the long run, we are moving away from just a pure commodity to more nuanced products that meet specific customers' needs for the type of product that they're producing for that end customer. So knowing what that end customer needs, therefore, knowing what the steelmakers, the aluminum producers, the copper producers, what they need to produce for their customers, a key part to our business. Looking and I guess focusing in, particularly on the Sims strategy. At our core is Sims Metal and Metal Recycling. I see that staying as our core for the foreseeable future. We have adjacencies to that, which I believe are important adjacencies, Sims Resource Renewal and Sims Lifecycle Services. I believe we spoke a lot about Sims Resources Renewal at the Rocklea presentation, and I think I made it abundantly clear there that, that journey is not going to be a Sims alone journey. We are -- there is going to be a joint venture journey where we will have other partners within the joint venture separately structured, but with Sims as a core part of that joint venture providing the ASR in a reliable guaranteed fashion the way that is going to need, that will stay there. Sims Lifecycle Services We're seeing -- we'll be talking to Ingrid and her team tomorrow. So I won't talk too much more about that. We will have a lot more information on Sims Lifecycle Services tomorrow. We've made the decision to divest a number of assets. And we've talked about that over the last year or so. Sims Municipal Recycling. We divested a portion of that, and we will have that fully divested in the coming months. Those negotiations continue. LMS Energy. I think it's all known to the market that we've decided that, that is not core to our business, and we are in the middle of the -- of finalizing that sales process at the moment. And along with LMS group, Sims Energy, which is the operation that we've got here in the U.S. in Florida. So that's the way we see the business moving forward. If you look at the actual strategies amongst each of those, from a ferrous point of view in Sims Metal, I think we've talked about it enough, so I move on to the second point about growing and capitalizing on tailwinds from demand. I spoke -- I think I've spoken enough about that in the previous slide, so I won't dwell on that bullet point. But I will a little bit on the second one, which is leverage our core operating platforms. And we have very good operating platforms to increase unprocessed infeed and diversified channels to market. Let's unpack that into its 2 component parts. We need to increase the amount of unprocessed material that we're receiving. That -- some of that can be a source where we go straight to [indiscernible] type of trend. Some of it will be from industrials. Others will be from smaller dealers that have maybe collected up a number of -- have collected up a volume of scrap from peddlers. But the key thing with that we do well is adding value to that unprocessed material, whether that be through shredding it, through shearing it, through torching it, cutting it up whatever we do. That is where we add value to get it to a point where it is the type of material that our customers need, core part of our strategy, and we're planning on growing that considerably. That leads to that the third bullet point about leading the market on new product development. The reality is that as we decarbonize and scrap being the only economic way of decarbonizing at the moment, customers are demanding different types of scrap, different qualities, different nonchemicals, normal chemical componentry. They want less tramp elements and they need that provided consistently and they need surety of supply. So John will talk considerably about the type of things we're looking at there and around making sure that we are satisfying and meeting those customers' needs. Last point on the increase in the optionality between the U.S. and domestic markets. As we spoke about at the full year result -- we did get caught out where the domestic market and the export market separated in the U.S., and we were competing for some very high-price scrap selling it into the export market at some pretty slim margins. We absolutely have the ability to send more of our product domestically. It's not capital intensive. It's more about making sure that we have the relationships with the people to provide regular the regular product on time in spec to the markets that are needed. So we will keep our export optionality, no doubt about that. We have fantastic port facilities. SAR has fantastic port facilities. You'll see it long at Terminal Island today. So it's not about removing our export optionality. It's about making sure that it's a genuine optionality by having a domestic focus and ability and consistency to our business as well. We've already commenced that I see that is something that we're well on the way to achieving. Last thing on nonferrous. We've got 2 very distinct platforms at the moment in aluminum and copper. We've got Alumisource on the aluminum side, which we're growing and Northeast Metal traders on the copper side, a very copper nonferous-focused business. Growing those is a core part of our nonferrous strategy. And lastly, getting more metal out of the fines waste. It is becoming more possible, more technologically achievable and the price is driving the signals to at least get as much metal out of the fines waste as we possibly can, nonferrous metal. We will speak a lot tomorrow about Sims Lifecycle Services with Ingrid. So I won't dwell on that. And we've already given a very fulsome update on Sims Resource Renewal at Rocklea. Just on this picture for a second. And to me, this picture tells -- this collage tells an interesting story. The top left-hand side, black and white metal scrap. Bottom right-hand side, it's in color, but it's still metal scrap. Our core business hasn't actually changed. This is scrap that's throwing away and needs to be dealt with, this is scrap that's thrown away. And rather than go to a landfill needs to be dealt with. So it's really interesting. Over the last 100 years out, the core of what we do hasn't changed how we do it has a couple of interesting comments for me on this. First is health and safety comment and the second would be an environmental comment. So it's how we go about doing it and the technology we use. Let's look at the second picture from the left. I'm not sure a band around the head provides any protection as opposed to a hard hat. So we've made huge strides in health and safety. We've made huge strides in environmental protection. You look at the facility on the top right-hand side there. And we've also made huge strides in technology. It is much less a people-intensive business, and it's becoming more and more a technology-intensive business as to how we upgrade and process our material. Let's have a look at it from our customers perspective and our customers' customers perspective. The world is committed to increasing -- well, the world has committed basically increasing scrap as -- to meet societal expectations. As I said previously, the only realistic way right now, practice way of decarbonizing is through scrap metal. And if you look at our customers and our customers' customers like what are they doing? I'm not going to go through these individually, but if you look, what are our customers doing in terms of helping meeting their commitments to reducing carbon and then what our customers' customers doing, who they sell their product to, what are they doing in terms of reducing their carbon footprint. I think it's pretty clear that the entire world is pulling in this direction. This is not us pushing scrap. This is about the world pulling scrap. Little bit of, I guess, evidence for that. This chart here shows a couple of very interesting things which I'll highlight. The first, which is very clear, is just the demand for scrap is expected to double by 2040, and it's on a very -- it's on that trajectory now. And that's clearly driven by EAF share of steel production. If you look at the blue line on the top, that's an estimate of the EAF share of steel production going from a little bit above 25% in 2020 through to around 40%, but over 40% by 2040. I think that's a really clear and obvious thing and undeniable in many, many ways. But in some ways, just as importantly is the green line at the bottom, and that is what is the share of scrap that is going into the blast oxygen furnaces. And right down here, we're around, I don't know, let's call it, globally 2.5%. That varies hugely across the world. BlueScope is as high as, John, I think, 28%? Approaching 30%, but others are obviously much, much lower. That's predicted to rise from 2.5% in 2020, let's call it up to 7% or 8% by 2040. Why that is almost as important as the EAF production, which John will go through, is that is a huge amount of scrap because it's a, let's call it, a modest percentage increase on an extraordinarily large number. and John will take us through that. So demand for scrap, I think, is undeniable. I just want to set the background here, we will go into this in much more detail during the day, is I want to present the footprint. If you look at what is Sims exposed to in the United States from both our own perspective and the SA Recycling our 50% joint venture partner. You can see us in the blue in the dark blue is Baltimore Scrap that is in the process of finalizing now. Just waiting on those final regulatory approvals. And in the orange, you're seeing SA Recycling. That picture to me tells a very nice story about where we are, where SA Recycling is, how we've got diversification across North America and how our footprint is actually very complementary to do between the 2 businesses. Talking about that complementary footprint, you'll be hearing from both Tyler and George after lunch, and we'll be clearly going and seeing their facilities today. Their complementary footprint is more than just the physical assets, which is a very important part of it. But I believe the 2 organizations work very well together and today is a demonstration of that. Very pleased to have Tyler is here now. George will be here shortly. Mark Sweetman here as well, the CFO from SA Recycling. Really pleased to have them to join with us today. I mean we share everything from EHS, we are absolutely best practice across the 2 businesses are shared. Technology, R&D innovation, we both have different types of technology. We share that technology we share our trials and tribulations, what's working well, what's not working well. Huge importance and as technology becomes more and more important in the way that we process scrap. Our go-to sales strategy is coordinated. We sell SA Recyclings ferrous scrap globally. We work together in our sales strategy generally. We -- between the 2 of us, we produce a lot of scrap. It makes much more sense to coordinate it together. Our growth strategy is coordinated. When you saw the map on the previous page, that position in the market didn't come by accident. It's a coordinated growth strategy between the 2 businesses. our sales diversity. Right now, roughly, Sims is 30% domestic, 70% export, give or take a bit. SA Recycling is roughly the opposite, 70% domestic, 30% export. There is a diversity there where, in varying mark-to-market positions, that's going to work well for the other not so well for the other part. That diversity works well. And location and take source diversity. We are not reliant across the 2 businesses on 1 or a few regions. We have source and take diversity and location diversity across North America. Much more on that this afternoon, but I just thought it was really important to set that -- I guess, that overall picture right now. So we'll have much more from John and Rob, specifically on Sims, much more from George and Tyler. Welcome, George, and specifically on SA Recycling this afternoon. So as promised, we would leave plenty of time for Q&A. So happy to take Q&A now. Any of the Sims people feel free to answer as well, and then we'll move on to John's presentation. Simon?

Simon Thackray from Jefferies [indiscernible] customers, you've got the biggies like Nucor, steel dynamics [indiscernible], all with very significant recycling operations. Now you've got Cleveland-Cliffs moving into scrap. BlueScope, albeit small it's moved into scrap. Can you just explain the difference between then and now for us? And in terms of the capital allocation to ongoing expansion why you don't end up in the same competitive shitty position that you were in, in 2012 and 2013?

Sure. So I think there's 2 or 3 things amongst that. The first thing I would say is that our strategy was export optionality, not necessarily just export, but we wanted to have the option to go export. I think where we we became clear that we've got that slightly wrong, is that the export optionality was just export. We didn't have instantly the ability to go domestically. So that [indiscernible] I think that's a valid point, but it was always about export. It was always about export optionality. What has changed between now and then? I think a number of things. First of all, Section 232, which effectively -- it's a barrier to entry that the U.S. domestic steel market has that market to itself and imports of steel have fallen substantially in the domestic market is the only steel market. You then add on top of that the stimulus that's happened with the inflation Reduction Act. And if that's not the only actor and a number of other acts on the various names that have absolutely stimulated steel-intensive growth in North America. As a result of that, the demand -- I'll add one more thing, the intensive building of EAFs over that period of time. So the U.S., I'll get this number slightly wrong. The U.S. is around 80% EAF production now. We've got some chance to show what it was 20, 30 years ago. So you've got a circumstance where it is just very clear in our view that for the next decade, I know once you go over long 2 or 3 years, who knows -- it's who knows what the answer is. The demand for scrap in the U.S. is strong, it's going to remain, and we need to have genuine export optionality being that we actually can sell domestically as well.

Is it fair to say that Nucor, Cliffs, Steel they all have exactly the same view on steel. They've been overcapacity with David Joseph an omni source for years. They'll be absorbing that capacity over time. A lot of the expansions you guys referred to are by these same companies that are integrated back to scrap. So I'm trying to understand where the competitive advantage you're going to create domestically will be against these major players who own the mills and who used to absolutely ram you guys on margins.

Yes. So I don't -- I guess I don't message -- I don't entirely agree with it. We're going to compete against them. I think we are going to be an important part of their supply chain. And the reason I say that is that the -- if you look at the demand for scrap in the U.S., you look at the supply that's come out of Canada for a while, that's now going to stay in Canada because they are building EAFs there flat out. There is a need there is a huge need for scrap in the U.S. And we, by definition, will be an important part of Nucor's [SDI] which the other companies you mentioned, a huge important part of their supply chain. It's also fair to say that we can use [indiscernible].

