An investment of the Roc Partners-managed Victorian Business Growth Fund is in voluntary administration.

In January, administrators Wexted Advisors sought expressions of interest for inner-west Melbourne-based Pacific Metal Group, one of the largest collectors, processors and suppliers of recycled metal in Victoria. The closing date for the expressions of interest was set as 25 January.

Pacific Metal Group (PMG) operates from leased recycling plants at Laverton and Pakenham and is believed to employ around 40 people.

The business provides bins and services to collect scrap metal directly from manufacturing and fabricating businesses, accepts direct deliveries and offers car removal services.

An undisclosed sum was invested from the Victorian Business Growth fund in PMG in mid-2022 to begin a planned roll-up of metals recycling businesses. The investment enabled PMG to acquire long-established family-owned Cougar Recycling & Port Melbourne Metals.

At the time of the investment, PMG was owned by Jason and Mark Whitaker. Jason Whitaker had previously been an executive of international scrap metal company Sims Limited (ASX: SGM). Jason Whitaker’s more than 16 years with Sims included more than nine years as general manager for NSW and ACT.

After leaving Sims in 2013, Jason Whitaker in three years transformed Sydney company Access Recycling from a regional player to one of Australia’s largest independent processors and exporters of scrap steel. Over the period 2013-2016, annual revenue increased from $14 million to $40 million. The business was then sold to Sims.

Sims is the biggest scrap metal business in Australia with about 30% market share while, when the Victorian Business Growth Fund invested, PMG had about 2%. The remainder of the market is made up by other small players.

Use of recycled steel, alongside iron ore, can reduce heavy carbon emissions in steelmaking. This is expected to increase prices obtainable for scrap steel. There are, however, limits to the amounts of recycled material that can be used in conventional steel making.

The $250 million Victorian Business Growth Fund was set up in 2020 with $50 million from the Victorian state government and a $200 million commitment from First State Super which, after a merger with VicSuper, is now Aware Super.

The first investment from the fund was in Warragul, Victoria, tomato producer Flavorite in 2020.

In 2022, the fund took a stake in Steel Mains, a long-established engineering company based in Somerton, northern Melbourne. Steel Mains is Australia’s leading manufacturer of steel pressure pipelines and fittings.

Image: Pacific Metal Group recycles scrap steel.