Scrap Processing Overseas: Are We Worlds Apart?

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May/June 1988

In a manner of speaking, yes. On the other hand, global interest in better, more efficient processing technology and methods is the strongest common denominator among scrap plant operators from the U.K. to Korea. Five manufacturers, whose equipment is sold internationally, give their general impressions of why scrap operations around the world are more alike than they are different.

By Madelyn R. Callahan

Madelyn R. Callahan is a Washington, D. C, writer who specializes in business issues.

Do scrap technologies differ significantly from one country to the next?

Not technically. The basic equipment and operations are universal; both machinery and methods tend to be standard. In fact, equipment manufacturers interviewed for this article agree that advanced means of communication and modern ease of travel are gradually creating a global community of homogeneous processors. They concur that "softer factors" such as state of scrap facilities, cultural attitudes, and business mentality--factors that, the manufacturers say, can be described in only the broadest terms--affect purchasing decisions to a slight degree. However, these softer factors do not, as one would expect, create a world of difference.


For example, processors in continental Europe and the U.S. alike are motivated by profit, says Gunn Phillips, sales director for Dusseldorf, Germany-based Lindemann Recycling Equipment, Inc. What varies is the role that equipment plays in the profitmaking.


According to Phillips, in America the equipment "must be efficient, must have the capability to produce at the rate that the project requires, and, in the end, must be a contributor to profit." But this is secondary, he adds, because the project itself "has been structured so that there is profit in it, in addition to the profit generated from the equipment." Americans, he says, view their equipment as support.


But, generally speaking, scrap processors in Europe are equipment-oriented, Phillips says. "They're of the old-world craftsman kind of mentality. That is, they have the initiative or the requirement to look at the detailed design of the equipment and the performance specifications of the equipment in great depth." Phillips notes that the pure craftsman views the equipment as the sole source of profit.


In countries like the U.S. and U.K., lengthy scrap processing histories may account for the supportive role of the equipment, says Norman Coop, the British director of the Italian shear manufacturer Vezzani U.K. Ltd., in Berks.


He calls the U.K. "a kind of battleground of scrap processing" due to the origin of steelmaking there during the Industrial Revolution. "Steel was being melted on the corner of every street. People always collected scrap, as long as anyone can remember. They went around with carts. There's always been a recycling business here, unlike in other countries."


And Britain's long tradition continues today. According to Thomas A. Wendt, president of D&J Wendt
Corporation, in North Tonawanda, New York, the London metropolitan area may have as many as 400 nonferrous scrap processors. Wendt says that he's always surprised by the volume of small balers and shears that his Spanish line, D&J Moros, supplies to England. They sell 70 to 200 every year.

Who is buying these small pieces of equipment? Wendt's Moros representative says there are hundreds of one- and two-man nonferrous scrap processors working out of garages. Says Wendt, "They can fit one or two pieces of equipment ... [they] literally have a truck or wagon, and they collect and process metals."


Such a legacy serves the U.K. well. According to Coop, the country has 10,000 registered scrap merchants (approximately 1,000 mechanized), 16 million tons of steel produced per year, and 10 million tons of scrap processed per year--5 million of it for export.


Worldwide Plants, Preferences, and Approaches


In countries where Coop has observed steelworks-owned businesses, such as West Germany, the scrap plants--like steelworks--stress weekly production goals. Coop describes the plants as "industrialized and organized, highly disciplined-working in accordance with regulations and social disciplines which give the people and the [plant] an industrial look in every way. It is virtually like a manufacturing plant."


Newer facilities throughout the world share the industrial look. Many are paved, says Wendt, which may account for the prevalence of rubber-wheeled hydraulic cranes at these plants, preferred over the cable variety.


Wendt recalls walking the length of a Swiss facility that was "absolutely clean--even in the pouring rain." The paved plant also had a street sweeper and sewers throughout, "so the water didn't even build into puddles."


Wendt and Coop agree that costs prohibit similar upkeep and paving of the world's larger, older plants.