We can use our dock infrastructure to feed that network of domestic mill demand. Our East Coast assets have the ability to load barges that can be directed into the Southeast. They can be directed into the Gulf, where some of this demand is coming from. I mean the most efficient way you move scrap is either on barge or in bulk. So we can certainly feed that demand. And there is some areas in the country that are going to have extremely short positions around scrap.

Where are they specifically?

The Gulf. Rob can...

Yes. I think what I would add as well is the misnomer about David Joseph. They don't have scrap processing facilities everywhere. They, in fact, don't have any at their steel mills. They largely were a brokerage or a trading arm, and they're a raw material buyer. So our relationships with them through SA through Sims as well, they think about raw materials in terms of captive percentages. They never want to be 100%, but they'll be in a low 20s to maybe even a mid-30s percent of the raw materials. And Nucor's attack, they want to have ore-based metals. So they've invested in HBI and DRI. They have some scrap assets. SDI, to your point, they've got scrap in regions where they don't have steel mills. They don't necessarily have a good balance. So that's where our relationship and our proximity to their new demand comes into play, and that's where we see that relationship and our ability to pivot. But as Stephen says, be a very reliable supply chain partner as well.

Stephen, you mentioned in your guidance that you had sold your scrap cargoes for September, but you still needed to buy a whole bunch of unprocessed scrap of sorts. Does that mean -- and it sounds like you've gone from being long scrap of 3, 4, 5 years ago to now being short scrap. Is that a change in strategy as well?

No, So I'm gonna start with generally speaking, and we can only speak in generality because it changes any point. Generally speaking, we sell before we buy. So we tend to be -- and this has probably been the case for the last at least John, 5 to 17 years -- longer, generally speaking, we are -- we sell before we buy. And typically, let's call it, in the 4- to 6-week range and then we build the cargo to meet that sale. So that hasn't changed. We are in -- right now, we would be in the typically normal position that we are. We've sold, we finished selling September, and we're now buying the scrap to meet those cargoes.

You have sold at higher prices.

Well, at times, it does help us. And at times, it's neutral and at times, it doesn't help us. So I guess what I'm saying is that the caveat -- not the caveat, the normal thing I wanted to put around the first quarter is we haven't yet bought the scrap that we've sold. If the scrap market weakens over that period, you would expect our margin to widen out a bit to what we were thinking if the scrap market were to rise, it would narrow up to what we were thinking. It's not a huge. We don't -- we're not in there to take positions, Simon. I want to make that really, really clear. We have just traditionally found it easier to be selling 4 to 6 weeks out before we buy.

Depending on our relationship with the domestic consumers in those regions.

Rohan Gallagher, Jarden. I'm new, so I'm sort of learning on this one. But I see a very successful SA recycling that earns multiples more than the U.S. businesses of Sims. Has there been any discussions, thoughts, considerations around bringing those 2 businesses together and -- could you articulate to the layman i.e. me, what's the differences are between those 2?

Sure. The first question is a little difficult to answer. Has there been serious discussions around bringing those business together? Not in recent times. What are the major differences in my view and George and Tyler will elaborate this entirely from SA Recycling's point of view, when they give their presentation. I guess in summary, the major differences between -- from Sims' perspective, and It'll be really interested to hear later this afternoon from George and Tyler, the major difference is from a physical market perspective is SA Recycling buys much more at source/unprocessed material and shreds a lot more than we do as a result of that. and has wider margins and better margins as a result, both in the absolute margin on the ferrous side. So if you're buying more at source and when we come to SA Recycling, you'll see substantial more facilities, many more feed yards than we've got. When you're buying more at source, you have a wider margin because you're cutting out the middleman. And secondly, the more you shred, the more nonferrous material you are producing. The more zorba you're producing and making margins on that side. So those -- I mean, that's a rather simplistic, but I think those would be 2 of the major differences. I think particularly in the last 6 months of 2023 financial year 2023. We also, in addition, we suffered from that when that export and domestic market separated we were exporting against the domestic U.S. price that was significantly higher and our margins contracted as a result of that. Okay. There will be plenty more time for questions. I'll hand over to John now for the next session.

Hi. Good afternoon. I think we clocked over into the afternoon. So welcome. I'm happy to be here with you today to give you a brief overview of our North American platform. We're going to have a closer look at the footprint of our operations and then a slide on safety. Go to the next one. So you can see here, we have over 1,700 of the best employees in the metal recycling industry, although I'm sure George will include the SAR employees in there as well. So between the 2, we have certainly a lot of the best employees in the industry, working across 59 facilities, which includes 12 shredders operating in 15 states. You can see here -- see if I can get that working, with our sales volume and our sales revenue, fiscal '17 to fiscal '23, we've demonstrated our ability to successfully grow that on a compounded annual basis, focusing our strategies, our growth strategies and investments in capacity, logistics and product differentiation. The next slide, we have here just a closer look at our footprint. And this was a previous slide that Stephen had up briefly that had SAR facilities in there as well. And as you can see here, our footprint is heavily focused on the U.S. East Coast, particularly in the Northeast of the United States. This is an area that's dominated by many densely populated -- population centers with a lot of historical volume of obsolete grades, HMS, [indiscernible] those types of scrap grades, but also a tremendous amount of post-consumer scrap. Automobiles, appliances, things that we like to put through our shredders. These areas of the country here has traditionally and historically been a net exporter of scrap. And then there's a reason why we have 11 bulk loading docks. A lot of them are really concentrated in this area right here. Despite that, nearly all of our major sites do have the logistical flexibility to shift to the domestic market as well depending on market conditions, either through the rail serve sites that we have or the 15 barge serve sites. Now the other operations that we have and the other platforms that we have in the United States, they follow a similar demographic trend. We're looking for locations with high population density and/or have been traditional or current high-intense steel-consuming areas of the country. Our recent acquisitions since 2020, which was our ARG acquisition here in the Baltimore in Mid-Atlantic area, our Alumisource acquisition in Western Pennsylvania and Kentucky; and our Northeast Metals acquisition are all part of the strategy to grow our sales volume and our scrap volume by diversifying our product portfolio and focusing more on shipping scrap to the domestic market in the case of ARG and in the case of Alumisource and Northeast Metal traders by focusing on serving the increasingly important nonferrous sector. The recent acquisition announcement of Baltimore Scrap, which again is in that Mid-Atlantic area, and you can see this kind of going up and down the western flank of our East Coast operations continues this strategy. adding 4 shredders and 13 other facilities, providing us with additional shredding capacity, scrap at source and a turnkey logistical network to serve all markets. The last slide I'm going to present on is safety. So this is a chart of our total recordable injury rate and numbers from 2017 going to 2023. When we started our safety journey, we had 2 goals in mind. One, we wanted to change the mindset in our workplace that where we accepted injuries as part of the job to one that where we actually all believe that all of our employees could go home safely. And two, we wanted to improve all of our employees' working conditions at all of our facilities. To do this, -- we invested in systems and safe work procedures, SOPs and audits, all of which led to meaningful improvements in our injury rates. And while the progress was substantial, this chart here shows -- starts in '17, but if we were to go back to 2008 or 2010, you would have seen numbers that would have been double that. Our injury rates over 4 or 5. So the progress we certainly was meaningful, but it started to plateau. And you can see here, we dropped down as low as 1.5 and kind of stayed at that level. And we started to think about what we could do differently. So we changed our approach in 2019 and 2020. And we started to focus more on creating an environment where we valued psychological safety. And the idea there was we wanted to get our production employees. And really important is our supervisors to trust us that they could really be honest with us about the real risks that existed on the job. When we did that, we allowed us to focus our energy on high-value initiatives like critical control verifications and pedestrian to vehicle interactions, which -- those are the areas that keep us awake at night. Those are the areas that are going to prevent that are going to cause serious, serious injuries. This shift towards psychological safety has shown us that we cannot fix the secret, therefore, the trust and openness, that's really important and that we can learn or we can blame but we cannot do both. These are easy things to say, easy things to write down, difficult things to put in practice. But I think the evidence is there, and the results are showing very positive. You can see from '19 to '20, we dropped our recordable rate below 1. We define world-class as 1 or below. Kicked up a little bit in 2021. And then the last 2 years, we've driven them down to the lowest levels ever. We don't rest on our laurels, though. We know that in safety, we're only as good as the work that we put in today, and we're not going to slow that down. We're not going to focus on the lagging indicators that we show here. We're going to focus on the work that we're putting in every day. So thank you.

