Processing Italian Style

Ben Sacco’s discovery in Italy of what he considers an innovative processing machine resulted in improvements at his scrap plant, Sierra Iron and Metal, and the establishment of Sierra International Machinery, a full-line equipment dealership.

Sound like a typical problem? Ben thinks so. And he thinks many scrap processing operations his size or smaller respond by spending too much on a piece of equipment or by avoiding modernization of their operations and stunting their companies' growth.

But not Ben. He kept his eyes open for a machine that would meet his cost and output requirements and finally saw what he wanted. He was in Italy looking at equipment when he found the Idromec 4200 portable baler and the 380 shear/baler, the machines that subsequently drove the tin out of Ben's plant and drove him into the equipment-dealer business.

With the shear/baler Ben had the machine of his dreams-one that he says is affordable, efficient, and fast, due to a multidimensional design-and was happy with its effect on his processing operations. Becoming an equipment dealer didn't enter his mind, he says, until several processors came by the plant, were impressed by the shear/baler, and inquired about purchasing one. Ben, who owned the only Idromec in the United States (although the equipment line had been sold throughout Europe for more dm 20 years) told the manufacturers, who were not exporting at the time, of the American interest. They responded with a proposal: If Sierra could sell two machines a year, it would get the dealership. Reports Ben, "Now we've got 95 percent of [Idromec's] production."

The agreement, shaped in 1988, led to the establishment of Sierra International Machinery, with John Sacco, president, and Ben, chairman of the board. Ben won't say how many machines that 95 percent equates to. However, he does say that Sierra International Machinery has sold Idromecs across America--in every region, so far, except the Northwest--and is marketing more than can be manufactured right now--they are three months behind in production. According to Ben, the manufacturer is small and needs to weigh any expansion possibilities against tough Italian labor laws: laying off employees during any potential slow period in the future would be almost impossible without bearing a huge financial burden. Thus, despite the current demand, he says, "we're playing a very conservative game. "

Do As We Do

The demand developed from a "do-as-we-do" marketing approach, with Sierra International's sister firm as the proving ground. With the two companies at the same site, John says, equipment customers can see the benefits of the Idromecs in operation at Sierra Iron and Metal, the processing plant.

"People who come here are impressed by the organization of the yard, by the cleanliness of it, by the fact that the equipment we sell is being used every day and is producing well," says John. He quotes Sierra's advertising line, "As scrap dealers we know the problems; as machinery dealers we offer solutions, "and says the slogan truly suits the two companies.

His brother, Philip, who is president of the scrap processing company (Ben is chairman), agrees. "Sierra Iron and Metal as the proving ground is important," he says, "because the worst thing you can do is start selling a piece of equipment without knowing that it will live up to what you're saying."

More than the shear/baler and the portable baler have been proven at his plant. Sierra International has expanded its dealership since the initial Idromec contract and now offers a full line of equipment--much of which can be found, or soon will be found, in operation at Sierra Iron and Metal. Included in the distribution line are McIntyre shears and Barko hydraulic cranes. In addition to the shear/baler and the portable baler, the Idromec line also includes mobile baler/cranes, stationary and mobile baler/loggers, and stationary and mobile small briquetters.

Sierra wants to sell anything that makes a scrap plant more efficient, says Ben. "What we're trying to do is bring a new spirit to the scrap industry. The processing being done by many medium-sized scrap dealers is of the old method. We want them to look at new options in processing," he says, indicating that the Idromec options, in particular, are ones many people do not know they can afford. "With our machines, we are like Henry Ford," he continues. "Just like he put everybody on the road, we let the small fellow start processing his material efficiently without investing big, big money."

Though Ben speaks of the Italian ingenuity of Idromecs, he realizes small processors in particular might shy away from products manufactured so far away. Won't replacement parts be a problem?

Sierra assures customers that it maintains a complete inventory onsite at all times, one with enough parts to build two or three machines, with the exception of the steel frames. "We have everything--even the electronic pieces," says John. "Customers can rely on us to supply even the simplest filter."

