May/June 1995
This equipment manufacturer is spreading Italian technology around the world and stands to cover even more of the globe thanks to today’s minimill boom.
By Jeff Borsecnik
Jeff Borsecnik is an associate editor of Scrap Processing and Recycling
"In a way, we've been a bit of a secret company," says Norman Coop, managing director of the U.K. branch of Vezzani S.p.A., a shear and baler maker based in Ovada, Italy.
And, indeed, Vezzani is relatively unknown in North America , even though it now has about 15 large shears and a few balers in the United States and several machines inMexico . But the manufacturer is certainly no secret at home in Italy, where it can boast of "200 or 300" installations and integral partnerships with leading Italian manufacturers, especially steelmakers and some of the world's most sophisticated steelmaking equipment producers. It's also made a name for itself in other pockets of the world, placing scrap processing equipment in steelworks throughout Asia and some of Europe.
Back on this side of the Atlantic, however, Vezzani lives up to Coop's "secret" assessment, which he attributes to the fact that Italy is not usually thought of as a primary source of processing machinery. In fact, even Coop, who has had a long career in the baler and shear business, says he was skeptical at first. "I admit I never saw Italy as a nation of engineers. It's a big surprise when you visit Northern Italy and find some of the finest manufacturing in the world—heavy equipment, machinery of all types. It's a big culture shock to non-Italians."
Thus, the parochial potential customer living in North America may view Italian equipment with suspicion at first. "He's only interested if he thinks it's going to be cheap because he sees the Italians as flexible," says Coop. "But he gets a big shock if we can persuade him to go to Italy , to drive through Milan and the northern cities and see the steelworks, see our factory. This convinces him we are the right people." Mike Pass, who manages the Vezzani line for Al-jon Inc., the company's U.S. representative, echoes the thought: "We have never in my experience lost business when a customer has gone to Italy to see the factory—and the countryside."
The Gravity Freebie
Vezzani splashed into the U.S. market in 1984 with the sale of a new type of continuously operating guillotine shear to David J. Joseph Co. (Cincinnati), whose prominence was an added boost to the equipment maker.
The machine that broke the ice, the Vezzani PC/AC shear, inclines 30 degrees downward toward the blade, allowing gravity to feed it. Like other guillotine shears, this patented design precompresses the scrap, but it does so in a gradual, continuous process rather than by the batch. As the scrap slides diagonally toward the blade, it is compressed by an oscillating side wall that is hinged to a side ram located in front of the clamp and knife. Each time the side ram is activated—about five or six times a minute—the wall moves with it, narrowing the passage toward the blade and pressing the loose scrap together as it nears the cutting throat. The scrap slides through the blade opening until it is halted by a closed door that acts as the rear wall of the cutting chamber and determines the length of the sheared material. A clamp positioned in front of the blade then provides vertical compression, and the blade makes the cut. Finally, the door opens, allowing the cut scrap to fall free, before the clamp and knife return to the open position for the next bite.
Because the shear does not create a bale or "log" before beginning the cutting cycle, the cutting and feeding operations are continuous and simultaneous, with neither operation delayed by the other. Vezzani says this design offers two main advantages: First, only three rams drive the entire operation—the use of gravity eliminates the need for a horizontal feeding ram and the side compression ram does double duty thanks to the hinged side wall—simplifying the design and reportedly cutting energy consumption as well as maintenance costs. Second, no operator is required for the shear, which just keeps cutting away.
Pass says his immediate thought on first seeing the Vezzani shear at David J. Joseph Co. was "Why hasn't someone thought of this already?" After all, he notes, automobile shredders have been using gravity since their inception. "It just makes sense," he adds, "Vezzani takes gravity and converts it to other energy."
The result? A machine Pass calls "uniquely simple and economical to maintain, basically because it has fewer moving parts." The Vezzani shear is also said to be able to process material of any length without precutting because the shear's feeding box is open on top and at the end.
From Pile to Furnace
Because the Vezzani shear operates continuously, it is often found as the centerpiece of an automatic high-volume scrap- pile-to-electric-furnace processing system (see rendering at right) in steel mills, an application that accounts for about a quarter of the company's installations worldwide and more than half of its income.
This reflects the Vezzani history as a laboratory for Italian steelmakers: The company, though established in the baling press business in the 1950s as a family firm, was absorbed by a large group of companies linked to Italian steel in the late 1960s. Vezzani soon found itself designing all sorts of equipment for the steelmakers, including shears. Some of the requests were demanding—like presses capable of making bales of an exact weight or as heavy as 40 tons—and these jobs sharpened the firm's engineering expertise, the company notes.
Vezzani's steelmaking connections also gave the company a passport abroad as its scrap processing equipment was often included in Italian steelmaking equipment exported to places like the Soviet Union. (Today, Commonwealth of Independent States countries have about 15 Vezzani shears, including one installation with four 1,200-ton machines.) Vezzani equipment is also helping make steel in such varied places as Algeria, Albania, and Argentina.
Its steelmaking ownership ended in 1988, when Vezzani was purchased from its parent steel group by a large Italian industrial conglomerate, Unione Manifatture. While this resulted in a rough period for the company when its parent suffered during the subsequent recession, just last year Vezzani and its subsidiaries were again purchased, this time by a healthy, privately held conglomerate of environmental companies called Vega S.r.1. (Venice).
A Challenging U.S. Market
Vezzani's current product line includes gravity-fed shears, vibratory-fed continuous-cutting shears, briquetting presses for bushy turnings, and large baling presses. In addition, a local subsidiary started by several Vezzani engineers, Comir, makes small balers and shears.
