Scrap Metal Giant Collapses, Putting Hundreds of Jobs in Peril
The UK's scrap metal industry has been dealt a significant blow as Unimetals Recycling (UK) has filed for compulsory liquidation, placing more than 650 jobs at immediate risk across its 27 locations. The company's owners submitted a winding-up petition on Monday after exhaustive efforts to secure a buyer for the business proved unsuccessful.
A Rapid Descent for Ambitious Start-up
Founded just last year in 2023 by metals traders Jamie Afnaim and Alec Sellem, Unimetals had ambitious plans to dominate the recycling sector, particularly focusing on critical minerals essential for the transition away from fossil fuels. The company's rapid expansion included the October 2024 acquisition of UK sites from Australian metals giant Sims for £195 million.
This substantial purchase included strategic assets such as four metal shredders, three port facilities, and headquarters in Stratford-upon-Avon. However, the company struggled almost immediately after the acquisition, facing challenging market conditions where scrap metal supply substantially exceeded demand, causing prices to fall sharply.
Financial Struggles and Failed Rescue Efforts
The business had already been under financial pressure, having lost £22 million in the year to June 2023 while under Sims' ownership. Despite Sims allowing Unimetals to delay a final payment on the acquisition, the company could not secure the necessary funds to continue operations.
In recent weeks, the situation deteriorated further with Unimetals filing three notices of intention to appoint administrators before ultimately proceeding with the winding-up petition. Professional services firm Alvarez & Marsal has been managing talks about the company's future according to reports.
Industry Impact and Employee Uncertainty
A Unimetals spokesperson acknowledged the distressing situation for employees, stating: "We have worked tirelessly to explore every possible option to secure new financing for Unimetals Recycling, with the aim of meeting our financial obligations and safeguarding the future of the business."
The spokesperson confirmed that despite substantial interest and attempts at completing a deal, no transaction was finalised. The company is now working urgently to agree on a clear plan and timeline for what happens next, leaving hundreds of workers facing an uncertain future.
This collapse comes despite the scrap metals industry generating billions of pounds in annual revenue by recycling metals including steel, aluminium, and copper. The sector had seen renewed hope with the transition to electric arc furnaces that melt down recycled steel, highlighting the particular challenges Unimetals faced in a generally promising industry.
Beyond its UK operations, Unimetals also maintains a hydrometallurgical facility in Kezad, near the port of Abu Dhabi, though the status of this international operation remains unclear following the UK liquidation proceedings.
