Can you give us a brief history of your company and your operations?
Hilco Industrial (www.HilcoHIA.com) is part of Hilco Global, an independent financial services company and the world’s premier authority on asset valuation, monetization and advisory solutions. Hilco Industrial is a buyer of large industrial factories, which are closed due to bankruptcy or due to reorganizations by the parent company. Hilco purchases factories (and from time to time works as an agent for the seller) in the steel and non-ferrous, automotive, aerospace, energy, fabrication and shipbuilding industries and sells the machinery worldwide. Hilco has offices and operations on five continents.
What is your strategy in asset acquisition? How do you decide which assets to buy?
This often depends on the sellers – whether they want to sell or do they want to appoint us to sell on their behalf. We approach companies that are closing their factories. First we will inspect the assets and, if these are of interest to buyers, we start the negotiations with the seller to buy his assets. Sometimes we will act as the agent for the seller. The assets need to be valuable and not too old, otherwise our buyers do not want to buy them.
What is your geographical coverage?
We actively buy on five continents. North America, Europe and Asia in the last few years due to overcapacity are the main markets, but we also buy in South America (we just purchased a food plant from Unilever in Brazil) and Australia (we liquidated most of the automotive plants when three car plants decided to close down in 2016 to 2018). We sell all over the world.
As a company that works with the steel industry, can you tell us how the current situation in the industry affects your business?
The overcapacity in the steel industry creates opportunities for us, especially in Asia where many late-model assets are being sold. Of course, the sale of these assets is more difficult than in good times. However, there are many companies around the world that want to upgrade their production facilities with modern used equipment at prices which are a fraction of the new cost.
Can you tell us about the acquisition of the Danieli rebar mill from POSCO? Do you have any interested parties?
POSCO SS Vina was in the process of a reorganization and decided to sell a 49 percent stake to Yamato Kogyo Group. They decided to cease the production of rebar and needed to sell their rebar rolling mill prior to selling the 49 percent stake. POSCO contacted Hilco and we agreed to purchase the 2015-500,000 mt per year Danieli rebar rolling mill (https://www.hilcoind.com/sale/poscossvina/featured). This was a unique opportunity for us. It does not happen often that a four to five year old rebar mill becomes available. This is the reason why we have many interested parties. Unfortunately, the coronavirus has delayed the inspections, but we hope to show this beautiful rebar mill to these interested parties. Every week another party shows interest.
Apart from the steel industry, what other industries are you interested in operating in?
Any final comments?
We now see that many companies in Asia need our services to sell their production equipment to other parts of the world. This is the reason we are expanding in Asia. Furthermore, we notice that many companies, who never dreamed of buying used equipment in the past, are now starting to buy used equipment, but it must be recent and in good condition. Used equipment does represent a tremendous saving over new equipment.