As Michael pointed out, good afternoon, everyone. Let's just make sure. So today, between Rob, myself and Michael Gaylard, we intend to cover what we call our 5 pillars around our North American metals growth strategy. I will cover the first 3, best-in-class assets, quality differentiation and large markets. Michael and Rob will pick up the last 2 being sourcing scrap -- sorry, procuring scrap at source, mostly unprocessed and obviously, sales optionality or channels to market. that will be the topics over the next half hour period. I get asked this question -- I've been asked this question, I don't know, 3 or 4 times when I've been doing this presentation, what is our shredder capacity? And I've had a guess at it. Well, I actually calculated it. Our upshore capacity, sustainable capacity utilization in North America or across our entire shores sits at 62%. And why is that important? Because it certainly gives us headroom for growth. And Rob is going to talk a little later about how we can grow our volumes. And as we've talked about, we want to grow our -- the levels of unprocessed volumes. And I guess that will ever end up more feedstock going into our shredder. So it's important to have that headroom. And I'd point out, it doesn't come at any further capital expense. That's headroom that exists today. The other bit that I'd comment on is, and Stephen mentioned it, we have a -- the drive to consume more scrap across all forms of steelmaking means that we are going to need to improve our quality. The only way we can improve our quality of our shredders is to shred to a higher density. Shredding to a higher density largely means that you reduce the throughput through your shredder. So we need that headroom to accommodate this need around increased density. And I think that's important, too. And again, that can come without further capital requirements on the back end of our shredders. I thought I'd pick out a couple of, what I would call, our best-class assets across North America Metals, and I know you're going to visit Terminal Island this afternoon, the SAR business. George and Tyler are very, very proud of that facility. We are extremely proud of this facility. We would describe it best-in-class. It operates what we call a mega shredder. This is a 9,000 horsepower unit. It's at the top end of shredders, it would be fair to say. And with that, we have a very sophisticated downstream on the back end to not only extract metals from the waste stream. Stephen mentioned the opportunity around fines. That's something that I'd have to say that we are working on. There is certainly opportunity in our fines. And quite frankly, -- and I think George would confess to this that we both have further opportunities around getting particularly copper out of some of our waste streams, and we're collectively looking at options around that. In addition to that, we have zorba separation plants and metal polishing and a whole range of other things to maximize and create value at the back end in what we sell those products at. I think the really critical thing about our Claremont facility is its optionality. We have barge docks, we have rail infrastructure. We obviously have trucking. We also have a deep sea dock. This obviously provides opportunities around inbound scrap. The site services, obviously, the New York -- New Jersey area and providing our suppliers with flexibility about how they get the scrap to us or how we collect it is extremely important. As we mentioned, a very efficient way to move scrap is on water and particularly on barges, and we do use a lot of barges to transport scrap into our facility at Claremont. On the flip side of that, when we're looking for outbound shipments to our customers, again, providing that flexibility, whether it be on truck, on rail, on barge or in bulk shipment. And as I mentioned before, we can certainly use our dock facilities to direct product back into domestic markets via barge or potentially other forms, bigger ships. The other side that I picked as a best-in-class asset is Monessen. and there's a couple of unique things about Monessen. Firstly, Monessen is located about 30 miles south of Pittsburgh. But until we acquired the Sims Alumisource business, I didn't realize how central Pittsburgh is to the greater U.S. Monessen sits in a region, if you draw a 600-mile radius around Monessen, 50% of the U.S. population sits in that 600-mile radius. And I think that's really important when we think about nonferrous scrap, non-ferrous scrap will travel. The value of non-ferrous scrap is such that it will cover the logistics and having a plant in an area that covers 50% of the population within 600 miles is extremely important to us. Some of the things about the facility is 25 acres. It has an enormous amount of undercover areas, 7 acres of undercover, which, quite frankly, provides us with great growth opportunities down the track. Potentially looking at other forms of processing on site, whether it be other aluminum products or quite frankly, other red metal products, cable granulation, fines extraction, consolidating some of our waste streams. All our shredders also -- sorry, our Midwest and East Coast shredders also sit within the 600-mile radius. Shredder on the West Coast, obviously, doesn't. So the opportunity to consolidate some of our streams from our shredders and direct a core plant like this is a great opportunity for us. The site currently is 1 or 2 sites that we acquired as part of Alumisource. What we do on site, as we shred aluminum, we have a very sophisticated downstream that will then take that aluminum and sort it into various streams of alloys, whether it be 3x, 6x, 5x. We then polish that product. and then we direct it back into primary aluminum production. So some of our customers are people like Novelis, Hydro, to name a couple. Again, directing this product back into primary metal production. As Stephen mentioned, everyone is talking about increasing life-cycle content and reducing the reliance on primary production that's centered around ores. In the case of aluminum, bauxite and stuff like that. Moving to our second pillar product quality differentiation. I think it's widely acknowledged that steel producers globally contribute about 7% of the world's emissions. And every steelmaker across the world is, quite frankly, being forced to consider efforts around emissions reductions. It's also fair to say that a part of that strategy is certainly scrap. And as Stephen mentioned, the use of recycled metal in steelmaking and in nonferrous application is paramount to reducing emissions. If you look at your traditional EAF, whether it be a flat product or a long product producer, big consumers of scrap already. Obviously, flat product producers have much tighter requirements around chemistry. And I'll talk about it a little more to get our scrap, particularly around obsolete grades to a level where they can consume more of it in flat product production is certainly where we see the opportunity. Given that prime scrap availability is certainly limited, it is very heavily contested. And the opportunity to do something with our obsolete grades and upgrade them to direct them into what I would call, higher-value products such as flat products is certainly an opportunity. So you get your traditional EAFs that are all looking for scrap. On the left-hand side, you've got your typical integrated steel maker, which is a combination of a blast furnace and a BOF. As Stephen mentioned, the consumption of scrap in a BOF varies worldwide. I've seen some BOFs with as little as 5% scrap charge, using specifically only go around or home scrap within the plant itself. And as we talked about, you've got consumers like BlueScope fresh in the high 20s and aiming to get into the low 30s. I think we worked out, Rob, that about 1.4 billion tonnes of steel is currently made through integrated steelmaking, a 1% increase in scrap being directed into a BOF represents 14 million extra tonnes of scrap that gets consumed. Just the math around it and the opportunity here is huge. And every one of these integrated steelmakers are under pressure to reduce emissions, Obviously, some will go down the path of eventually transitioning to EAF technology. Others have got their blast furnaces at a life cycle, they are looking to migrate over time because of the inherent investment they've got and quite frankly, some are still considering the technology options that are out there and whether they use hydrogen or other forms of energy to reduce carbon emission. The interesting one is the one on the left, blast furnaces. And this is something that we have been working on the opportunity to actually introduce scrap directly into the blast furnace. Again, they need very clean chemistry because it is typically going into flat product production. But you need to get the scrap into the furnace using the traditional conveyancing means. So however, they charge it with iron ore or coking coal, that's the same means by which you need to get scrap into the furnace, and that comes with some challenges. So for them, it's all about form, density, shape, size and lastly, chemistry. Across the spectrum of steelmaking, every one of them is looking to increase scrap. Every one of them with the exception of long product -- yes, long production, needs higher-quality scrap. And as I said, there is limited quantities of prime scrap. The obvious opportunity exists around upgrading our obsolete grades. So how do we capitalize on that? Demand that's here now and only going to increase. So we've done lots of trials, and we've certainly confirmed that we can do it. It does come with a mix of things. It starts with obviously inbound source control. and eliminating some types of scrap that are problematic downstream. But secondly, as we've talked about before, shredding to a higher density, so that firstly, you can liberate the contaminants, whether they be nonmetallics or forms of nonferrous, typically copper, is absolutely a necessity. The simple reality is if you don't liberate it from the ferrous, you can't extract it and it'll end up going in furnace and you won't achieve the sort of chemistries that the steelmakers looking for. So on the back end of that, once you liberate it, then you need technology to then extract it. And our trial suggests that it will be a mix of off-the-shelf technology, and we've done some pretty clever things around some proprietary technology on our back end. Lastly, when you're introducing scrap into what I would call higher-end steel producers, flat product producers, they want to have absolute confidence that what you're giving them is within specification. So there needs to be a QA process right throughout this whole exercise so that you can pretty much guarantee what the chemistry is going to be. And we're also doing some work around that about how we can guarantee the outputs. Pretty much talked about the benefits to customers. One of the big benefits also of shredding to a higher density, every electric arc furnace, you go and talk to the steelmaker and that's all about tap to tap time. So the higher the density, the more scrap they can fit in that basket and the quicker they can get their tap to tap time. So there's a double benefit for them as long. If you remove nonmetallics, the yields go up. You remove the nonferrous contaminants, the chemistry improves, they can introduce more scrap. So, the product on the left is sub 20 copper parts per million, something that we thought maybe 12 months ago might be achievable. We've confirmed we can do it. We actually have a couple of shredders now that are generating this product in commercial quantities. Rob is actually in recent weeks has actually sold some sizable quantities to a couple of consumers that are desperately looking for a product like this, they want to understand it, they want to know more about it. And they -- the feedback we're getting is the demand for this could be very significant. The product on the right is really interesting. We have done some small quantity pilot trials of actually generating sub 10. And it sub 10, you're pretty much getting to the same sort of chemistry that what you would see from absolute prime scrap, new production scrap. This is something that I think as we talked about, if we're going to introduce scrap into integrated steelmaking to a blast furnace, this is absolutely ideal of the form, the shape, the size, the chemistry, all fits, and it could have absolute widespread appeal. The downside is you've got to shred to an extremely high density that comes with a lot of cost and the price premium has got to be there to support that. Same with both, in fact. At the end of the day, you're investing more energy, you're using more consumables. you're putting more technology on the shredders, not the capital investments are great. But it all comes at cost, and there needs to be a price premium to support that. Just touching on a couple of nonferrous products, and Stephen mentioned Northeast Metals traders. It's very much a copper-focused business, but they do operate at granular. And they do something really clever with the copper granules. They actually have a sampling process involves a mechanical sampler. Each and every box, 1 tonne box of product that comes out of this plant is sampled. They actually cast a pack. They then put that across the spectrometer. And they can actually certify the quality and the specification, the chemistry of each individual box. And that product is going directly back into very high-end copper consumers that are looking to replace the use of copper cathode with that. The product on the right, and we've talked a little bit about Sims Alumisource. The product on the right is 6x polished extrusions. And as we talked about, the opportunity for that, not opportunity, it's really going back into aluminum billet production, going back into the manufacturer of 6063 extrusion or 6061 exists today. And again, the appeal of this is, if you look at it, it's very low impurities, yields fantastic. They can be very confident feeding that into their furnace without explosion risk. Every year you talk about people like Hydro and Novelis, they're all talking about increased recycled content. That's the sort of product that they want to introduce into their furnace. Touching on the third pillar that I will cover, and then I'll hand over to Rob and Michael is large markets, and I think Michael mentioned this. Big cities are big generators of scrap, particularly post-consumer scrap. Car bodies, white goods, appliances, packaging, you name it, people generate scrap. And I think what's important about this particular map is if you have a look at it between ourselves and SAR, we've got a lot of these large markets currently covered, but what I would highlight even further is there's still plenty of opportunities for both our organization to grow our business in other regions. Thank you. Q&A? Michael, did you want to join me?

Can we just talk really quickly about transaction multiples for M&A domestically in the U.S., given there is a growing importance for scrap and notwithstanding, I'm sure George will tell us later about how important the relationships are to get those -- that M&A through? But transaction multiples expanding in response to this growing importance for scrap in terms of feed yards or dealers, et cetera?

That's not been our recent experience. And I take your point it takes 2 willing parties. And that tends to get bound up in cycles, whether you're at the top of the cycle or the bottom of the cycle or where in that sort of multiple period that you're talking about, but it does take a willing participant. And I'm sure SAR, George and Tyler, will comment. It takes 2 to tango. But the other consideration for a lot of businesses is the lack of succession. The business that we're looking at acquiring Baltimore, there's 4 brothers in that business. They are all in their late -- mid- to late '60s, in the '70s, and they have no succession. So some of that is simply the need to do something with their business. They don't have a logical hand on. So that also falls part of that thinking.

Yes. No, that's very helpful. And then just in terms of the processing capabilities for scrap, the whole industry is moving to higher density, lower impurity. I don't know what percentage of the market you're currently servicing in flat versus long? I'd be interested to know whether that is genuinely a growth avenue for NAM or for SAR? But the technologies that we're talking about exist already, as I understand it.

To get to sub-20, yes. But as I said, it will be a mix of some bolt-on OEM technology. But then you still need to do some of the other things, inbound source control, shredder density, and there's some proprietary stuff on the back end. If you really want to certify sub-20, it's quite a complicated process. And quite frankly, we're leading in this process. And if we're talking sub-10, we are really leading in this process.

Yes. Maybe Steve can tell me more about what the -- the integrators are doing with their own scrap those that do process? Appreciating that Nucor isn't processing. Certainly, BlueScope with their acquisition, they're processing. They're running -- looking to be 40% self-sufficient. As you said, John, pushed the scrap charge up.

Rob, did you want to comment on?

Yes. I guess what I can tell you is on the North American front, let's consider that as the USMCA. It's 120 million tonne market. I would say 35 million is long products, roughly. That includes non-vacuum to gas which isn't that high quality. In terms of how we service that market, I think George' and Tyler's business, as John said, about 70%. And we are about 30% collectively, I would say, if -- this is just a number I know off the top of my head from a recent visit. We're approximately on a new core basis 10% to 12% of their raw material infeed at this point in time. So we're already significant in certain regions where we have proximity. And I think that's been the MO for the SA folks, and they're going where the growth is. We've been coastal bound for the moment, but we're looking at expanding and we're looking at modes to get to market as well. So -- and what John's describing here is taking quality to the next level because we do believe we're going to have to take a heterogeneous metallurgical product and obsolete products and try and create a solution for a customer that has a need. So...

John, Alumisource, what does its feedstock look like? Where does it get it from?

Feedstock for Alumisource is typically retail Aluminum, largely positive sheet grades. So things like tank taper, older sheets which traditionally goes into a secondary market. And I think the really unique thing about Alumisource is being able to take that product, separate the alloys, get a chemistry that's acceptable to a consumer, then redirect that product back into a primary market as opposed to a secondary market that would traditionally go into something like what they call an America A380 or ADC12. So it's really unique.

And those alloys that they separate, what are they?

Sorry?

The alloys that they separate from aluminum.

So we will get a 3x product, the 3000 series aluminum, we'll get a 5000 series aluminum and we'll get a 6000 series aluminum. And each of those have very unique application. 3000 series will go back into can manufacturing as an example, UBCs, beverage cans. 5000 series will go back into more structural plate sort of opportunities and sheet. 6000 series will go back into extrusion, which will go into window frames, door frames, things like that. So each has a very unique application. The value to the customer other than the recycled content is you've got those alloying elements that they would -- if they bought primary aluminum, they would then have to add alloying elements to get to the specification they need. The scrap that we're giving them has all that intrinsically in it.