"I bet you that 20 to 30 percent of these parts will never be sold," Ben says, "but they're here just in case. We are willing to carry dead inventory just for the sake of the customer." He points out that months of production can be lost from waiting for a replacement part, but that his company can ship immediately whatever's needed. "When people buy our machines, they will never be down longer than the day it takes to UPS parts from our plant plus the time it takes to install them."

This standard of service was decided upon at the same time Sierra decided to start up the equipment business, says John. "We always knew, if you make sales and you don't have backups--not just parts but also trained mechanics--you won't make sales in the future."

"Either you're in the machinery business and you commit yourself totally," Ben adds, "or you should get out." He says he will even loan out his own equipment to a customer if a machinery shipment is late.

"We built a good reputation in the scrap industry over the last 25 years as a processor," says John, "and we wanted to make sure we didn't tarnish it by getting involved in the equipment business and not doing the same job we do with the scrap operation."

Increased Equipment Sales

Sales for Sierra International in 1989 increased 100 percent over 1988, its first year of business, according to John. The goal for 1990 is to increase sales again by 100 percent. The company has just appointed a new general sales manager, Jose Pereyra, who will direct this effort.

With the current limitation in the production of Idromecs, the sales increases are expected to come from other equipment represented by Sierra, some of which applies to solid waste. Sierra International is coming closer to reaching its objective of enabling "complete" recycling, according to John. What the company is trying to do, he explains, is handle all types of recycling equipment--everything from machinery for processing scrap to that for processing municipal waste. In fact, he says, "the scrap processing line got us started, but it may be a secondary line in less than a year's time, because the greatest need in America is waste reduction and waste densification."

Whether it's solid waste equipment--which traditional scrap processors increasingly are buying with diversification plans--or scrap processing machinery, is it wise for Sierra International to sell operation enhancers to competitors of its processing sister firm?

Certainly, says Ben. "The processors down the street might buy our machines and become as efficient as our processing plant is with equipment, but we're also efficient in management," he says, indicating what he believes to be Sierra Iron and Metal's edge.

Processing Operations

Just 25 People make the processing plant run, according to Ben's count. He doesn't believe in big crews.

Neither does Philip: "We're not like some operations where one man is liftman. If a guy gets on a lift truck, he also knows what copper is, what brass is. He can do it all Philip claims he, too, can do it all in his plant, as can John with equipment installations. Says Ben, "All our managerial personnel can get out there and do something."

Keeping the personnel roster short is beneficial especially in lean times, Philip says, when the efficiency pays off with little need to let people go.

Right now, approximately 50 percent of the ferrous scrap handled by Sierra Iron and Metal is being sold domestically, with the remainder being sold to export firms. with nonferrous (aluminum, copper, brass, high-temp alloys, and precious metals are handled), the ratio changes to 70 percent domestic, 30 percent export.

Sierra handles all materials required by California for the company to be licensed under AB 2020, the state's beverage container law: plastic, glass, aluminum cans, and other metal containers. Plastic is baled and sold; glass is sorted, but not crushed, before it's sold.

The highlight of the plant, of course, is the Idromec shear/baler. While Sierra sells only 380-ton machines, the size in demand, it runs a 660-ton shear/baler on its site. Sierra also runs a Mosley shear, which will be replaced this year with another Idromec shear/baler. The equipment additions are part of the company's efforts to build up the iron portion of its business.

Much of the iron is from Sierra's field operation, from which comes 60 percent of the company's scrap. (The other 40 percent is from industrial accounts and peddler business.) Sierra sends equipment to nearby refineries and the like, which will, in the process of rebuilding pipelines, leave scrap scattered for miles. The material is precut with LaBounty shears and brought back to the plant for further processing.

Enhancing this operation has meant a new Barko crane for picking up iron in the field and five new trailers to bring it back, in addition to the Idromec shear/baler installations.

Equipment for nonferrous processing at the plant includes an Idromec 1800 briquetter, a McIntyre alligator shear, a Mosley alligator shear, a Falcon shear, and a CP Manufacturing can flattener and blower.

