NEW CASTLE —
The out-of-town buyer of Ferrotech has high hopes for the business that his firm bought at auction.
New York-based Upstate Shredding on Thursday purchased the former Ferrotech Corp. land and buildings at a bankruptcy auction conducted on the property, the former Pennsylvania Engineering Corp.
Upstate Shredding owner Adam Weitsman said $2.2 million was bid. Weitsman was one of five parties interested in the local scrap metal processing facility. Others included adjoining property owner Ellwood Quality Steel.
Ferrotech closed earlier this year due to financial and legal issues with its parent company’s lending institution. Both Ferromet of Medina, Ohio, and Ferrotech filed for Chapter 11 protection in federal bankruptcy court.
Weitsman said after the auction that he believes Ferrotech has potential.
“We expect to make this a thriving business, expanding the business 10- to 15-fold,” he said.
Purchasing the buildings and grounds, Weitsman anticipates investing $5 million to $6 million locally, tearing down the existing buildings, building a 3,000-square-foot office building and a 20,000- to 30-000-square-foot warehouse.
He also anticipates paving the area to reduce dust and dirt, replacing old equipment with new cranes and equipment, complying state and federal environmental standards and hiring 30 employees. He foresees those all will be local residents.
He said he expects to take possession of the property early in February and begin immediately to demolish the dilapidated existing buildings at the site.
“I was surprised, pleasantly surprised,” New Castle Mayor Anthony Mastrangelo said yesterday.
Although financially strapped, he said, the city has funds earmarked for economic development available to entice new businesses to come to the community.
“But we weren’t asked,” he said. “No one called us about this project to ask for any help from us.”
Mastrangelo said the business “is good for the community. We welcome them.”
Lawrence County Commissioner Steve Craig and Economic Development Corp. executive director Linda Nitch said Weitsman had not contacted local development agencies prior to acquiring the recycling facility.
Nitch said she is anxious to contact Weitsman to offer her agency’s assistance.
“He has said his is a profitable company and he hasn’t asked for any assistance, but we may be able to help him with clean-up efforts,” she said, adding, “If he’s creating new jobs, he is eligible for tax credits.”
Weitsman said he considered the local scrap processor for the past three or four months.
“I came up for the bankruptcy auction figuring that it would sell for $2 million to $2.5 million,” he said. “Our bid for $2.2 million is no bargain, but it is within the range we had anticipated.”
Upstate Shredding is a large, privately-held scrap metal processor. The firm and its sister company, Ben Weitsman & Son Inc., operate in 13 locations in New York and Pennsylvania, Weitsman said. He noted that the company was founded in 1938 by his grandfather.
The company, headquartered in Owego, N.Y., deals with scrap metals from old appliances to insulated wire, vehicles, machine shop trimmings, copper, brass, aluminum, stainless steel, zinc and magnesium. Products are exported around the United States and around the world.
(Email: nlowry@ncnewsonline.com)
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