Just -- and maybe George will touch on this later. But in terms of decisions around territories because that Midwest expansion SAR has been pretty significant over the last 15 years. And if I overlay your map on 40 -- Page 40 of the slide back where the demand is, to where your presence is, you seem pretty well covered, acknowledging that not every pin represents the capacity in that market, so I accept that. But where is the growth? Texas looks obvious. The Gulf looks obvious. But how do you decide between SAR and North America as to who goes where? How is that decision made or how is that agreement start?

So I mean, I guess it started off with a base position and agreement on that base position where areas we were in together right from the start. And from then, it's just frankly about working together. We have a strong relationship, and we figure it out. We -- when we go through the governance structure, you'll see the Board structure of SAR is 4 Sims and 4 Adams family, and we work it out. And I think -- I mean, I guess, what you would take from that is the proof of the pudding is in the eating. And -- it's we've ended up with, I think, a very logical separation of the -- very logical structure within North America on the map that you've seen. So it's a bit of historically where it started and just working sensibly together since then.

I think a good example of that is we recently had transferred facility Texas. It quite frankly fitted better with SAR's, George and Tyler's business and what it did with ours. And we actually moved that asset out of our books into George's books for that reason. There was more synergies within footprint that wasn't...

[indiscernible].

Houston, you're right, Lopez. So yes -- thank you, Mark.

So is there [indiscernible] area when you guys are North America, 100% of that and 50% of the JV, who has the casting vote?

I think [indiscernible] casting vote, it's a [indiscernible].

I'm just wondering, is there a differentiation in the capabilities that determines the territory? I mean, is it because it's got a better nonferrous?

I mean all of those are...

[indiscernible].

Here's the SAR perspective, yes.

George So look, there's -- it's a big country. There's a lot of places to go, right? Legally, the way our joint venture is, is Arizona, California is the territory, right? So my family can invest in those or Sims can invest in those? But SA can, right, because that is the joint venture territory you formed it. Outside of that territory, there's no restriction on SA. If SA wanted to go to San Francisco and open up a yard, right, I mean it's not legally prevented from doing that. But the fact of the matter is that Sims is our partner, they're a really good partner. There's a huge country. There's 1 million scrap yards to buy in the South, and there's no reason for us to go into their territory and try to compete against our partner. It just doesn't make sense. But there's no legal restriction from stopping us to do it. And the Baltimore Scrap, the guys at Baltimore Scrap, I know them. They called me. And I referred them to Sims, right, because for me to go to my Board, which is half Sims, but to say, "Hey, well, let's go SA wants to go buy a scrap yard right in your backyard." It doesn't make sense. Now we're competing against each other. And so -- and trust me, there's a lot of scrap yards that buy in that I can buy that don't have to compete against Sims. And I think that's really the way it is, it's not a question of casting a vote because it's a 50-50 vote. But it's just really more a question what's logical. And so for us, there's plenty of places for it to grow where we don't fight our partner.

[indiscernible].

In Oklahoma?

Yes.

There's nothing against us going to Oklahoma. We just really haven't got there. And I really -- we tend to grow by a region, right? We'll go to an area, and we'd like to grow in that region. We'll buy -- we'll establish a beachhead and then we'll grow from that beachhead and buy more yards around there and get more mass. And so no one's really offered me something in Oklahoma and a lot of it comes along, people approach us for -- because they want to sell their business. When we decided to move into the Georgia region, we were approached by the family. And then we go to work on doing something like that. Obviously, something has to be available for sale. Some of it is very strategic for us. We want to go there. And because its in between our territories or something like that, then it really makes a lot of sense or it's competing against us in regions like we really wanted to go to Nashville because it was competing against our other businesses and the same as in Permian. So some stuff is strategic for us. We'll try to move in there because it's affecting our other businesses. But the answer to the earliest question as far as how we go, there's just things that make more sense. And like I said, it's a big country. It doesn't mean in 5, 6 years, we run out a place to buy in the South, and we've got to have a discussion, but it's a long ways. We don't need to worry about it right now.

Sorry, we have to move on to the next presentation. We're behind now.

Yes. As John explained earlier, he and I and Michael Gaylard will join me shortly after the first pillar. I'll talk to you a little bit about the unprocessed side of things, why we see that as a necessary step in kind of the journey and our strategy, adding value and better utilization of our already invested assets. And then we'll talk a little bit about the channels to market, that optionality, the pivot potentially, not an abandonment, but a pivot to better markets. As Simon mentioned earlier, when do we make the decision or how do we make that decision to have a fixed-price backlog versus more of a spot price marketplace here in the United States and in Canada. So current situation, I think suffice it to say, we've done the analysis. We've done this globally. We have to continue to do this on our existing situation that we have in terms of our asset utilization. That's incumbent upon management to continually to do this and look at what our current position is versus competitors, what value proposition we might have versus somebody else in that marketplace. And it's come to light that we have an imbalance, if you will, of how we buy scrap in certain regions. And that chart on the right is meant to be vague. That is our -- sort of our look at our global shredding situation on how many feeder yards or captive scrap just as we talk about having a certain percentage of raw material and a balance that they would have going forward into their process. We want to have a certain percentage of guaranteed secured material to go into our processing equipment as well. So looking at the current situation and then improving upon that, and I'll get into how we're going to do that, obviously, a little bit more. At the same time, this isn't a market share war. This is solidifying the relationships we have in those geographic presences, those JV partners that are informal, those people that we have relationships with, we're going to allow them to continue to be great valuable suppliers. But we're going to go to regions and pockets inside of a market where perhaps somebody is pulling material away from us, we need to have that material to fill John's capacity, Michael's capacity with our shredders. So a rebalancing through acquisitions potentially. These are going to be smaller, very regional acquisitions around our equipment, whether it's granulators, shears or shredders, greenfield potentially, a little tougher. You not only have to get the permits, as we've discussed with some of you earlier, but you got to go and fight for that market share. You have to -- it's a long tenuous journey where there is not going to be a lot of return for a little while. So there's a combination of a buy, a potential organic growth as well on top of this as well where we just need to do things a little bit more difficult, but roll up your sleeves and try a little harder. At the end of the day, asset utilization of our shredders or MRPs and shears and profitability as well. A little bit more reliable balance at our locations. So there is a standardized process that we've rolled out in 2024 -- FY 2024. It is very holistic. It isn't just about the utilization or run process. But it's a framework, if you will, that we will push through the organization to look at our regional, our country, our national and then regional differences, how are we going to go to market with our sales but also at our buy side as well. Develop those regional road maps with sourcing plans, optimization plans, collaboration with operational excellence, KPIs and goals, push through monthly targets and tie to annual budgets. At the end of the day, it prioritizes our resources, our talents and our CapEx and at the same time, optimizing asset utilization with unprocessed material. The name of the game in the unprocessed material is to take, again, going into the metallurgy side to take a heterogeneous product and upgrade it to a usable solution for an end user or consumer, whether it's in the aluminum space, the copper space or the ferrous steelmaking side. At the end of the day, improving customer service and profitability. So the bottom chart is one of our regions, how we buy scrap today. Obviously, there'll be goals by region on how we want to move the needle for those regions depending on the opportunity there. An example here for you is a recent JV that we did in West Coast here, where we partnered with the auto dismantler planted auto. We acquired 8 sites where we actually buy car bodies -- end-of-life car bodies that we put in our rack, depollute, pull off some valuable products that we wouldn't recover in our recovery systems such as catalytic converters. The idea here -- and you can see some of the locations in red. The idea here is that we guarantee the reliability of the source of material going into our shredder giving us a base load, but it also guarantees sort of that we maximize the yield of product of FE, ferrous, and also the nonferrous recovery as well. In the U.S., scrap is bought somewhat on a calendar basis. So the domestic steel mills buy scrap on the first week of the month. The challenge with that is, as you're negotiating in that first week of the month, depending on how complicated the market may be, you'll lose an entire week of material coming into your yards. With your own internal scrap, that scrap comes in every single day, whether it's the first day of the month, the last day of the month, a Monday or a Friday, you have a guaranteed stabilized input coming into your shredder, very helpful for efficiency and productivity as well. So just an example here and then not to overkill the Baltimore Scrap, but very much in line with what we're talking about. You can see the 4 shredders denoted from upstate New York all the way down into the Virginia region, Baltimore and Pennsylvania. They have 17 locations, 1 MRP, 12 feeder yards, very much like our SA Recycling Group, hub-and-spoke. Shredders with a certain percentage of in-feed that allows them to run on a more stable basis. It's not 100%, but it's a percentage based on regional market share -- based on regional competitiveness rather. You can see around 600,000 tonnes on an annual basis. We do see very complementary to the Sims Metal, a nice flank of insulation, if you will. And we absolutely think we can learn from them as they can learn from us. There's some nonferrous residue that we think we can teach them, but at the same time, we also think there's a lift in the retail nonferrous and ferrous unprocessed material. With that, I'm going to introduce you to Michael. I think Stephen did a great job introducing his background. Michael is the Global Head of Ferrous Trading and he's going to talk to you a little bit about ferrous go-to-market.

Thanks, Rob. Good afternoon, everyone. What we are seeing and what has been spoken to a lot by both Stephen, Rob, John and Michael so far today is the evolution of the scrap market as we go through this decarbonization phase that we're having to implement globally at the moment. So what we're seeing just here in NAM, obviously, we've talked about a transition towards EAF. Certainly, since 2020, there's been an acceleration, continuing new plants coming to market, increasing demand all the way out through to 2028 and only yesterday, an additional plant announced for construction in Mexico as part of to increase and complement their already existing plant. What that will do, obviously, continue to disrupt markets within NAM and increase competition for tonnes across the board. So for Sims, on a trading basis, for ferrous, what we have to understand is how this demand and both geographically and also here in NAM is going to affect and disrupt existing trading patterns that exist and have been in place for many, many years to this point. So pathways to market. Sims has an extensive international network of customers that we're consistently moving material to whether it's in bulk, whether it's containers and from multiple regions around the world, whether that's ANZ, U.K. or North America. So one thing that's been important to us is capturing that data as we see it live day-to-day and how we can respond and react to it more quickly. And that could be looking at how we pivot between different channels to market. U.K., for example, right now, we have pivoted away from bulk, which has been consistently a market there for the previous few years as that Turkish market and other local short sea markets have provided a better FOB value for the business. Within a 6-week period, we've basically turned the business and pivoted towards virtually all containerized movement of ferrous scrap, whether that be busheling materials, shredded material, HMS material. So the business and with strong communication with the operations department have managed to pivot away from bulk traditionally and into the containers to basically maximize the available value and margin that there is for Sims. And having that optionality understanding where that pricing is, getting that feedback from our agents, from our customers globally and being able to respond to that is very important to how Sims now go forward in what is a changing environment and moving away from the historical patterns that we've seen. So understanding net sales optimization, but also then working closely with our operations team, with John's team, with Michael's team, with the other teams in ANZ and U.K. to be able to maximize that. We can't pivot our tonnes into what might be the best operationally, what do we have available, how much can we do from this area by barge, how much could we do via containers? And understanding that will help us grow that business and be more reactive to very much dynamic pricing that we're seeing globally now within the recycled steel markets. Understanding for us the tools that are available, consistently, we are seeing an evolution in the recycled steel markets, whether it's futures and options pricing, whether it's index pricing, how we use these, can they complement our business, can we use them, are they just informational aspects for us, or are there tools that we can actually bring into our portfolio and utilize to best manage our execution and our exposure to these markets as we move forward? And then lastly, I don't want to overplay on Baltimore, but Baltimore fits very nicely into what we're talking about here of sales optimization, pivoting, being able to look at bulk export, being able to feed the domestic market, looking at containerized projects, all of these things are currently captured within the Baltimore Scrap. And so this will be a very strong complement to an existing ferrous trading business and how we're going to adapt to the markets that we're currently facing. I think one thing that I also want to point out is that we looked at the previous pathways to market. A lot of material and flow here points away from the U.S. There's nothing to suggest that we can't actually use our bulk infrastructure to bring material back into the U.S. to feed that demand that we see is likely to come. Can we bring material back from Europe? We already do. Can we expand that? And how can we use our existing networks to maybe reengineer in a small way those flows that we're seeing out of the U.S. back into the U.S. to complement the demand? And that's something that Sims is very well positioned to be able to do. I'll pass back over to Rob.