Sierra uses Benati cranes at the plant and cranes manufactured by the Tabrarellis, the same people who produce the Idromec line.

Material handling is accomplished, in most cases, without the unprepared scrap ever touching the ground. While this process isn't always possible with material brought in by peddlers, it is with the majority of the material-from the field and industrial accounts--due to Sierra's large number of rolloff containers. The scrap is stored in the containers until it is processed, although Sierra refrains from leaving material unprocessed for long. The benefit of this container-to-shear/baler process, Philip points out, is not only the efficiency in handling but the resulting cleanliness of the plant. "Customers like it," he says. "They can pull in and out easily and don't have to worry about flat tires from running over scrap.

"That's one of the things that make the business successful," Philip continues, "being appealing to the public--not only the big commercial accounts, but the general public, too. To appeal to the general public, you have to have neat and clean, in-and-out service, like with fast food. People don't like to sit around 20 minutes in line just to drop off 5 pounds of cans."

Another important ingredient for business success, says Philip, is quality control of the product, and he notes that Sierra is known for a standard top-quality package. These packages stem, he says, from the fact that all personnel are knowledgeable about the best handling and processing practices.

The potential for unknowingly accepting hazardous material at the plant is something with which Sierra is increasingly concerned. For that reason the company plans to strengthen its employee education efforts with regular staff meetings now that new office construction is complete.

Father-and-Son-and-Son Decisions

"Sure we get into fights," says Ben in response to a question about three family members running related businesses. "But I have a pretty well-balanced deal over here. [John and Philip] have their own ideas, but they also will listen to me.

"I tell them, play the mongoose game. The mongoose is the little animal that kills the cobra. Since it's not immune to the bite of the cobra, the mongoose must know exactly how far to go when the cobra strikes so it can get out of the way." Ben advises his sons to, likewise, measure their distances so that they don't get bit. "They know how far they can push me before they get bit. Everyone has to know his limitations, his scope, and his boundaries."

Philip notes that although he and John are presidents of their own companies, they are responsible for reporting to each other on company matters.

Ben Sacco’s discovery in Italy of what he considers an innovative processing machine resulted in improvements at his scrap plant, Sierra Iron and Metal, and the establishment of Sierra International Machinery, a full-line equipment dealership.

Sound like a typical problem? Ben thinks so. And he thinks many scrap processing operations his size or smaller respond by spending too much on a piece of equipment or by avoiding modernization of their operations and stunting their companies' growth.

But not Ben. He kept his eyes open for a machine that would meet his cost and output requirements and finally saw what he wanted. He was in Italy looking at equipment when he found the Idromec 4200 portable baler and the 380 shear/baler, the machines that subsequently drove the tin out of Ben's plant and drove him into the equipment-dealer business.

With the shear/baler Ben had the machine of his dreams-one that he says is affordable, efficient, and fast, due to a multidimensional design-and was happy with its effect on his processing operations. Becoming an equipment dealer didn't enter his mind, he says, until several processors came by the plant, were impressed by the shear/baler, and inquired about purchasing one. Ben, who owned the only Idromec in the United States (although the equipment line had been sold throughout Europe for more dm 20 years) told the manufacturers, who were not exporting at the time, of the American interest. They responded with a proposal: If Sierra could sell two machines a year, it would get the dealership. Reports Ben, "Now we've got 95 percent of [Idromec's] production."

The agreement, shaped in 1988, led to the establishment of Sierra International Machinery, with John Sacco, president, and Ben, chairman of the board. Ben won't say how many machines that 95 percent equates to. However, he does say that Sierra International Machinery has sold Idromecs across America--in every region, so far, except the Northwest--and is marketing more than can be manufactured right now--they are three months behind in production. According to Ben, the manufacturer is small and needs to weigh any expansion possibilities against tough Italian labor laws: laying off employees during any potential slow period in the future would be almost impossible without bearing a huge financial burden. Thus, despite the current demand, he says, "we're playing a very conservative game. "

Do As We Do

The demand developed from a "do-as-we-do" marketing approach, with Sierra International's sister firm as the proving ground. With the two companies at the same site, John says, equipment customers can see the benefits of the Idromecs in operation at Sierra Iron and Metal, the processing plant.

