March/April 1995
This California company has established itself as a significant player in the ferrous scrap recycling and exporting business. And with the opening of its new headquarters port facility, the firm is expecting even greater success in the future.
By Kent Kiser
Kent Kiser is associate editor of Scrap Processing and Recycling.
By all accounts, it was a great party. The date was Oct. 22, 1994. The occasion was the dedication of Hiuka America Corp's new ferrous scrap processing and ship loading facility at Pier T, Berth 118, in the Port of Long Beach, Calif.
A huge tent was pitched in the middle of the plant's 20-acre expanse of clean concrete. The red carpet was rolled out (literally) for the black-tie event. There was gourmet food, an oldies band, a Japanese Taiko drum performance, and fireworks to satiate and entertain the estimated 600 Hiuka suppliers and consumers attending 'the event. Some came from as far away as Korea and Taiwan.
This gala was the capper on two years of site planning and construction, a nod to the years prior to that of waiting for a berth to become available, and a heady hooray for securing a 25-year lease on the site.
But the party was more than that. To President Katsuyuki Wakita, it was the realization of a dream to build what he calls "an export facility for the 21st century." The event was, in essence, a toast to Hiuka's future. As Deanne Wood, manager of personnel and general affairs--and organizer of the event--puts it, "The party was a Hiuka-is-here-for-the-long-term message to our customers."
Becoming a Real Player
Hiuka America--which focuses on processing and exporting ferrous scrap, primarily to the Pacific Rim--has existed in name since 1982, but its origins trace back to the mid-1950s, when Hiuka Sangyo Co. Ltd.--a Tokyo-based Japanese trading company that supplies raw materials and equipment to Japanese steel mills--opened a liaison office in San Francisco "for the exchange of steel scrap market information."
In 1977, this office was incorporated as Harbor Trading Co., which began brokering scrap for export, while also managing Hiuka Sangyo's U.S. land investments. And in 1982, Harbor Trading was renamed Hiuka America Corp., its ownership and management were restructured, and its offices were relocated to Los Angeles, where it began trading in steel scrap cargoes.
Hiuka opened its first processing facility in 1985 on a leased parcel in San Pedro, a suburb adjacent to the ports of Los Angeles and Long Beach. Over the years, the firm has expanded, primarily through acquisitions, to the point where it currently has six subsidiary processing plants--four in the Los Angeles metro area, one in Bakersfield, and one in San Diego --as well as a mobile dismantling company. (For a listing of these companies, see "The Hiuka Team" below.)
Thanks to these expansions, Hiuka has become "a real player in a very short time," says Les Krohnfeldt, executive vice president--and the numbers support his assertion. The company's annual ferrous export volume has steadily grown since it began processing material in 1985, reaching 700,000 tons last year--one of the largest quantities of ferrous scrap shipped from a single U.S. facility, according to Krohnfeldt. Put another way, this 1994 total gives Hiuka about a 28-percent share of the estimated 2.5 million tons of ferrous scrap reported to have been generated in Southern California during the year. And with its move to Berth 118, the company confidently expects to expand both its annual export tonnage as well as its market share in the future.
Building a Dream Plant
Before moving to its Berth 118 headquarters, Hiuka had a problem. From its San Pedro processing plant, it faced the unsavory task of having to truck its processed scrap the short distance to its previous berths in the ports of Los Angeles and Long Beach. This put Hiuka at a disadvantage to every West Coast scrap exporter with a portside processing facility--hardly an ideal situation. As Krohnfeldt observes, "To export steel scrap profitably, it's essential to have your own port facility. Every foot farther away from the dock you get, your cost increases."
Thank goodness, then, for Berth 118. "Now everything is consolidated, everything is right here," says Terry Sanders, general manager of port operations. This means the firm can have scrap delivered, processed, and stockpiled right at the port. No more short truck runs to and from San Pedro. Lower handling costs. A scrap recycler's dream. "Our move has cut a lot of expense," Sanders says with understatement.
Yet cutting costs was only part of Hiuka's motivation for moving to Berth 118. From the start, the company's master vision was to secure a portside processing site and make it "a facility with the most modern and advanced technology in the world," Wakita says. And unlike most scrap recycling firms, Hiuka had the rare opportunity to start with virtually a blank canvas on which to create the plant of its dreams. As Krohnfeldt asserts, "Berth 118 is what all recyclers would do if they were capable or had the chance to do it."
The company also wanted its dream plant to be a model of efficiency, of course, offering "the industry's most-expedient receiving, handling, and delivery procedures," Wakita notes. And so, to that end, Hiuka designed the facility so that huge tonnages of processed scrap can be stockpiled by grade within 150 feet of the wharf--a distance that corresponds to the maximum backreach of its huge ship loading crane. “By getting all of our material stockpiled in that range, we have no double handling during ship loading,” Krohnfeldt explains.
In addition, the facility features four two-way truck scales said to be capable of handling 150 truck movements per hour. The two-way setup allows trucks to enter and exit wherever there’s an open lane, which expedites traffic flow in and out of the operation.
Hiuka’s new home also has two 1,000-foot rail spurs that can accommodate 30 railcars. And an on-site electrical substation give the firm reliable, reduced-cost power for its operations, Krohnfeldt points out. The purpose behind these and other efficiency-related features is simply, he says: to “increase our throughput while continually decreasing our costs.”
An Environmental Enterprise
Another if Hiuka’s visions was to make Berth118 an environmental masterpiece, a scrap operation with environmental controls typically found in petrochemical plants, and the company built it just that way. As an example, every inch of Berth118’s operating surface is covered in 12 inches of concrete—13,300 cubic yards in all—atop a 60-millimeter impermeable geomembrane liner. The surface slopes away from the wharf, which means all storm water is gravity-fed into a drainage area, then piped into a water reclamation system. This system features 250,000-gallon holding tanks and oil/water separators, which cleanse the collected water to make it fit for use in dust control. "These features make this a totally self-contained, zero-runoff facility," Krohnfeldt boasts.