Yes, what I would -- I'll just finalize here with the nonferrous pathways to market. John already spoke a lot about the Alumisource business. But -- and Stephen spoke about our customers' customers. So going back to 2018, Section 232 comes into play and not only does it -- and we talk a lot about the steel business and how that's grown that reinvestment in the EAF production and so on and that end-use demand. The same is very apparent in the aluminum side as well and on the copper side. Roughly 2 million tonnes of new aluminum melting capacity has been announced in the United States. And this is sort of the customer's customer, if you will. Since 2022, you can see $150 billion in private investment in 47 new facilities really in the electrification side of the industry. 27 solar panel and cell manufacturing facilities coming to the United States, again, largely east of the Mississippi. 10 new battery manufacturing plants and 10 wind power manufacturing plants. Stephen mentioned the Inflation Reduction Act and the Infrastructure Bill in general. You can read what you can see there on the EV manufacturing side. $2 billion in grants and $3 billion in loans. The power grid, $74 billion, clean energy financing and so on and so on. So this is that end-use demand that's beyond the melting capacity that we serve, the raw material side. So we like this space. We like where it's going to be in the midterm and really right now. If you look at clean technology in general, and we alluded to this early in the presentation. But internal combustion engine, usage of copper and aluminum, when you look at a battery electric vehicle, you can see on the aluminum side, it's twofold. And on the copper side, it's fourfold. So as more and more of the sales continue and the manufacturing process goes towards electrification of vehicles, you can see the kilograms per unit or kilograms per car that on the back of all of the steel demand to build those facilities is a quite nice look into the future. Same with renewable energy versus more dirty coal and gas, you can see the multiples of metal intensity and demand are absolutely there. So Alumisource, and somebody asked, how does scrap get bought and really not to get into all the Grade 1 kind of what happens in scrap. But largely, if we think about dealers or peddlers, A, B, C, Ds, there's various degrees from people that come into our facilities and SARs facilities as well with pickup trucks or even shopping carts, if you will, at the lowest sort of denominator level right up to very sophisticated scrap dealers that have their own shredders and so on and so forth, or we're buying scrap from a manufacturing process. They're waste, they're recycling. So as we think about scrap generation and how we fit into the value chain, this is the origination and somebody has to go out and collect that scrap, as Stephen said. We have largely served an aggregator. So we are buying bigger lots, and to some degree, a small amount of processing, largely just to facilitate logistics the end of the day, and we can move nonferrous a lot further than we can ferrous because of the value, obviously. Where Alumisource puts us is into this category where we're actually preparing a homogeneous ready product to go into a furnace. And as John mentioned, whether it's a 3000 or 5000 or 6000 grade. We're also now getting into remelted secondary as well in a very small way, but it's part of the solution of raw materials for those end users as well. And we like the position that, that puts us in. So very, very much a little bit further along the value chain, providing the competitive advantage. It does provide that innovation side a barrier to entry. But it also -- as we get further and further along and closer to solving solutions for end users, some more profitability there as well. It is a very customer-centric focus on the value and use on what the customer is able to put into their furnace. And as we say, it's a homogeneous raw material product. And Alumisource does provide us with a strategically well located 2 facilities really in a good demand area right now, but also for recently new demand areas that are going to be expanding as well. And that's it. So if there's any questions for Michael or me?

Of course. Sorry, Rob, can I go back to -- or Michael, to Slide 40, just the top left. Now call me old-fashioned, but I'm looking at the export from the U.S.A. going into a pretty rapid decline through '23 and accelerating into '24 and going down in '25. Is this -- and I appreciate the growth in domestic scrap consumption. But is this sort of like a sense of urgency given where NAM is positioned on export tonnes? Because that graph to me looks sort of concerning, but maybe I'm overreaching.

As people look at it as a risk, I look at it as an opportunity. It's a customer that needs a product, and we have the product. As I said earlier, steel mills and my background, Simon, is steel mills for 25 years, can't and won't do it all themselves. Stephen Mikkelsen and I are just recently back from a very prominent producer in the United States. We have an excellent relationship and they're looking to expand, that's the math. Does it play out that way? I don't know. Supply elasticity, and we talk a lot about this in our meeting rooms, we'll bring out more scrap. How quickly you and I dispose of our fridges and stoves and car bodies, that all plays into how much is going to be left. The reality is -- and I think this chart here on the far right tells you when John speaks about BOFs utilizing 5% to 25% scrap. These guys use, let's say, 85% to 90%. Some of the flat-rolled producers are probably more in the 75% when they use their iron and DRI. But as we add that capacity and to your point, those are publicly announced capacity additions. That's a 4-year average of what the U.S. exports, 13.5 million to 14 million tonnes. In '24 to '25, there's a 10 million tonne spike in the EAF production. And that's before we even talked about the announcement. So there's a massive demand coming. There's a massive demand coming because there's a massive demand of infrastructure demand. And that is going to add the need for melted import steel in the United States because that's the only steel that can go into those projects.

That's super helpful. Maybe, Michael, you made a comment that the U.K. has pivoted away from bulk 100% containerized. Maybe this is part of a two-part question. What markets have you pivoted to that are taking container scrap? And we know Taiwan takes a lot, but I'm trying to think about it from the U.K. perspective. And secondly, just more broadly in terms of end market demands for seaborne ferrous. I mean Turkey is buying billet from Russia. Could probably do that for as long as it likes given the excess of billets being produced in Russia. But we've seen Bangladesh and India really ramp up in terms of demand. So how do you see the sort of evolution of the end markets for exports? It's the second question. The first one is, where is the U.K. pivoted to?

Yes. So from a U.K. perspective, it's not 100% into containers. We're probably around 75% to 80% into containers having been less than 10. The end use markets for those at the moment would be India, would be Bangladesh, would be Pakistan. They're the main receivers of containerized scrap. From the Indian perspective, we saw a very strong spike middle of last year where they bought upwards of 25 to 30 bulk cargoes. And I think the experience they had on the receiving end for those cargoes was a challenge. They weren't used to receiving bulk. And their inland logistics became complicated. So what they have done, they've gone back to buying more containerized material because it's what they know it's easier to handle. And post-COVID, we've seen the availability of containers and the actual freight rate for containers drop considerably. So that ability then for them to receive an increased amount of scrap via the mode that they're more comfortable with has led to an increase in purchases by those countries. So Bangladesh also, as I say, will buy container and scrap in volume. Pakistan and India are the main sort of avenues for that material. And that covers both Europe and the U.K. So there will be other parts and other suppliers that will be pivoting in a similar direction.

And the growth you see the map changing?

Yes. I mean I think that map, it's going to -- it's constantly evolve in ebb and flow depending on domestic scenarios. Turkey at the moment, they have moved back down from probably close to 80% capacity utilization down to maybe around 60% where they are at the moment. So they may be down 15% to 20% in terms of arrivals of bulk vessels on a monthly basis. That's allowed the capacity to go towards India and Pakistan. I wouldn't be surprised if that turns its way back around in the next 3 to 4 months. And we see a pivot back towards the bulk aspect. But for us, what's important is trying to recognize and see those as they're making that transition so that we can get ahead of the change. And you're managing our internal data and managing the data that we see come back from our end user markets is what's going to be really important for us to take advantage of this volatility that's becoming more and more present in the market.

[indiscernible] follow-up. Just on that specific point, it was one of my questions. And we've talked about -- and I know Simon raised it earlier. But if you're selling tonnes before you're buying tonnes, I presume you are knowing the source of those tonnes, that becomes pretty important as well as you're filling a cargo. So how is your visibility in terms of forward planning to knowing where your scrap purchases are coming from to fill those orders?

Yes. I mean, the scrap purchase aspect of Sims, whether it would be NAM or whether U.K. has been fairly consistent over a period of time and what we receive into yards and how we receive that into yards. If we look at how we're going to forecast a month or 2 ahead there is we can look back at the previous 3, 4, 5, 6 months and understand what those trends are going to look like. Obviously, we've been impacted in the last couple of months, flows have become slower. And so encouraging tonnes has become a little bit more difficult. And so working with our buy side, we then had to adjust what our sales program might look like to take into account what we're hearing back from the commercial by team on the ground, what's available, what do -- what's available in other supply stock yards, is that going to come, are they holding back tonnes, are they anticipating a rise, is our decrease in flow due to their expectation that the market is probably going to have a jump in the next 4 to 6 weeks? So there's actually material being held that will be released at some point. So also understanding from the commercial buy team what they're seeing and how they're feeling the market will help us adjust our sales strategy.

Well, I'll add. The process is we've implemented SOP. So sales and operations planning. We have a 60-day view forward constantly, where we're working not only with operations on making sure that they have the capacity but not in a maintenance outage, but we're also working with finance to make sure that we're buying and selling to the cash flow requirements of the company and the working capital targets or where they need to be on a 30-day and 60-day basis. So that's a process that we've put in place in the last 4 to 6 months there.

And does the [indiscernible] Stephen, you could talk to this, as the ERP implementation have any role in this? Is this part of this process? I mean we to great talk about the ERP...

That particular one that Rob was talking about the ERP doesn't play a huge role in it. That's around -- that around straight communication between the buy and the sell. So short answer is no to that.

[indiscernible].

So the ERP is around inventory management, around the financials, their relationship between inventory and cash flow. That's where the ERP is helping us there.

Sorry, just a quick question on this pivot in the U.K. Is that unique to Sims? Or has EMR also shifted to containerized?

I would expect that they have also pivoted to containerized as have other suppliers I would imagine. What we are or what we haven't seen yet is capacity from container lines being used up so that we aren't available to continue or we're not seeing increases in container pricing. So I would suggest that not everybody has moved in that direction yet because we would start to see a reaction from the shipping lines if there was suddenly a huge volume of boxes come to the market that there wasn't previously. So yes, I would expect that others are seeing similar price dynamics. Quite how they responded to it, not quite sure. But to this point, we're not seeing the availability of containers or freight pricing on containerized, push and spike to then bring that back into line.

Okay. But Sims' U.K. operations are more suitable to less bulky bulk than, say, EMRs, right, given the size of the ports, et cetera?

In theory, yes. The draft availability for us at our deepwater bulk ports is not what is there for EMR, correct. But at the end of the day, if you're seeing a $20, $25, $30 premium for putting it in containers, you're not going to continue down one avenue, you are going to pivot to take advantage.

Sorry, we need to stop here and break for lunch. So lunch will be served in the hallway. And if we could all get back here 5 to 2, please. [Break]

All right. Good afternoon, everybody. My name is Tyler Adams. I'm the Chief Operating Officer at SA Recycling. I have here my father, George, George Adams, you'd like to introduce yourself.

