Philip Continues its Consolidation Program in the UK with the Acquisition of Two Metals Recycling Companies and the Rights to a New EAF Dust Recycling Technology.

TORONTO--(BUSINESS WIRE)--Aug. 21, 1997--Philip Services Corp(TSE, ME, NYSE PHV.) Philip Services Corp. ("Philip") announced today that its wholly-owned subsidiary Philip Services (Europe) Limited ("Philip Europe") has entered into agreements to acquire rights to an innovative electric arc furnace ("EAF") dust recycling technology and build and operate a recycling facility in Cardiff, Wales. Philip Europe has also completed the acquisition of two UK-based metals recycling companies, BM Metals Recycling Ltd. ("BM Metals") and E. Pearse (Holdings) Limited ("Pearse").

EAF Technology: Philip has reached an agreement with ASW Holdings Plc ("ASW") to design, build and operate, for a period of five years, an EAF dust recycling facility in Cardiff using a process developed by Metal Reduction Processing Ltd. ("MRP"). Philip Europe presently supplies scrap and outsourcing services to ASW, a large European steel manufacturer. MRP's proprietary technology uses rotary kilns to selectively recover zinc, iron and other constituents of EAF dust for re-use.

The Cardiff facility, which will generate an estimated US $5 million in annual revenue and have an annual processing capacity of 20,000 metric tonnes of EAF dust, will be operational by December 1997. Philip Europe and ASW will equally own the facility. Philip has also been granted the exclusive rights for the MRP process in North and South America and has agreed to acquire a one-third interest in the remaining rights for the technology worldwide.

"We are pleased with this transaction and with the association with Philip," said Alain Soulas, Chief Executive of ASW. "The Cardiff facility brings to commercialisation the MRP technology, which ASW has been involved in for over two years, and will serve as a show piece for the technology," he added.

"Our commitment to EAF dust management and recycling is strong," said Allen Fracassi, President and Chief Executive Officer of Philip. "The development of the ZIPP technology for the recycling of EAF dust and the production of pig iron, combined with the acquisition of the rights to the MRP process, offer our clients viable alternatives for EAF dust management. While certain aspects of the two technologies will be merged, the MRP process is fundamentally different from ZIPP in terms of technology, size and end products generated. By acquiring the rights to MRP's process, Philip can now offer its extensive mini-mill client base two options to recover value from their EAF dust."

UK Metals Acquisitions: Philip Europe has acquired BM Metals of Cinderford and Pearse of Exeter in the United Kingdom. "These acquisitions are designed to solidify Philip's position in Wales and the southwest of England and increase the volume of material processed by Philip" said Allen Fracassi. "We are targetting well established businesses as part of our strategy of growth in the UK" continued Mr. Fracassi.

The BM Metals and Pearse acquisitions, with annual revenue of US $11 million will add seven facilities to Philip's network of twelve operations in Wales and southwest of England (formerly known as Allied Metals Limited). "With the addition of a fifth shredder, a collection network and a strong non-ferrous component, these businesses will integrate well with Philip's UK metals activities", added Mr. Fracassi.

Philip Services Corp. is a fully integrated resource recovery and industrial services company providing steel, copper and aluminum processing and recovery services, together with diversified industrial outsourcing services to all major sectors. Philip trades on the New York, Toronto and Montreal Stock Exchanges under the symbol "PHV".

CONTACT: Philip Services Corp.

Allen Fracassi, 905/ 521 1600

or

Philip Services (Europe) Ltd.

Ayman Gabarin, + 44 (0) 171 518 0950