July/August 1995
Castle Metal was forced to relocate its operations to another town due to a state highway project, but it managed to turn adversity to its advantage through careful planning, attention to customer needs, and a willingness to change.
Lynn R. Novelli
Lynn R. Novelli is a writer based in Russel, Ohio.
Moving a scrap recycling operation is no easy feat under the best of circumstances, but it’s especially difficult when you’re forced to move—and on a tight timetable.
Just ask Larry Fruman, president and chief executive officer of Castle Metal Co.
After operating for nearly 35 years from a plant in downtown Boston, his ferrous, nonferrous, and high-temp alloy recycling company was forced to move this spring. The state of Massachusetts exercised its power of eminent domain and purchased Castle Metal’s property to make way for a highway project, at a price set by the Massachusetts Highway Department (MHD).
The result? The firm’s former plant is built under tons of concrete, part of the speed lane of Interstate 93, and Castle Metal is adjusting to its new home base is Stoughton, a suburb 12 miles south of the city.
Despite the formidable challenges of relocating his company and some lingering disputes with the MHD, Larry Fruman smiles and asserts, “This has been a move for the best. It gave us the opportunity to build a proactive environmental scrap operation to our specifications. We have a larger plant—two and a half times the size of our old one—with room for expansion. We can serve our customers more efficiently, and our employees have better working conditions.”
Turning the move from a negative to a positive required a combination of careful planning, sensitivity to changing customer needs, and a good dose of hard work on the part of Fruman and the entire Castle Metal team. As a result, the 91-year-old company, started by Fruman's grandfather and now in its fourth generation, seems solidly positioned for growth in an increasingly competitive market.
Adjusting to the Idea
Castle Metal's principals--Larry Fruman, his sons Andrew and Jeffrey, and son-in-law Bruce Balder--had their first hint of the state's plans for their property in 1991. “Certain rumors were circulating,” recalls Fruman. “We started to see stories in the paper about plans for the expansion of the central artery [I-90 and 1-93] and the construction of a third harbor tunnel to Logan Airport. There was a lot of talk about acquiring property for the project.”
If the rumors had any basis in reality, Castle Metal would be one of a dozen or more businesses forced to move by the highway project.
Rumor coalesced into fact in March 1994. The state notified Castle Metal that its 2 acre yard would be purchased for the highway project and named the amount of compensation the company would receive. Effective immediately, the recycler was a tenant-at-will, meaning the state could evict it from the property with 30 days' notice. Although there were subsequent public hearings on the matter, they consisted mainly of MHD representatives explaining the importance of the project to disgruntled, displaced property owners.
Even though the notification wasn't a complete surprise, Fruman says he was “in shock, total disarray.” Still, realizing that a move was inevitable, Fruman and Balder, vice president, resolved to look ahead, not back, and use the opportunity to improve the business and enhance its strategic position.
The first step was to find a new site, so Balder began scouting property in Boston and surrounding suburbs. “We had three requirements,” he says. “The site had to have proximity to a major highway, be environmentally clean, and be large enough to store all material inside and allow our trucks and containers to move easily.”
After viewing 75 to 100 properties, Balder found a 5-acre location in Stoughton that fit the company's requirements. After the property passed an environmental site assessment, Castle Metal moved ahead with negotiations and purchased the property.
As the company began plotting the logistics of its move, however, it decided that it wanted to keep at least one foot in downtown Boston to service its contractor accounts, so it established a branch operation at a former ironworks plant located a mile from its former site. “It has worked out very well,” Fruman says about the division, which opened Nov. 1 under the management of Andrew Fruman, vice president. “It lets us maintain a presence in Boston , and the plumbers, electricians, and general contractors we do business with in the city still can deliver to us conveniently.”
Planning the Move
The long-expected eviction notice from the state arrived Dec. 1, informing Castle Metal that it was to vacate the premises by Jan. 1, 1995 . “There we were, faced with 30 days to figure out how to move 3 million pounds of metal, all our heavy equipment, and our complete operation without interrupting our business,” says Fruman. Fortunately, after several appeals, the state granted the company an extension until March 1.
Addressing the logistics of the physical move, Castle Metal first looked at what to do with its existing inventory. “The metal in inventory had to be prepared for the move in some orderly fashion that would prevent the ferrous from contaminating the nonferrous,” Fruman explains. This meant the firm's two Selco horizontal balers would have to remain in Boston until all of the material there was processed for moving.
The problem with this plan was that, according to Fruman, the firm's agreement with the state regarding moving expenses prevented it from transporting any prepared scrap off-site until the state gave the go-ahead. “If we moved any material before the state gave us the OK, we wouldn't be reimbursed for our expenses,” he says.
With Castle Metal trying to remain fully operational during the move, this situation naturally created material-flow problems between incoming and outgoing scrap loads. After reviewing their alternatives, Fruman and Balder decided that the best way to maintain and manage the flow of material was to receive all incoming scrap at the Stoughtonplant.
One small complication: As part of its environmental goals for the new location, the company had decided that no metal could be stored outside or on the ground at the site. But construction of a 15,000- square foot addition to the site's existing 35,000-square-foot building--which was to become the plant's processing and storage area--was only partially completed. The solution Castle Metal came to was to store all incoming metal in collection trailers at the new location. “And in the meantime,” Fruman recalls, “we hoped the market wouldn't fall apart.”
The Last Days
By this stage of the move, “everyone was starting to feel the stress of the situation,” Fruman says. “With our work force split between Boston and Stoughton , we were operating at half strength at both locations. Employees at the old location were working to move material. At the new site, we were in the middle of construction and trying to receive new material. We were all working seven days a week.