While all of these products are suitable for the U.S. steel recycling industry, marketing them here presents different challenges than it does in many other parts of the world, Coop says. Most notably, he says, is the fact that Vezzani's main market in much of the world is the steel industry, and most US . steelmakers, unlike their counterparts in other countries, haven't had to focus on preparing their own scrap. "U.S. steelmakers concentrate on making steel rather than processing scrap," he notes. "They have the advantage of being supplied by an aggressive, efficient processing industry." Thus, scrap processing equipment is not a major concern to these steelmakers.
By comparison, says Coop, ''If you are starting up a greenfield steelworks in Malaysia , your fist concern is where you are going to get raw material. You might see scrap lying all over the place, but you need to think how you are going to process it, get it into the charging basket" since no one is there to do the job for you.
So in the States, Vezzani faces a different market: independent scrap processors—rather than steelmakers—who look at a million dollar shear somewhat differently than, say, that new Malaysian minimill to whom such an investment is a small drop in the capital budget bucket.
Still, the United States is "the first market," says Vezzani's managing director, Paolo Merlo, explaining why he feels the company must make its mark here. Not only is it the world's biggest market, but US. customers "pay attention to the facts, the results. They evaluate very deeply the economic return on investments," says Merlo . "We are in the market to really be able to evaluate our product." In addition, he points out, the U.S. market is important to the company because it sets the trend and shows where other markets will eventually be headed.
Vezzani has managed to make a dent in the U.S. market—30 to 40 percent of new large shear sales, estimates Pass-thanks to its innovative shear. Like David J. Joseph Co, and Tube City Inc. (King of Prussia, Pa.)—which uses Vezzani's largest U.S. shear, a 1,760-ton machine, to prepare scrap for US. Steel at Gary , Ind. Vezzani's American customers are the "top tier, top 200" scrap processors in the country, especially the "more curious processors, those who are willing to explore uniquely different philosophies or ideas," says Pass.
The Bottom Line Factor
If ever there were a time to make a bigger dent in the U.S. market—the entire world market for that matter—it's now, Coop believes, pointing out that ferrous scrap markets are good, the industry is making profits, and the global outlook for steel, and especially scrap, is positive. As he sums it up, "1995 seems to have all the ingredients of a year to invest in those traditional markets. We've got a renaissance going." To Vezzani, that means a chance to sell shears and other processing equipment to the mature, traditional markets—Europe and the United States—after a decade of focusing mainly on developing economies, especially in Southeast Asia and the Pacific Rim.
But there's a sticky wicket from the shear and press maker's perspective: "A legacy of equipment that won't break down—this is our problem," says Coop, explaining that, in addition to fail-safe construction, extensive use of replaceable parts has extended the potential life of heavy shears and balers. When originally asked how long this equipment would last, he says, "our standard reply was '10 years,' but we were wrong four times out." In fact, he notes that perhaps only 5 percent of this equipment has yet been scrapped.
Add to this issue that those older machines were far less expensive than today's versions. The company that bought a 500-ton shear in 1970 for $200,000 or $300,000, for instance, might be looking at $1 million to $1.5 million for today's fairly standard large shear, which is in the 800- to-1,000-ton range. The result is that the new shear, despite its attractions, may have a tough time displacing the still-operating, semi-antique model.
“The new machine is more efficient, but if you compare the fact that one produces 15 tons an hour and the other does 25 but the investment in the new one is $1 million and the value of the 1970 model may be $100,000, it's very difficult to make that $900,000 jump," says Coop.
And that rusty old shear out back is not the only competition for top-of-the-line equipment like Vezzani's inclined machine, says Coop, noting there's a trend in some quarters toward low-end machines built for a short-term payback. "Here's the dilemma: Someone who ran a shear for 25 years may have spent $150,000 on it in 1970. Now in 1995 he has to replace it, so he goes to the manufacturer and hears that today's price is $1 million or more. This completely blows him away since it's 10 times more than he originally paid and he's got $150,000 to $200,000 in his head."
So, says Coop, he may look for a cheaper alternative. "There's been a move to make a 500-ton shear that's less sophisticated, simpler, without bearings and liner plates, using multiple cylinders, not using guides or knife adjustment, to make a simple machine that lasts for five years and sells for $400,000."
Such equipment does appeal to some, says Coop. "Customers are saying to us, 'We can still travel from A to B in a Fiat just the same as in a Ferrari.' So we're continually trying to convince them to think in the longer term and invest in a quality product, because after five years, you can face big repair bills—and low residual value—with cheap equipment."
For those willing to consider the investment, Vezzani has tried to sweeten the pot with an improved version of its incline shear, which is shorter and wider in configuration and quicker and more frugal in operation, thanks to new variable displacement hydraulic pumps. (Two of the new shears have already been installed in the United States —at American Compressed Steel Inc. in Kansas City, Mo., and Reserve Iron & Metal in Chicago —and a third machine is also headed for the Midwest.)
Of course, a million-dollar equipment purchase is a big investment decision and one of a sort few processors have faced in the last 10 years, says Coop. "Buying shear or a shredder is usually the second biggest decision in [a processor's] life—after getting married. And the difference between the two is the shear is concreted in your yard for life as a kind of monument to your folly or wisdom."
But, given good market momentum and the positive prognosis for scrap-based steel in the long run, Coop feels some may be ready to make the decision. From an equipment maker's perspective, he says, “I think the coming months are going to be interesting.”
This equipment manufacturer is spreading Italian technology around the world and stands to cover even more of the globe thanks to today’s minimill boom.