"People who come here are impressed by the organization of the yard, by the cleanliness of it, by the fact that the equipment we sell is being used every day and is producing well," says John. He quotes Sierra's advertising line, "As scrap dealers we know the problems; as machinery dealers we offer solutions, "and says the slogan truly suits the two companies.

His brother, Philip, who is president of the scrap processing company (Ben is chairman), agrees. "Sierra Iron and Metal as the proving ground is important," he says, "because the worst thing you can do is start selling a piece of equipment without knowing that it will live up to what you're saying."

More than the shear/baler and the portable baler have been proven at his plant. Sierra International has expanded its dealership since the initial Idromec contract and now offers a full line of equipment--much of which can be found, or soon will be found, in operation at Sierra Iron and Metal. Included in the distribution line are McIntyre shears and Barko hydraulic cranes. In addition to the shear/baler and the portable baler, the Idromec line also includes mobile baler/cranes, stationary and mobile baler/loggers, and stationary and mobile small briquetters.

Sierra wants to sell anything that makes a scrap plant more efficient, says Ben. "What we're trying to do is bring a new spirit to the scrap industry. The processing being done by many medium-sized scrap dealers is of the old method. We want them to look at new options in processing," he says, indicating that the Idromec options, in particular, are ones many people do not know they can afford. "With our machines, we are like Henry Ford," he continues. "Just like he put everybody on the road, we let the small fellow start processing his material efficiently without investing big, big money."

Though Ben speaks of the Italian ingenuity of Idromecs, he realizes small processors in particular might shy away from products manufactured so far away. Won't replacement parts be a problem?

Sierra assures customers that it maintains a complete inventory onsite at all times, one with enough parts to build two or three machines, with the exception of the steel frames. "We have everything--even the electronic pieces," says John. "Customers can rely on us to supply even the simplest filter."

"I bet you that 20 to 30 percent of these parts will never be sold," Ben says, "but they're here just in case. We are willing to carry dead inventory just for the sake of the customer." He points out that months of production can be lost from waiting for a replacement part, but that his company can ship immediately whatever's needed. "When people buy our machines, they will never be down longer than the day it takes to UPS parts from our plant plus the time it takes to install them."

This standard of service was decided upon at the same time Sierra decided to start up the equipment business, says John. "We always knew, if you make sales and you don't have backups--not just parts but also trained mechanics--you won't make sales in the future."

"Either you're in the machinery business and you commit yourself totally," Ben adds, "or you should get out." He says he will even loan out his own equipment to a customer if a machinery shipment is late.

"We built a good reputation in the scrap industry over the last 25 years as a processor," says John, "and we wanted to make sure we didn't tarnish it by getting involved in the equipment business and not doing the same job we do with the scrap operation."

Increased Equipment Sales

Sales for Sierra International in 1989 increased 100 percent over 1988, its first year of business, according to John. The goal for 1990 is to increase sales again by 100 percent. The company has just appointed a new general sales manager, Jose Pereyra, who will direct this effort.

With the current limitation in the production of Idromecs, the sales increases are expected to come from other equipment represented by Sierra, some of which applies to solid waste. Sierra International is coming closer to reaching its objective of enabling "complete" recycling, according to John. What the company is trying to do, he explains, is handle all types of recycling equipment--everything from machinery for processing scrap to that for processing municipal waste. In fact, he says, "the scrap processing line got us started, but it may be a secondary line in less than a year's time, because the greatest need in America is waste reduction and waste densification."

Whether it's solid waste equipment--which traditional scrap processors increasingly are buying with diversification plans--or scrap processing machinery, is it wise for Sierra International to sell operation enhancers to competitors of its processing sister firm?

Certainly, says Ben. "The processors down the street might buy our machines and become as efficient as our processing plant is with equipment, but we're also efficient in management," he says, indicating what he believes to be Sierra Iron and Metal's edge.

