Metal price rally brings record results for the recycling company

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“We’ve had one stable business model for decades that got us through the cold war, oil crises and the financial crisis. But with this spring’s extreme price swings for iron and scrap metal caused by Russia’s war in Ukraine, we were forced to change our strategy to keep up. Following the fluctuations in iron and metal prices was like trying to ride a rodeo horse,” says Mattias Malmer, CEO and co-owner of the family company Järnmalmer. Here at our own facility in Utby, on the border between Gothenburg and Partille, approximately 25,000 tons of industrial scrap are sorted and recycled per years from companies and public activities. In addition, the company buys and sells through its trading organization an additional approximately 175,000 tonnes per year. Järnmalmer was recently approved as one of ten plant suppliers to the largest steel mills in Sweden. Other customers for Järnmalmer are, for example. Hyundai Steel and SSAB Europe. Russia’s war of aggression against Ukraine sent metal prices soaring to record highs in a short time. Steel prices were also dragged upwards. “My father Pelle Malmer ran the company for forty years with the strategy of having a strong cash register, buying stock and selling when it is most favorable, and that is how I have continued. But this spring, for the first time, we had to change strategy and be restrained with stock build-up, because no one wanted to sit with Svarte Petter when the whole sea was storming,” says Mattias Malmer. Since then, among other things, interest rate increases to combat high inflation have reduced demand and slowed the economy. Metal prices have fallen back to more normal levels.Because Iron Ore has the outbreak of war had greater negative consequences than the pandemic. Long-standing supplier and customer relationships with connections to Russia were severed overnight. “During the pandemic, it became more sluggish due to shipping chaos but cross-border trade continued so volumes increased for us. But on February 24 this year, when the war broke out, we ceased to operate in both Russia and Ukraine, collaborations we had had for decades. Everything just feels sad and like a big waste.” This means that volumes and turnover decreased for the financial year that ended last June this year. On the other hand, spring metal prices mean that you can report a record result.”It would have been nice to reach a billion in turnover within ten years, but the most important thing is that the business is healthy and people like working here, so for me personally it is more important that we show good results and that’s why it’s fun to be able to report the company’s best results ever,” he says.Already in 1950 started grandfather Torbjörn Malmer scrap dealer in a neighborhood on Södermalm in Stockholm to support the family. But the moving load went to Gothenburg quite soon. The first generational change took place in 1971 when father Per “Pelle” Malmer took over. The second generation shift got off to a quick and dramatic start when Per Malmer suffered a heart attack in 2002 and was sedated for a month. Mattias Malmer had just finished his studies at the Gothenburg School of Economics. Thankfully, I had grown up with the company and on leave learned everything from scratch when it comes to sorting metals, driving magnetic cranes, wheel loaders and trucks,” says Mattias Malmer.Per Malmer recovered himself and worked another ten years in the company before leaving the operational business. “It was a successful generational change where we worked side by side for ten years and he gave me the freedom to run the company in my own way while he focused on production. Under his leadership, production and the logistics chain were developed. He also built our international relationships, which are the basis for our export trade to this day.” Mattias Malmer studied marketing himself. “I have focused on developing the brand, our offer to customers and the markets because production and the supply chain are in place. So for the good of the company we came in the right order, the other way around wouldn’t have worked.”He believes that the key to the success of Järnmalmer is customer relationships that have lasted for decades.”Recently I received the nicest compliment from an old customer. He said that I am so similar to my grandfather Torbjörn, who passed away before I was born. It shows the long-term nature of our relationships with customers and suppliers, which has made us exist for 72 years.”Unlike in grandfather’s days, the scrap industry has now entered the business world as an important part of the circular economy and the search for reduced carbon dioxide emissions and fossil-free recycling of steel and metals. At Järnmalmer, the heart of the business since 2018 has been an electric scrap shear that can handle 300 tons of scrap metal per day. It is one of the company’s largest investments to date at SEK 25 million. “The ambition is that in the future the electricity will come from the solar cell park that is next door to us.”Environmental and climate issues are so important to Mattias Malmer that three years ago the company was awarded for its innovative thinking in a traditional industry at the Recycling Gala. The reason is that Järnmalmer, together with Chalmers Teknologkonsulter, has created a digital platform for calculating customers’ carbon dioxide emissions during the recycling process and offers the opportunity to compensate for the climate.”The customer can also see how much carbon dioxide emissions are saved by recycling their industrial scrap in comparison to using virgin raw materials such as ore . Economy and the environment must go hand in hand,” says Mattias Malmer. Now they have gone a step further and are launching a digital on-demand system for emptying recycling containers on a broad front. “Swipe for zero is a type of transmitter developed by Bintel which placed on a container. When it is filled, the customer can have it picked up and emptied by us at the push of a button, and the carbon dioxide emissions automatically climate-compensated.” Someone suggested that they would corporatize Järnmalmer’s digital platform, but Mattias Malmer does not want that.”It is not relevant for the simple reason that it is better for the environment and the climate if more people use this type of calculation in their own operations, and in that way circles are spread on the water,” says Mattias Malmer.

Iron ores Group

Owners: Per “Pelle” Malmer, Mattias Malmer and Marie-Louise Malmer. Turnover June 2021: SEK 899 million. Profit after net finance: SEK 35 M. Turnover forecast June 2022: SEK 803 M. Profit after net finance (forecast): SEK 44 M. Employees: 20. Other: Subsidiary in Espoo Finland for international trading of iron and metal scrap.

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