Scrap Metal Giant Collapses, Putting Hundreds of Jobs in Peril
The UK's scrap metal industry faces significant upheaval as Unimetals Recycling (UK) has filed for compulsory liquidation, placing more than 650 jobs at immediate risk across its 27 locations nationwide. The company's owners submitted a winding-up petition on Monday after exhaustive efforts to find a buyer or new investor ultimately failed.
Ambitious Start Meets Harsh Market Reality
Founded in 2023 by metals traders Jamie Afnaim and Alec Sellem, Unimetals embarked on an ambitious expansion strategy focused on acquiring recycling and processing businesses, particularly those handling critical minerals essential for the transition away from fossil fuels. Their vision materialised in October 2024 when they purchased 27 UK sites from Australian metals company Sims for £195 million.
The acquisition package included substantial assets: four metal shredders, three port facilities, and headquarters in Stratford-upon-Avon. However, the company quickly encountered severe market headwinds as excess scrap and steel supplies outpaced demand, causing prices to fall dramatically and undermining their turnaround plans.
Financial Struggles and Failed Rescue Attempts
Unimetals' financial difficulties became apparent earlier this year when the company struggled to manage the debt from its acquisition. Sims had allowed a delay on the final payment, but Unimetals could not raise the necessary funds. The business had already been struggling under previous ownership, recording losses of £22 million in the year to June 2023, according to the last published accounts.
In recent weeks, the company made three separate filings indicating its intention to appoint administrators before ultimately proceeding with the winding-up petition. A Unimetals spokesperson stated: "We have worked tirelessly to explore every possible option to secure new financing... This included an accelerated mergers and acquisitions process, supported by our advisers and undertaken in full collaboration with stakeholders."
Despite substantial interest from potential buyers, no transaction could be completed. Professional services firm Alvarez & Marsal has been managing talks about the company's future, according to reports.
Broader Industry Context and Employee Impact
The collapse comes despite the scrap metals industry generating billions of pounds annually in the UK by recycling materials like steel, aluminium, and copper for new products. The sector has seen growing optimism due to technological advances, particularly the switch to electric arc furnaces that efficiently melt down recycled steel.
Beyond its UK operations, Unimetals also operates a hydrometallurgical facility in Kezad, near the port of Abu Dhabi. The company acknowledged this would be a distressing time for employees and stated they are "working urgently to agree on a clear plan and timeline for what happens next."
The situation highlights the volatile nature of commodity markets and the challenges facing businesses in the critical recycling sector, even as demand for sustainable materials grows globally.