I was going to let Tyler start. But yes, as I said earlier, I'm George Adams. And the -- I actually have -- as I tell people all the time, I am the luckiest person in the whole world because I've had the great fortune to have an amazing family from my parents to my siblings in the transition to my sons. Tyler is here, but I've got 2 other sons that are working in the business also and then amazing employees. As we said earlier, we would argue who has the best employees, right? But we'll disagree that Sims have the best employees. But we have amazing people. And so -- and I told people all the time, I'm the luckiest person of the world. So anyway with that, I'll let you.

All right. So we'll get into a little bit of detail about who we are and what I say recycling is. Here's just a little bit about our Board members as well as our upper management. As we discussed earlier, 4 Board members from the Sims side, 4 from the Adam Steel side. Our executive team below. My father, George; myself; Mark Sweetman, our CFO; as well as Terry Adams, who was going to be here, but anyways, our Executive Vice President as well as one of our Board members. Just a little bit on just the collaboration in the general marketplace between SA Recycling and NAM. We've already talked a lot about many of the synergies and the participation and the cooperation that we have here in North America. Obviously, there's the Sims Global trade aspect. All of our ferrous metals are traded via Sims Global. That's been an excellent working relationship now since our inception. Really gives us one voice in the marketplace. All of our containerized shipments, our bulk shipments all are done through Sims. And it's really been, I think, a great strategy for both partners here. On the nonferrous side, it's a little bit more of a collaborative effort. We have our nonferrous trading team. Much of those metal units are still traded through Sims and through their global network of traders and representation throughout the world. But we also have our own trading team. And again, there's a lot of collaboration between the 2 teams. We also mentioned on the EHS side, obviously, safety and environmental standards. We are constantly collaborating on that. And then lastly, just we had also mentioned the and the Houston swap. And we got into a little bit of a discussion in terms of how we manage through various acquisition strategies, and that was just one good example of us really optimizing our assets and making sure that we're really geographically aligned. So SA Recycling has over 3,000 employees. I think we're up to 3,300, 3,400 now. We're operating in about 16 states, 24 shredders across the United States and about 130 facilities. Further within that, we have over 40 nonferrous bailing operations. So much of our acquisitions in our growth have really been focused around nonferrous growth, processing capacity and more grades than just shredding unprocessed ferrous grade. So really kind of trying to diversify the capacity in which we can process nonferrous metals and as well as ferrous grades. Okay. So there's been a lot of comments, questions about maybe some of our growth. And here's the last 7 or 8 years or so of acquisitions, 20 acquisitions since 2017 really in a wide geography. We jumped from the West Coast and being predominantly a Southwest U.S.-based operation with the acquisition of Newell Recycling in Atlanta, Georgia. That really gave us a stronghold in the Southeast marketplace that, I would say, catalyze much of our growth throughout the Southeast. We're arguably as large throughout the Southeast as we are now in the West Coast. And really, that was a result of that prime footprint that we were able to establish there. From there, there's just been pretty much rapid acquisition growth throughout the continental United States. We obviously won't go through these. There's a wide array of types of acquisitions, but a very diverse strategy in terms of the capabilities that each of these acquisitions present. For example, Georgia recyclers up there in 2019 gave us bulk loading ship capacity in the Southeast. That was a critical strategy that we needed in order to diversify our predominantly domestic footprint in the Southeast and give us that export capability in the bulk market. That's come to fruition a couple of times. We've actually only loaded 1 bulk ship out of that port. However, having that option has really given us a lot of leverage in that domestic space and multiple times has garnered significant returns as a result of that. So you don't have to actually utilize it in order for it to be beneficial for us. There's wire chopping operations, there are shredding operations. Again, just a wide array of capacities that are represented up here. So feel free to jump in any time if I...

That's right. I think one of the questions that was asked earlier by Simon, and I think that when you start talking about -- I guess they want me to stand in front of here, when you start talking about this and he said, how did you -- how do you possibly integrate $1 billion worth of acquisitions in that period of time. And actually, I think it's about $1.2 billion of acquisitions that we've done. And really the key to being able to do all this, right, is how do you assimilate those people in and still keep your culture. And I think I ask them to send everybody a book. I don't know if you guys all got one of my books. But we really work hard at bringing the culture of the company to our employees as quickly as possible. And it is our incentive program or bonus program, whatever you want to call it, definitely gets people's attention right away. The first time they get a bonus, then they really -- they change their thinking because I think most people don't believe that they're actually going to get a bonus. A lot of times, people get promised things and it doesn't happen. And so we work really hard to try to integrate the people into our culture. And there's nothing like receiving a check for them to start believing in you. And as I was talking behind there in the back, I try to take and make every single expense in the company come out of somebody's wallet, right? If you can get people to start thinking about like it's their money. And if you can make every expense in the company affect someone's wallet, whoever owns that wallet is going to watch it, right? And so I work really hard at trying to develop this culture where the people have ownership on what they're doing. And it can be a little challenging if we're buying operations that have union operations, but most -- the vast majority of all these acquisitions are not union. And so it's much easier to bring the culture in there. And so -- but really, if you add all those up and you add before then, since we formed the joint venture, it's a little over $1.2 billion in acquisitions that we funded out of cash flow and profits since the formation of this deal. So anyway, keep going.

I think it's about 50 acquisitions right?

Yes. It's a lot.

All right. So just getting into a little bit more about the growth strategy. Obviously, we're always seeking opportunities. We probably sign an NDA week every other week, right? There's -- the market, especially right now is exceptionally liquid. A lot of people looking for exit strategies. We spoke about succession planning in many of these opportunities. And a lot of the legacy mom-and-pop type scrap operations just don't have the succession plan in place. So lot of opportunities there. We are one of the largest wire chopping companies in the country now, just in terms of the pure quantity of wire choppers from East Coast to West all the way down into Miami, we have wire choppers, again, trying to diversify a bit into the copper market and making sure that we're producing copper units as well as aluminum and ferrous units. Obviously, we're always monitoring cutting-edge NFR technology. And I believe we have -- how many patents we filed now?

We have 7 patents and we have an 8 one we're trying to get, MRP plants.

Again, just an example of -- it's not just about acquisition growth. It's about how do we create more value and how can we pursue higher yields and generating incremental margin through our existing waste streams. Let's see. Again, we talked about the 50-plus acquisitions in 15 years. [indiscernible] mentioned a little bit about just integrating these acquisitions and how we accomplish it. The scalability of the infrastructure that we have. As we go through and implement new systems and processes really it has to pass the scalability check. And as any company gets larger and gain size and mass, it really has to pass the fact that we can scale it and we can implement it across a wide array of facilities and we need to be able to do it quickly. So a lot of what we do in terms of as we're implementing those is just making sure that we can implement them quickly. We can close an acquisition in 30 days from start to finish and we've done it. And that's allowed us to capitalize on some unique opportunities that whether you're approaching the end of the tax year and someone just looking to get out, that's kind of allowed us to capitalize on some of those opportunities, being able to move quickly trying to eliminate red tape and executing acquisitions in a quick manner has been extremely effective. Obviously, there's a number of different type of acquisitions we've done, whether they're bolt-ons, whether we're entering an entirely new markets such as the Newell acquisition. Again, that catalyzed us to be able to bolt on an entirely different array of geographies onto that existing footprint and which all continue to gain from a scalability standpoint as well as the synergies that we've been able to achieve from all those acquisitions just become exponential. So it's been proven to be very effective. Again, on the capabilities, just sourcing material, we also talked about our retail presence. We're very effective at the peddler in the retail space. And so many of our acquisitions, they're really -- they're not even large acquisitions. In some cases, it might be a few hundred thousand dollars to open and buy a small retail footprint. But we're able to utilize that footprint to then continue to add market share to our overall shredding and sourcing material.

So if you look at our -- actually, I just want to correct one thing. We actually have 3 patents issued. I have 4 very close to be an issue. But as I thought about it, they're not actually issued yet, but -- all on MRP technology. But on the -- when you start talking about peddlers. And really, I think that our strength as a company, one of the things that we're just really good at, and I think better than anybody else in the country is our retailer peddler trade. And the reason is, is because that's our roots, right? When we started out, we were a little tiny company. When I first started working from my father, full time -- forget being in school but full time, we had one truck, one crane and one tow truck, and that's all we had. And so we built our first shredder out of scrap, which actually came from Simon, our first shredder that we got came from Baltimore, actually came out of Pennsylvania. But anyway, it was an old piece of junk in the ground or sitting on the field that they had sold and we built it -- they put a new one in, and we got their old one. And -- but we couldn't buy -- I couldn't afford to buy dealer scrap because we didn't have any money. And so we had to buy retail peddler scrapping. We started doing little peddler yards because that was the only scrap that we could buy. And so that's really our roots. Our whole company was grown up or based on buying the peddler trade. And so everything we do as we go out there, we buy the peddler trade because that is the most difficult for people to compete against you with, right? A big steel mill can throw out a price out there to a dealer, and he can overpay for that dealer to travel long distance. It's really hard for them throw a price to pickup truck. And so -- and that's really -- our focus on all of our facilities, we focus hard on the retail trade.

So obviously, all these acquisitions don't come without challenges. There's a lot of opportunities, obviously, but from the challenges that are created, obviously, there's a safety concern. You're integrating new cultures. Typically, a lot of these yards have 0 to no safety culture. So implementing our safety culture and trying to drive our PPE policies, our best practices through -- across -- especially when the acquisitions are relatively large, trying to get that safety culture and that injury rate in line with what really our goals and expectations are, can oftentimes prove to be challenging. I have a slide on our safety that we'll get into here in a little bit. We mentioned the preservation of our culture and the book has been in an extremely useful tool in ensuring that we can drive that culture and get to all of our employees. They know what our expectations are in terms of the way our management is to treat our employees. We encourage them to push back, speak up, really trying to make sure that we maintain somewhat of a ground-up mentality across the entire platform. Lastly, many of these acquisitions are really capital intensive. They're oftentimes distressed assets. They've been undercapitalized for a number of years. depending on where we are in the business cycle, these could be businesses that have been losing money now for multiple years. That's great because we're able to pick them up for discounts. The flip side is that they're very capital intensive in terms of rebuilding them, investing in them, putting the infrastructure in to truly maximize what we consider their potential to be in achieving those synergies. Obviously, on the opportunity side, there's a large untapped market there. We talked about the size and scope of the U.S. scrap market. We still believe there's tremendous potential to continue to grow. We will maintain that vision and that trajectory on any strategic acquisitions. One of the best parts about many of the facilities that we've acquired is really the human capital component. The assets that we've acquired purely from an employee and a talent standpoint has been exceptional. Some of the best members of our team today, we've acquired through growth. And that's really allowed us to continue to grow, again, exponentially as we've acquired really some key level talent throughout those acquisitions. Lastly, I'll just say that many of these assets, again, they're legacy, they are third, fourth generation in the event that these assets are picked up by any of the other large players very unlikely that they'll ever come to market again, right? These are really oftentimes onetime acquisitions. These are not acquisitions that are going to hit the market 3x, 4x, 5x, maybe if they're picked up by a private equity group. But there's not that many private equity groups out there in the M&A space, right? So these are assets that really -- it's almost a race to pick up unique legacy-type assets, and we've been successful at capitalizing on some really unique facilities that, in my opinion, you can't necessarily duplicate. I'll let you take this one. This speaks a lot about really just the entrepreneurial spirit, the book, the bonus program, et cetera.