Among other unexpected headaches, the crew in Stoughton , digging a pit for one of the firm's upstroke balers, hit an underground stream. At that point, Balder jokes, “The bottled water business was starting to look pretty good.” Instead of swapping scrap for Perrier, however, the company solved the crisis by pumping out the seepage and installing the baler's foundation above the stream.
Beyond his concerns regarding the logistics and physical problems of the move, Fruman worried about the effect of Castle Metal’s move on its customers and business relationships. Early on, he decided that communication was key to maintaining customer confidence levels, as well as the firm’s credibility throughout the move. The company, therefore, informed its customers by letter of the impending move and followed the letter with reassurances that the move wouldn't interrupt its normal operations and pickup schedule. In addition, all of Castle Metal's employees worked to make sure the company's commitment to service was fulfilled. As a result, says Fruman, “Our customers felt very secure through the whole process.”
On Dec. 23, 1994 , the state finally gave Castle Metal the green light to start moving inventory from Boston to Stoughton . And on a cold day in mid-February the last truckload of metal from the Boston plant rolled into Stoughton location, which was chock full of trailers loaded with metal. By this time, the firm had relocated its two truck scales, forklifts, skidsteer loaders, and upstroke balers but its Selco balers were still at the old site.
To move these machines, Castle Metal hired a specialized rigging contractor that provided door-to-door service. The contractor's crews dismantled each of the balers and loaded the components in sequence on flatbed trucks for the 12-mile trek to Stoughton . At the new yard, they unloaded the pieces in sequence and reassembled each piece of equipment at its new, permanent location.
“That was a long, slow process,” says Fruman. “Some equipment was damaged during the move, which further delayed setup in Stoughton.” By the time the last of the heavy equipment was in position and operational, it was early April.
Enjoying the Benefits
With the last piece of the last baler in place, Castle Metal's move to Stoughton was officially complete. And though the move was difficult, Fruman and Balder agree in retrospect that it was an extremely positive transition for the company.
From being boxed in at its old Albany Street location, Castle Metal now has 5 acres on which to spread itself. “We're now at a site we can grow into,” notes Balder. “If we had to, we could build another 100,000-square-foot building here. We have that much room.”
At the Boston location, expansion wasn't seriously considered because the company lacked the space for more inventory and equipment. The prospects in Stoughton are just the reverse, Fruman says, noting, “At this location, we can more than double our capacity to process and move material. Our sales force is always seeking new customers, and now we have the space to accommodate planned growth.”
The move also gave Castle Metal the rare chance to design a new site with all of the environmental safeguards and features it wanted. “We developed a progressive environmental compliance program that we implemented immediately at the new facility,” explains Balder.
Among its features, this plan includes keeping all metal under roof from the time it enters the plant until it leaves. Castle Metal provides its customers with leak-proof containers to fill with scrap, then its fleet of trucks picks up the filled containers and transports them to the plant, where the material is received inside a building for processing and storage. “This is done to eliminate potential ground contamination and relieve our customers of concern over cradle-to-grave liability from environmental contamination,” Fruman explains.
Pivotal to the environmental plan was the installation of an underground 10,000- gallon, double-wall fiberglass holding tank. All water-soluble cutting oils from the firm's processing operations are collected in the tank, and scheduled to be pumped out at six-month intervals by a hazardous waste disposal contractor.
Undoubtedly, these additional environmental assurance measures add to Castle Metal's operating costs, Fruman admits, but the return will come in the form of added peace of mind for the company's customers. “By making these improvements and taking a proactive environmental stance, we can put our customers' minds at ease on environmental concerns. We believe we're one of the first scrap companies in the Northeast to make an environmental commitment on this scale.”
Beyond environmental considerations, Castle Metal's move enabled it to make physical improvements and efficiencies such as installing 11 receiving docks, allowing plenty of floor and office space, and linking the company's Boston and Stoughton plants as well as Fruman's Florida residence--by a computer network that enables the locations to communicate instantly.
The move has also had a favorable impact on the human side of the business, Fruman notes. At first, the situation seemed problematic: Many employees who formerly walked to their jobs when Castle Metal was downtown had no transportation to the Stoughton location. The solution: The company offers a complimentary shuttle service between the old and new sites. Employees who live near the former Boston plant can walk to a designated pickup spot, where they can catch the shuttle to Stoughton . “This way, we've been able to retain valuable employees who have been with us for some time,” he explains.
The company, in fact, didn't lose a single employee following the relocation, and Fruman believes Castle Metal's new plant is something of an antidote to turnover. “The working conditions are better here,” he says. “The building is new, we have more space, and things are a lot better in general for our employees.”
The only sore spot in the entire experience has been the company's relationship with the MHD, despite the department's assertion that it “worked as closely as possible with Castle Metal and their consultants during the entire relocation process.”
One point of contention involves Castle Metal's suit against the state requesting additional reimbursement for its Boston property. As of early June, the state hadn't offered additional compensation for the site.
Castle Metal also says the state hasn't reimbursed it for its moving expenses. According to an MHD spokesperson, the department is evaluating the company's relocation claim “to determine reimbursement based on actual and reasonable substantiated costs.” This assurance aside, Fruman remains skeptical: “Truthfully, I think I have a long battle ahead of me to collect what I feel should be reimbursed.”
These few clouds of dispute, however, don't dampen the company's enthusiasm about its new-and-improved home and the world of possibilities its recent move has opened up. “We had an opportunity few scrap companies ever get,” Fruman says, concluding, “We tried to seize the moment and make the most of it—carpe diem”
Castle Metal was forced to relocate its operations to another town due to a state highway project, but it managed to turn adversity to its advantage through careful planning, attention to customer needs, and a willingness to change.