Ramping up for Reuse

The Weekly Report – April 8, 2024
Spectro Alloys is adding new technology, more capacity, and dozens of employees to its growing aluminum recycling operation.

In late March, we joined a large crowd that included Gov. Tim Walz and Rosemount Mayor Jeff Weisensel to commemorate the groundbreaking of Spectro Alloys’ new 90,000 square foot, $71 million addition in Rosemount. Companies like Spectro illustrate the finest attributes of manufacturing in Minnesota, and we always appreciate when policymakers recognize their value to communities.

A family-owned, multi-generational company, Spectro has consistently invested in technology to position itself as a market leader. Its nearly 150-person workforce will grow by 50 employees when the new facility is up and running in 2025 as Spectro ventures into a rapidly expanding segment of the aluminum recycling market.

In an outstanding profile of Spectro in the latest issue of Enterprise Minnesota® magazine, writer Suzy Frisch captures how the company is laying the groundwork for growth. Spectro began in 1973 as a small scrapyard that melted aluminum for reuse. Greg Palen pulled together investors and bought the company in 1989 and began upgrading the company’s technology to boost efficiency, automation, and pollution control.

Over the years, Spectro improved the quality of its aluminum and undertook certification in standards, including ISO (International Standards Organization) 9001 as well as ISO 14001 for environmental management and ISO 45001 for occupational health and safety. Spectro’s earliest customers included job shops and manufacturers with inconsistent needs for its casting alloys. In the 1990s and 2000s, Spectro grew its business with OEM (Original Equipment Manufacturer) and tier 1 suppliers that signed annual contracts and generated more predictable and steady demand.

Spectro has weathered ups and downs through the years by improving its processes and products. The trend of outsourcing manufacturing to low-cost countries in the 2000s resulted in some tough years for Spectro, says Luke Palen, president of the company and Greg’s son. Some of Spectro’s competitors went through bankruptcy, but Spectro stayed afloat and improved its sorting technology and pollution control while shifting focus to domestic manufacturing customers.

Spectro’s new expansion resulted from concerns that surfaced about five years ago as the electrical vehicle market was picking up steam. At the time, EVs were designed to use a lot less aluminum than internal combustion engine cars. Spectro leaders thought the EV trend could cut into the company’s core business of supplying aluminum to the automotive market, so they explored other areas, including recycling post-consumer aluminum such as pop cans.

It turns out EV design ultimately included even more cast aluminum than traditional cars, but the company decided an expansion of its recycling capabilities was too good to pass up. The new plant will be the first of its kind in Minnesota, and it will help the company meet growing demand for green building materials and sustainable products.

In addition to allowing Spectro to tap new markets and diversify its customer base, the new facility will provide additional opportunities for current employees. “We pride ourselves on promoting from within,” Luke Palen says. “Through the expansion there will be a lot of opportunity for existing employees to expand their careers and grow into something new.”

Read the full story of Spectro Alloys in the latest issue of Enterprise Minnesota® magazine here.

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