Emirates Global Aluminium (EGA), the largest industrial company in the United Arab Emirates outside oil and gas and the biggest ‘premium aluminium’ producer in the world, announced its intention to acquire a majority stake in American aluminium recycling firm Spectro Alloys. The acquisition, which is subject to obtaining regulatory approvals, will accelerate EGA’s global expansion into aluminium recycling and expand EGA’s business in the United States. 

Spectro Alloys is a leading recycled aluminium alloy producer in the United States, founded in 1973, and based in Rosemount, Minnesota. The company has an annual production capacity of 240 million pounds per year of aluminium foundry alloys. Aluminium recycling at Spectro generates more than 95% in CO2 and energy savings compared to creating new aluminium. Spectro’s direct CO2 savings is equivalent to removing more than 80,000 cars from the road, and Spectro’s direct energy savings could power more than 200,000 homes.

Earlier this year, Spectro broke ground on a $71 million recycling expansion project that will result in nearly 120 million pounds per year of additional recycling capacity and create up to 50 new full-time jobs. The first phase of this project will be completed in 2025.

EGA intends to acquire 80 percent of Spectro Alloys. The current owner-managers will retain a 20 percent shareholding. EGA and Spectro have signed an equity purchase agreement and the transaction is expected to close during the third quarter of 2024.

“Our goal is to grow further in both primary and recycled aluminium to meet the growing global demand for a metal which is essential for our world’s sustainable future,” said Abdulnasser Bin Kalban, CEO of EGA. “In the United States, which is already one of EGA’s largest global markets, this acquisition will significantly grow our business and expand our offering to customers with our domestic production. Spectro Alloys has a strong and highly experienced team which is already implementing ambitious expansion plans and will be a strong platform for the further development of an EGA recycling business in the United States. I look forward to working with Spectro Alloys’ team.”

“We have grown Spectro Alloys over the last five decades into one of the United States’ top aluminium recycling companies,” said Luke Palen, president of Spectro Alloys. “By becoming part of EGA, we will unlock the next stage of our development in the fast-growing aluminium recycling industry. In the near term, this will allow us to accelerate our ongoing expansion project. In the long term, this is a big win for the future of aluminium recycling in the United States.”

The United States currently consumes about 4.9 million metric tons of recycled aluminium annually, accounting for half of all aluminium demand in the country and making the United States the second largest recycled aluminium market in the world. Demand for recycled aluminium in the United States is expected to reach about 7.6 million metric tons per year by 2033. EGA sold approximately 550 thousand metric tons of primary aluminium in the United States in 2023.

Spectro Alloys currently supplies more than 125 customers, primarily in the Upper Midwest and Texas. Almost half of Spectro’s production is used in the automotive sector. The company sells to semi-fabricators, who in turn supply blue-chip end-user companies. Other important sectors for Spectro include small engine manufacturing, construction, and recreational vehicles.

Spectro sources aluminium scrap from more than 250 scrap suppliers in the region and uses advanced sorting and analysis technology to produce the wide variety of alloys required by the company’s customers. Market analysts expect global demand for recycled aluminium to double by 2040. Recycled aluminium is expected to account for around 60 percent of the growth in global aluminium supply between now and 2030, and around 70 perent of supply growth between 2030 and 2040.