Good housekeeping, both men note, is common in small facilities across the U.S., U.K., Europe, Australia, and South Africa, where efficiency depends on cleanliness. Wendt says operators of these plants don't have the luxury of extra room for stockpiling.


Wendt thinks the small facilities, particularly in places where cities have grown up around them, are productive because of space restrictions. The material has to come in, it has to be processed, and it has to go out.


Part of the efficiency Wendt describes is proper equipment maintenance. Small operations can't afford to have a machine go down and to have to turn business away.


Coop says that attention to upkeep is notably high in the steelworks- or government-controlled plants of Germany, Italy, Holland, Scandinavia, Eastern Europe, and Soviet Russia. "Where the bulk of processing is governed by larger groups, actual investment in plants is done on a business-plan basis." Equipment will be replaced every five years or according to a business plan, he says.


But this emphasis makes selling equipment to Eastern Bloc countries tough, according to Coop, because of stringent rules, penalty clauses, and high-performance tests. A machine "must run for 12 months; otherwise you've got to pick it up and take it back."


Power Efficiency a European Priority?


Power-efficient equipment, says Wendt, is another high priority for Europeans. "That's basically because Europe doesn't have the electrical power we're used to in America. If I wanted to put in another great big machine, I'd call my power company and say 'I want another thousand amps of service.' They'd be here tomorrow hanging transformers and putting in a nice big electric meter and then next month start sending me that bill. They'd be thrilled."


And although electricity and horsepower are cheap virtually anywhere in the states, in Europe it's not a matter of cost. "If you have all the money in the world, you may not be able to run a 500 horsepower motor. ... [The power] just isn't there, unless you want to put in your own power station."


Energy conservation is a way of life in Europe as well as the U.K., and it is an automatic consideration in equipment design. A Dutch 550-ton shear that uses a single 125 horsepower motor with a flywheel and a pump makes approximately seven cuts per minute. The American version, says Wendt, would be 300 horsepower and make six cuts per minute.


A major impact on energy conservation and recycling overseas, he says, is government support, which makes for a healthy industry. That's not the case in America, he adds, where Congress has eliminated the investment tax credits that processors enjoyed during the 1970s.


"There are excellent tax advantages to recycling in Europe. It's all very highly promoted, encouraged, and backed by government because it's conserving energy."


But, according to Scott Newell, president of San Antonio, Texas-based Newell Industries, Inc., overseas sensitivity to power demands is lessening. He says his company, which produces shredders and separating systems, sells higher horsepower equipment to plants outside the U.S.


New Equipment in Emerging Industrial Countries


Emerging industrial countries are also upgrading their processing methods and becoming mechanized, albeit slowly. Roy E. LaBounty, president of LaBounty Manufacturing, Inc., based in Two Harbors, Minnesota, says that though torches still predominate in Indonesia, Taiwan, Singapore, and South Korea--where there is ample cheap labor--some areas are buying equipment for the big operations of supplying steel mills and breaking ships. "Now that new technology is coming along, they are changing," LaBounty says. "The lower cost technology of a mobile shear gives them a better way. They can buy an excavator and a small shear to replace the burners."


Inasmuch as general preferences and approaches vary slightly throughout the world, they are influenced not by technology, but, for the most part, by a country's available resources, needs, and values. Scrap technology, especially advancements in equipment and methods, is the firm common ground for the world's processors, even those of newly industrialized countries. That interest in technological developments, according to Newell, isn't likely to change:


"I've been traveling for 20 years, and I've noticed there's much less of a difference between the modern processing plants among different countries. They're much more similar today than they ever were before. People travel more, they see what goes on more; people attend international conferences, they go to the equipment exhibits.

In a manner of speaking, yes. On the other hand, global interest in better, more efficient processing technology and methods is the strongest common denominator among scrap plant operators from the U.K. to Korea. Five manufacturers, whose equipment is sold internationally, give their general impressions of why scrap operations around the world are more alike than they are different.
Tags:
  • 1988
  • recycling
  • steel
  • scrap
  • equipment
  • Europe
  • Germany
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  • May_Jun
  • Scrap Magazine

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