Among its other environmental attributes, the facility is surrounded by a 30- foot-tall steel wall that looks like an attractively landscaped building facade from the outside. The wall's purpose is not only to improve the plant's aesthetics, but also to serve as a barrier, diminishing noise and dust emanating from the facility. The goal, Wakita notes, is to achieve "harmony between the environment and enterprise."
While Berth 118 is Hiuka's environmental showcase, all of its subsidiary operations are equally environmentally conscious. As Wakita points out, the company wants to be "sensitive to reducing all pollution from every one of its operations, whether it be to the earth or to the quality of our air, and it strives to avoid creating traffic congestion or other dangerous and disruptive influences on the communities in which it operates."
One reason behind this conscientious approach is that environmental compliance has become a top customer service issue, a means to the end of offering customers peace of mind, according to the company's principals. "Scrap suppliers and consumers have environmental expectations," Krohnfeldt remarks. "They don't want to become a potentially responsible party. So environmental soundness is definitely something they look at."
And ultimately, he adds, environmental compliance is a prerequisite for survival in today's scrap recycling business. "To be around for the long haul, you have to be at the front end of environmental issues or you're going to end up out of business," Krohnfeldt explains. "You can't be planning today for tomorrow. You have to be planning where you'll be five years from now."
A Corporate Melting Pot
If you walk around Hiuka's office and plant, you can't help but notice its multicultural character. Listen and you'll hear a variety of languages being spoken--Japanese, English, Spanish, and more. Look and you'll see employees of diverse race. Even the names on the firm's reserved parking signs reflect the varied backgrounds of its executives. As Krohnfeldt notes, "We're an American corporation made up of all nationalities." And the firm's logo, which resembles the Oriental yin-and-yang symbol drawn in American flag red-and-white stripes, indeed suggests a coming together of disparate elements to make a unified whole.
With this multicultural mix, it’s easy to see why Hiuka’s principals resist having the firm pigeonholed as a “Japanese company.” That, in fact, is a sensitive subject to Wakita, who asserts, “While it is true that our ownership is Japanese, it is here in the United States that we have made our commitment and our investment. It is here where our future lies. It is for that reason that we chose America as our middle name.”
Hiuka’s corporate culture—which can be described as a blend of Eastern and Western approaches—can perhaps best be seen in its relationship with its 250 employees. According to Krohnfeldt, the firm “is run with the Japanese commitment to the business family.” This manifests itself through Hiuka’s generous benefit programs, which make employees feel as if they’re part of the corporate family,” Wood says. “The philosophy is that all employees are our family members. And our benefits are designed to take care of people.”
And take care of people Hiuka does. The company, for instance, provides 100-percent paid medical premiums for employees and their families; a 401(k) pension plan to which it makes a contribution based on its annual shipment tonnage; an annual cost-of-living wage increase; annual wage bonuses; grocery gift certificates at holidays; and two “fun” events—a summer picnic and a winter holiday party. These gatherings, which draw more than 900 employees and their families, are designed to “bring everyone together at least twice a year,” Wood says.
Hiuka’s benefit programs have done more than simply enable it to create what Krohnfeldt calls an “adoptive family environment.” They have enabled the company to “recruit quality people for the long term,” Wood notes. “We want people to come to Hiuka expecting to work hard and be rewarded for it. So we try to give them the basis for that, and then we expect hard work and loyalty in return.”
Thus far, this approach has been working fabulously, she says, in that Hiuka’s employees generally stick with the company. The reason is simple: “We feel part of something. We feel appreciated—that it would matter if we weren’t here.”
Planning for the Future
When Hiuka signed its 25-year lease for Berth 118, it had a vision for all 25 years, Krohnfeldt asserts. That’s not surprising because Hiuka is one company that believes in planning, setting goals, and charting its future course. “To be successful today,” he says, “you’ve got to be looking 5, 10, 15 years ahead and be willing to make necessary investments.”
Berth 118 represents Hiuka’s biggest investment in its future, of course, but the firm—which is in “growth mode,” as Krohnfeldt puts it—has other plans and goals on its drawing board. For one, it is well on its way to establishing its eighth scrap operation, in Pico Rivera, Calif., which will feature a Newell megashredder. This facility, when operational, will help Hiuka meet its goal of exporting 1 million tons annually—a level it hopes to achieve by the turn of the century.
Ambitious? Yes, but Hiuka’s location and world steel fundamentals appear to justify such optimism. At its Berth 118 home, Krohnfeldt notes, Hiuka is virtually at the center of it all. Not only is Long Beach the largest single container port in the United States, but the port also falls within the Alameda corridor, which is targeted to become one of the most advanced transportation areas in the world, featuring an upgraded rail system, new truck routes, and joint-use agreements among rail companies.
And regarding the world steel market, Hiula’s principals see nothing but continued steel growth in the Pacific Rim , its primary consuming market. “For the foreseeable future,” Krohnfeldt says, “it appears as if demand will continue to exceed supply.” Sanders goes so far as to assert, “I believe we’re going to see good business for the next few decades.”
Whether or not these prognostications pan out, Hiuka’s ultimate goal is “to continually grow this organization to meet the needs of our customers,” Krohnfeldt notes, adding, “What else is there?” And with a nod toward a drawing of the Berth 118 layout hanging in the company’s conference room, he states, “We believe that we’ve set ourselves up for the future, and we’re going to work very hard to be a leader in the future.
This California company has established itself as a significant player in the ferrous scrap recycling and exporting business. And with the opening of its new headquarters port facility, the firm is expecting even greater success in the future.