So look, it really goes to the core of our company right? And as I said earlier, when I talk about having every expense come out of the wallet. And so if you think about -- if you -- when you talk about profitability be by location and as opposed to a cost center, most big companies run their individual yards as cost centers as opposed to profit centers. And so -- and the reason is, is because it's very difficult to do profitability by location because you have to do transfer pricing. And it's a lot of work, and it takes a tremendous amount of time. But it's all about the culture of how you're going to do it. If you're thinking about it, you're competing against very strong entrenched successful entrepreneurs, okay, owner-operator people in most markets. It doesn't mean you don't have the big steel mills, too. But I'm just saying in all the little markets that we're in and when we're trying to get out there and buy the peddler business, we're competing against people that are really mom-and-pop type operations. And so how do you get that culture across. And so by us taking and making each yard stand on its own, each yard -- and when we produce a financial statement for every single individual yard, everything single yard we get, they get their financial statement. The manager can see it, they can project it and the employees all benefit off of it, including the manager. And so -- and as I talk about in my book, we -- if you take -- for example, if you take a small yard in, we'll call it, a 10% yard and we say tax is 45%. So if a yard makes $100,000, that means the net profit of that yard is $55,000. If it's a 10% yard, that means the manager is going to make $5,500. And he's going to get that by the third pay period of the following month. And so what happens is it changes the paradigm on what is being done. And you guys are going to go down to the port today and you're going to meet Moises, okay? He's the manager down there. And so -- are we loading this ship. We are loading ship, that's awesome. So you guys are going to get to see we're loading the ship down there. And so I think they will stop at 5, right? So we've got to make sure we're there by 4.

We should get there by 3.

Anyway, the -- you guys -- you guys will meet Moises. And I talked about in the book but it's just an example of the culture. So before ships always come in wrong time. They come in Mother's Day, Christmas, Easter, that's just when they come in, right? It never comes in when there's a post to. And so Moises is down there. He's approving immigrate, and he's down there and he's loading ships. And his wife is always saying, "You do this on purpose, right? So -- because you don't want to be at the family, right?" And getting upset at him right, because he's gone. And so now we get the company, this is 2007, and we get the bonus program in. And the next month, he gets a bonus. And he brings his cheque home and his wife is like what's this cheque. Oh well, we load 3 ships, and this is the bonus. And wow, okay? And next month, the same thing happens, cheque comes in. What happened? We loaded a couple of ships. Third month, she's like, "What the hell, you doing home, you get down to load those ships, right?" Because you want that bonus check. They got 2 kids in college and they want that bonus check, right? And what it does is it changes the paradigm and it makes people become more of a teamwork because if you're going to be in this business, you've got to work hard. And it's really a family decision on what you're doing, the husband or the wife because we have a lot of women managers, the husband or the wife is there for long hours and/or they're doing work at home. And you've got to have that teamwork and that support. But like I said, you'll meet him -- you'll meet him later on today and you ask him, he'll tell you. But that's just the way it changes. And so -- and then the other thing is that a lot of companies don't share financial information, okay? We really share financial information with our people. Our guys, our men or women that are running our yards, literally, they get their financial statement. They can see it every day because it's live. And they have all the details of the yard. And a lot of companies never share financial information with their employees. I don't know they don't want them to know or what the deal is. But all our guys see their financials. They know exactly how much their yard is making and we expect them to be our partner. So they're not an equity partner but they're a profit partner, right? And that's really the key of what we try to do within our culture is to make our yard managers our profit partner. And because they're getting paid, they're getting that bonus the very next month, right? It becomes very real to them as far as what's happened. And people look at it. There -- everybody needs money to live on, people got kids in school and what's going on, and it makes a big difference when they can feel that they can make more money by doing it. And so -- and also our guys have tremendous ownership. We're very much a bottom-up company, not top down. A lot of companies, they make all the decisions at the top. And maybe these are really brilliant people. I don't know. I'm not that smart. I need people that can work hard and tell me what I need to do. And so we're bottom up. Our purpose within our company is to support our people, right? If you look at so many companies, the corporate, right, they're like the top and everybody works for corporate. Whereas on us, it's the opposite. The corporate is supposed to be serviced for our employees. And so the -- they're supposed to provide that service, our employees aren't supposed to work for corporate and you change it around as far as what's going on. And it just changes the culture and it changes the dynamics. And it's really of what we do, I think the most -- well, you can see some of the comments, right? The family that runs a company are born in and raised in the industry, so they understand it. How to empower their employees to continue to grow themselves in a company in competitive market. And so you look at, obviously, the -- it's different when I go out in a yard because I've been -- I grew up in the yards, right? I've done every single job in that yard. And so I can talk to the guys. Always [indiscernible] out in the yard. I never go out in a suit or a coat or anything like that. I just go out looking like one of the guys and -- so I can talk to the people. I climb up on the equipment. I shake hands with as many people as I can. And that's this whole culture of what we do. But I think the #1 thing right here on this slide is we try to put an entrepreneurial culture within our companies, each one of our operations. And I think that's why the individual companies are so successful is because of this entrepreneurial culture that we can put in there.

Last comment I'll say just on the bonus perspective. So this Friday, right, it would it be the 15th, we'll pay bonuses for whichever facility was profitable in the month of August, right? So it's real time. And that's really the objective. It's that everybody is rewarded almost instantaneously for their performance last month. Doesn't matter what the rest of the company did. So if I have a facility in Newman, Arizona, that was profitable, and the rest of the company didn't make any money, those employees are still entitled to a bonus. They performed, right? And that's a critical component to this. So... All right. A little bit about our sustainability themes. Obviously, many of our core principles are very much in line with much of what was discussed earlier. Certainly, from a safety perspective, again, I'll get into safety culture a little bit. You saw some of our glass door rankings, if you will. But in terms of our workforce, 38% of our managers are female. And just some of the accolades we've earned from a workplace environment. On the environmental side, we were the first U.S. recycler to install emissions controls on its shredders, Terminal Island, which you'll see in a little bit, installed their RTO here in 2011. Anaheim was in 2014. Again, these are the first in the United States. We've got solar panels and electric equipment. Again, you'll see much of that at Terminal Island. The electrification of our fleet has been an ongoing process. We're continuously reinvesting, upgrading most of our equipment to Tier 4 final. And so again, this is a company-wide initiative that we've been implementing for a very long period of time. Our equipment budgets anywhere from $80 million to $100 million a year in terms of CapEx, purely mostly from a replenishment and equipment standpoint. Again, recapitalizing a lot of our distressed assets and so forth so. Our stormwater advanced treatment systems have been implemented throughout '21 and '22, working in collaboration with the Water Control Board and Orange County Coastkeepers to draft permits tailored to the scrap metal recycling industry and particularly in the San Anna area. So again, all of these initiatives have been long ongoing and been really a core since our inception. Do I... [Presentation]

So now, right, we just did another one of those same little things like that with all the people down there because we just crossed the 5 million tonne mark. So this is when we first installed the crane and now we just -- we crossed the 5 million tonne mark loading with that crane. And so. Anyway you're going to see it, actually, we're loading the ship. So this is just pure luck because ships never do what they're supposed to do. And -- but we're actually loading a ship down there. So you'll get to see that crane work and the ship work.

All right. Just a quick slide on our safety. And a couple of things here. On the dark gray line, you'll see, this is just purely our facility count over the last 13 or so years. You can see a pretty significant ramp-up and escalation in the pure number of facilities. The light gray in the back is the number of man hours worked per year. So you can see up here, we're running upwards of 8 million to 9 million man hours per year. Almost -- let's see here, almost threefold what we were back in early 2015. With that naturally comes challenges from a safety and a recordable injury rate. We saw this red line here, a significant decrease as we implemented our safety program and our safety culture back in 2010, 2011. We really started to plateau and we were still seeing some positive improvement. This recent escalation in overall man-hours and facility count really gave us this kind of uptick, and we've managed to get that back on track here down and moving back towards an improvement. So still, the black line being really the sum of the benchmarking data that we collect to working with the other industry participants in the United States. So that black line is really the industry standard as I would call it, relative to the scrap metal industry. The largest scrap metal companies in the U.S. are reporting against that benchmarking data. So we're still maintained significantly below that. But again, unfortunately, it's this increase here primarily as a result of the newer employees, the newer facilities that we acquired. And again, just one of those challenges that we see as we continue to grow. Okay. A little bit about our overview. Again, you guys have seen multiple maps today, so I won't get too much into it. Obviously, the orange dots being our facilities. We are actually missing one right down here in the Texas. That is our ship-breaking facility that we acquired back in late last year, 2022. We're dismantling ships for both the commercial and the naval industries down in Brownsville, Texas. The black and -- the gray axe is obviously being the U.S. steel mills. Again, kind of pretty well situated to service most of the domestic steel industry. Approximately 50% of SAR shredders and use advanced ASR processing technology, the remaining have access to that capacity. So similar to the way that we've implemented really a hub-and-spoke methodology for our feeder yards to feed into our shredders or feed into our non-ferrous hub processing facilities. The newest and the greatest nonferrous to shred and MRP recycling technologies are obviously require significant capital investment. Many of our shredders would never generate the kind of volume to justify that type of investment. So we've been working on technology and ways to bring that material to travel longer distances to be able to feed into the larger plants. And so really, it's a hub-and-spoke methodology on top of that, which is really are all of our shredders feeding into larger plants. Not unlike what many companies are doing. All right. Just to go into a little bit of our competitive advantages. Obviously, we've talked much about this over the course of the day, large geographic footprint, the hub-and-spoke methodology. Large footprint of shredders, engineering excellence and strong balance sheet. Really, on top of this, I think what's critical is the diversity in our logistics capabilities. Obviously, we talked about our bulk loading capabilities. We've got about 20 to 25 container loading facilities here on the West Coast. Again, we use patented container loading technology to be able to load HMS containers in less than 20 minutes. That's really a strength that allows us to diversify the West Coast operations in particularly, and able to feed the Taiwanese export market as well as the bulk export market. So in a moment switch, we can divert material into the bulk market or into the container market. We're present in both markets at all times. So depending on what our position is, depending on what premiums we can achieve in either market, we're able to pivot. And that's been a critical strategy for us here, especially in Southern California and one that we've implemented now for 13-plus 15 years or so. The farther east you move, you really move into much more of a domestic footprint. And again, many of our recent acquisitions have given us tremendous flexibility and able to move scrap longer distances, whether that's by barge or via rail. Our railcar fleet is in excess of 1,200 railcars. We have over 500 trucks, 11 facilities with barge loading capabilities, 56 facilities with rail access, and that number continues to grow. So we've recently completed numerous rail expansion projects. So a lot of these legacy assets that we purchased maybe can hold 4, 5 railcars. We need sites that can hold 13, 15, 20 railcars, right? And so we've been able to invest in much of that to make sure that we can get that scrap moving longer distances. And much of that is catered towards feeding, I guess, the complexity of the domestic market as well as maintaining that capacity to get scrapped to move longer distances. Just 2 generic charts, really one -- one of which is the rail map here. Again, kind of focusing in many of the areas where we're geographically located, chart on the right being the major barge ways, the Mississippi River being a critical component to scrap movements. With the PSC acquisition, we had acquired several facilities now that have a significant access to the Mississippi riverways. Much of the mill expansions coming online here in the foreseeable future will rely heavily on the Mississippi to move scrap. So that's going to be an important part to our strategy moving forward. Again, talked a little bit about overall profit margins well and sourcing of scrap. Stephen had mentioned this a little bit earlier. But in terms of dealer source. You can see the dealer source is a much smaller percentage of our intake. And then overall, in terms of non-fare sales volumes, again, trying to achieve a little bit more of a balanced approach, whether it's zorba and MRP grades, nonferrous retail as well as ferrous grades. And then the export domestic composition, which again has garnered quite a bit of attention here recently. That's about all I've got. So -- unless I missed anything. I guess now we'll open up to Q&A. I'm sure there's plenty of questions. I can't imagine you had a questions today.