Processing Operations

Just 25 People make the processing plant run, according to Ben's count. He doesn't believe in big crews.

Neither does Philip: "We're not like some operations where one man is liftman. If a guy gets on a lift truck, he also knows what copper is, what brass is. He can do it all Philip claims he, too, can do it all in his plant, as can John with equipment installations. Says Ben, "All our managerial personnel can get out there and do something."

Keeping the personnel roster short is beneficial especially in lean times, Philip says, when the efficiency pays off with little need to let people go.

Right now, approximately 50 percent of the ferrous scrap handled by Sierra Iron and Metal is being sold domestically, with the remainder being sold to export firms. with nonferrous (aluminum, copper, brass, high-temp alloys, and precious metals are handled), the ratio changes to 70 percent domestic, 30 percent export.

Sierra handles all materials required by California for the company to be licensed under AB 2020, the state's beverage container law: plastic, glass, aluminum cans, and other metal containers. Plastic is baled and sold; glass is sorted, but not crushed, before it's sold.

The highlight of the plant, of course, is the Idromec shear/baler. While Sierra sells only 380-ton machines, the size in demand, it runs a 660-ton shear/baler on its site. Sierra also runs a Mosley shear, which will be replaced this year with another Idromec shear/baler. The equipment additions are part of the company's efforts to build up the iron portion of its business.

Much of the iron is from Sierra's field operation, from which comes 60 percent of the company's scrap. (The other 40 percent is from industrial accounts and peddler business.) Sierra sends equipment to nearby refineries and the like, which will, in the process of rebuilding pipelines, leave scrap scattered for miles. The material is precut with LaBounty shears and brought back to the plant for further processing.

Enhancing this operation has meant a new Barko crane for picking up iron in the field and five new trailers to bring it back, in addition to the Idromec shear/baler installations.

Equipment for nonferrous processing at the plant includes an Idromec 1800 briquetter, a McIntyre alligator shear, a Mosley alligator shear, a Falcon shear, and a CP Manufacturing can flattener and blower.

Sierra uses Benati cranes at the plant and cranes manufactured by the Tabrarellis, the same people who produce the Idromec line.

Material handling is accomplished, in most cases, without the unprepared scrap ever touching the ground. While this process isn't always possible with material brought in by peddlers, it is with the majority of the material-from the field and industrial accounts--due to Sierra's large number of rolloff containers. The scrap is stored in the containers until it is processed, although Sierra refrains from leaving material unprocessed for long. The benefit of this container-to-shear/baler process, Philip points out, is not only the efficiency in handling but the resulting cleanliness of the plant. "Customers like it," he says. "They can pull in and out easily and don't have to worry about flat tires from running over scrap.

"That's one of the things that make the business successful," Philip continues, "being appealing to the public--not only the big commercial accounts, but the general public, too. To appeal to the general public, you have to have neat and clean, in-and-out service, like with fast food. People don't like to sit around 20 minutes in line just to drop off 5 pounds of cans."

Another important ingredient for business success, says Philip, is quality control of the product, and he notes that Sierra is known for a standard top-quality package. These packages stem, he says, from the fact that all personnel are knowledgeable about the best handling and processing practices.

The potential for unknowingly accepting hazardous material at the plant is something with which Sierra is increasingly concerned. For that reason the company plans to strengthen its employee education efforts with regular staff meetings now that new office construction is complete.

Father-and-Son-and-Son Decisions

"Sure we get into fights," says Ben in response to a question about three family members running related businesses. "But I have a pretty well-balanced deal over here. [John and Philip] have their own ideas, but they also will listen to me.

"I tell them, play the mongoose game. The mongoose is the little animal that kills the cobra. Since it's not immune to the bite of the cobra, the mongoose must know exactly how far to go when the cobra strikes so it can get out of the way." Ben advises his sons to, likewise, measure their distances so that they don't get bit. "They know how far they can push me before they get bit. Everyone has to know his limitations, his scope, and his boundaries."

Philip notes that although he and John are presidents of their own companies, they are responsible for reporting to each other on company matters.