Thanks, Tyler. Thanks, George. I appreciate that. You've made some really interesting points, $1.2 billion worth of acquisition over the last 15 years. Looking at the ramp-up of the facilities, a lot of those has been made since 2020, a small impact on health and safety. I appreciate that because you are at pace integrating these facilities. And if you can turn around an M&A deal in 30 days, then you've obviously got a very good capability in that space. Just in terms of what the future footprint looks like, George, is -- are we going to stay at that pace? Or is this a consolidation phase? Do you feel like you've got the right footprint? And you made a point, Tyler, about the legacy assets, once they're sold, they don't get resold. So it's a bit of an arms race on for those legacy assets that are finished. So I'm sort of trying to think over the next 3 to 4 years, how SAR is going to?

Right. So look my family and my executing joke that I've never met a scrap yard that I don't like. And so -- standard joke in the company. And the -- and I guess maybe it's a little bit of hubris on my part, but I feel like there's not a scrap yard I couldn't fix. So it doesn't matter how bad it is. I can make it better. The it's not always 100% true, by the way, but I still feel that way. The -- look, we're going to keep growing. We have to grow out of profits. And so if you look, the reason there's more acquisitions -- if you think about it, you have one yard, right? And then you make enough money, you get a second year. Well, now you have 2 yards that are making you money. And so you can buy the third yard quicker. And you can imagine by the time you have 50 yards. Well, now assuming you did good acquisitions and you're running them properly. Now you're making more money, so the 51st yard goes really fast. And so we're really at a point now where, obviously, we're making good money, and we keep reinvesting that money to buy more yards. And the more yards we buy, then if you do it right, you should make more money and then you can buy more yards. And so the curve kind of goes like this, and it goes up exponential. And so look, my goal is to keep buying yard and to keep buying as many yards as we can make profit to buy them. And the -- I'd probably never make a good public company leader because like the idea of buying back your stock would be like port to me. Man if I had money, I'm going to buy yards, right? And -- the -- and so -- and I don't ever understand all those different things. But for me, every dime we make that we don't have to spend on equipment and we don't get distributed back for tax and stuff, we're going to buy more scrap yards. And we're going to keep growing. And you talked about arms race. I mean, look, there is a lot of yards out there. And the -- and I think there's going to be a lot of changes in the future. And I do believe steel mills were buying more scrap yards. I mean they're doing it now and it's going to happen. But we're going to 2. And I think that 10 years from now, I plan on being a whole lot bigger.

Okay. That's super helpful. And then just on your balance sheet representation with the debt-to-equity staying pretty stable during this period. So two parts of the question. How much of your acquisition is out of free cash flow, to your point about buying one yard, two yards, three yards? And then in terms of your debt stack, is it -- what's the nature of that debt stack? Are they revolvers? Are they long-term debt? What's the...

Yes. So we have a revolver, and we have a fixed term. And so -- and it goes up, the term debt goes up and we pay it down, we make more money, we buy more yards, it goes up again, right? But if you look out -- if you look basically at our debt over the last 15 years, it's been -- the term debt has been pretty stable. Obviously, because we're so much bigger, the revolver, the working capital goes up much, much higher. But the term has been pretty steady on there. And like I said, we have to grow out of profits. And so it is our single biggest limiting growth. And maybe that's a good thing because that we don't get ahead of ourselves. And -- but that is what limits us there.

And just with the rates, they are -- obviously rates have gone up pretty dramatically over the last 12 months. Is that diminished some of the returns or some of the -- or change the return hurdle?

You absolutely have to factor it in, right? Before capital was almost free. And so now everything you do, you have to factor in at that much higher interest rates. So when we do a CEB, what the hell CEB stand for?

Was going to ask the same question?

When -- what we submit to our Board, right, before the cost of money was really not a factor. Now you have to factor in the cost of the money. And it didn't mean the deal's got to be cheaper or some deals maybe can't do.

Just Tyler, one for you. On the safety, the recordable injury frequency rate, is there a calculation-based difference between that and NAM because NAM was at 0.77 and you guys are at 1.54?

Yes. So I believe they were using TR [indiscernible]. Yes. So I believe it's actually the same calculation but ours is what, 200,000, it's total incidents, times 200,000 divided by total man hours worked. And so I'm not sure if that's exact calculation but I believe it's the same. It's a very impressive safety record to be clear.

Of your growth in terms of the last 5 years or so, how much has been organic and how much has it been through acquisition?

I think it's all been acquisition. I don't know we've had any organic growth. I think it's all acquisition. Pretty much -- I mean, look, you can greenfield an operation. And if there was nothing in an area, maybe you'd have to consider doing that. But I would much rather take out a competitor, then start a new yard and they're already established and then I got to compete against them. So to the extent that we can go in and buy out somebody that's already got a customer base, always -- already got to work for us. As Tyler mentioned earlier, I mean look at the biggest -- what is our most valuable resource, right? Our most valuable resource is our people, right? That is our single most important asset in this company is our people. And the -- we don't have extra ones. To go start a new yard and send 10 or 15 or 20 or 30 people there, it's very difficult to do. So we would much rather buy an existing yard. It's got people, it's got to permit and take out a competitor. And then we can grow from there in that region. So really, it's really all by acquisitions.

And George, there may be with 50 acquisitions, I'm assuming there's a lot that are strategic as well that what sort of return to you sort of targeting to get on those acquisitions?

So when we submit to the Board, we're always between 10% and 12% but the -- a lot of what we do is strategic. And so sometimes they're more important to me. Sometimes it's hard to say, let's just pick an operation, you take Birmingham, as an example. We have a shredder in [indiscernible] in Phoenix City and Decatur, right? And we had -- and we have 2 in Atlanta. But we didn't have Brigham. And it was -- they were coming into our market, and it was definitely a challenge. And so strategically, for us, Birmingham was a really important acquisition. And the -- and I think that our return on that one was a little lower, although ultimately, we're making really good money there now.

Yes. I think to be clear, that we generally present with the most conservative worst-case scenario, excluding any synergies, et cetera, that target is generally needs to be an excess of 12 -- 10% to 12%, right? And an optimistic scenario with all synergies achieved, we're well in excess of 15% on a general basis. So the opportunities are always there. But yes, we're generally, let's call it, minimum 10% to 12% conservatively, all the way up to 15% plus on the optimistic side.

But there's so much that we can do in an operation like a shredder -- most shredders don't have our technology on the nonferrous. And then we can take their waste and move it to one of our existing plants and get a lot more money on it. And then -- it's just the shear math of being in a market, you have a much better opportunity to make money. When you own the vast majority of the shredders in a region, right, you just have a better chance to move freight around, have very efficient trucking going back and forth. You just have a lot of assets in a region and you have much better control.

And the final question, in terms of the acquisitions themselves, are a lot of them relationship based? Or are they transactional in terms of the asset comes up for sale? And if they are the latter, are there people that you're bumping into more frequently than others?

Yes. So a tremendous amount of them are relationship, all right? You figure -- I was Chairman of our National Association and I still sit on the Board, I go to all of the Board meetings and literally, I mean, I flew in -- I woke up this morning in Louisville, Kentucky because I was at the Scrap Expo speaking yesterday. And so I speak at these meetings all the time. I was Fair Spotlight in Vegas. The last time if you go online, you can -- and you can look at some of my speeches that I've given in the industry if you just Google my name under SA Recycling, all my speeches are there. But the -- and so we're really well known. I mean as an example, in Vegas last year -- not last year but the year before last -- last year was in Nashville -- or this year was in Nashville, right? This year was in Nashville. Anyway, the '22 -- the Vegas '22 I keynoted or headlined the Fair Spotlight. And there was a guy sitting in the audience and his company -- not his company, but he was owned by investment fund but he was the manager of it. And they were working on selling and he heard my speech, and I'm talking about the Brownsville, Texas. And so because of that, he approached us about -- I didn't personally know him, but he approached us about buying this company, which ultimately we did. And the -- but the vast majority of the acquisitions are people that we know and that we've known for a long time. When we bought TVR indicator, I mean, Joel Dumbo and I had sat on the board for 30 years together in his when we bought Newell in Atlanta, we bought our first old shredder from Scott Newell. And when we built our mega shredder in 2004, we flew to Atlanta and Scott's sister, Sharon gave me the plans for their shredder. So I mean -- you have when they decided to sell their business, we're the logical choice. So most of the acquisitions we buy are relationships and built out over decades. But then also if you're in an area where can be a logical buyer. So like El Paso, I mean I talked to Lopez before, but I didn't necessarily know him. He hadn't really participated. But we were the logical buyer because we are the biggest player in that market. And so lots of times, it will go that way just because we're there. And also, we've done more acquisitions than anybody, more than 2x or 3x as much as anybody in the country. So we're in the American Metal Market, AMM all the time. And so people see it. And so people know that we're buyers. And so they also call and approaches. And so we get -- it goes both ways. But most of them are relationship.

Just one more comment just in terms of the organic growth, so to speak. We've opened about 4 facilities within the last year or so that have been what I'll call just restarts, right? These are facilities that were mothballed by previous ownership, whether it was PSC or Newell, et cetera. There're assets that we've retained. We really never could justify reopening them that -- but within the past 12 to 24 months, market have been such that we think those yards make a lot of sense, we've restarted them. They're already permitted. They require a nominal amount of investment. And again, it's just trying to maximize that footprint that we have. So there's been some growth to that extent.

Alex Rock, Evanson Partners. You mentioned patents and we've heard technology used a lot today. And you outlined in the case, I think the immediate case strategically is to grow the network as a priority. But how do you and Sims collaborate on R&D and tech. Can you maybe talk a little bit about that? And then can you talk about where you think we're in the journey to optimize what you're doing across the plants from a technological point of view?

So I mean, just like yesterday, we were us and Sims were in Atlanta. I said I woke up in Louisville, but yesterday morning, I woke up in Atlanta, right? And so -- but we were the -- we were just testing new technology on a -- not a re mill. What the hell was that? Cage mill. Jesus. We're just testing technology on a cage mill. The Sims was with me when we were in Venice, Italy and we sent samples over there and then they sent one of their people then, and we were doing some testing over there. And so we try to collaborate on some of the stuff that we're doing. We tend to be more wet technology because we're in the South, and they're dry in the North. And so because, obviously, it's much colder where they are and so everything freezes. And so we work a little bit different technology on, they're doing more with air. We're doing more of water. And most of our stuff -- most of our patents and stuff are based around water. But we do try to trade as much information as we can on it. And obviously, we do things a little different. As an example, in the -- in Australia, most of the way their shredders run is they do air right out of the shredder and they pull all the lights out before and then they end up with their heavies there, whereas here in the states, we run our material over magnets first, and then we do air. And so kind of different countries kind of have different ways. I don't know that one is better or the other but that's just the way it's always been doing.

That's it. No more questions. Stephen, I think you can -- for some closing remarks.

So we're closing it. So thank you very much, George. Thank you very much, Tyler, found that absolutely fascinating. Thank you, George, that was great. So the guys have helpfully got a spec on timing. I hope you appreciated that presentation from Tyler and George. I think it really does show how the 2 companies work together. I think it highlights the differences between the 2 companies, the similarities between the 2 companies, and I appreciate, found that very useful myself. So we're 2 from here, so George and Tyler have talked a lot about their technology, a lot about their facilities, so we're about to go and see terminal Ireland. And I believe we are leaving at 3:30?

Sorry?

We're living at 3:30?

No, we are leaving -- so if you could meet outside at 3. Yes, because we have...

Okay. Let's not miss the loading of the ship. So let's assume we're going to leave at 5 to 3, which is 1 minute. So let's get ourselves, we're -- that will get you hurrying up. So Anna, where [indiscernible] we're meeting.

So we're meeting outside. There is a bus picking us up to Terminal Ireland.

Okay. So outside. We'll see you there very, very shortly, when we'll get over there. Thank you.