Taking the long view in scrap metal recycling
A Montana recycler uses a Metso shear and shredder to gain an edge in a competitive market.
No one can afford to stand still for long in the recycling industry, and Pacific Steel and Recycling, the Intermountain Northwest’s largest scrap metals recycler, is no exception. Pacific has 46 branch locations in the states of Washington, Idaho, Utah, Nevada, Wyoming, South Dakota, North Dakota, Colorado, Montana, and Alberta, Canada. The company’s recycling division processes some 500,000 tons of ferrous and nonferrous scrap per year.
Facing increasing competition and declining prices for scrap metal, Pacific is constantly looking for ways to streamline operations and boost efficiency. To that end, when Pacific decided to break ground on a new scrap recycling facility in Billings, Montana, in 2011, they took the necessary time and effort to develop the best plant design possible. According to Pat Kons, Vice President, Scrap Operations, “We tried, at that point in time, to say, ‘How can we make this the most efficient facility in the country?’ That’s what we tasked ourselves, and so this plant concept came from that process.” Ken Halko, VP Ferrous Products and Trading, says, “We talked to a lot of other companies that had built greenfields. We visited them and asked how they developed their layout, ‘what did you do right, and what would you not do again?’”
The same attention to detail was evident when it came to purchasing equipment for the plant. According to Pat Kons, “Prior to us buying the equipment, and we did it both on the shears and the shredder, we vetted the decision internally with our managers and our executive team. We also put the suppliers to task and said ‘OK, we want to see your equipment, we want to talk to people operating that equipment, and we want to hear those people’. So we went on a lot of tours, visiting different locations,” he says, “and that’s how we came to make our decision on buying the Metso product. We not only heard the side of the sales people and engineers, but the ‘boots on the ground’ operating it and what they thought.”
Pacific’s Billings scrap recycling facility utilizes a Metso 80/104 shredder, and a Metso PowerCut 1025 stationary shear. The Metso 80/104 shredder is 3,000-horsepower unit that reduces auto bodies, home appliances and other metal scrap into small pieces, and is designed to process 10,000 to 12,000 tons per month. (80 x 104 refers to the size of the hammer diameter multiplied by the nominal rotor width). The Metso 80/104 shredder at Billings has the distinction of being the first car shredder installed in the state of Montana. Pacific installed a state-of-the-art drainage facility at Billings to remove all vehicle fluids prior to shredding. The shredder can completely shred a car in under 30 seconds, sorting out all of the prepared iron. The remaining material is processed within 2½ minutes in a downstream sorting system that recovers the non-ferrous materials.
The Metso PowerCut 1025 stationary shear is designed for mid-size capacity needs for shearing medium-heavy, bulky mixed steel scrap. Metso PowerCut shears offer a high-efficiency cutting process, with a breaker bar exerting forces on brittle material in such a way that it will break, even before contact with the upper blade. As a result, wear and the shearing force required are considerably reduced. The PowerCut shear installed at Billings is one of four identical Metso units that Pacific bought to increase capacity at some of its larger scrap processing facilities. The other Metso shears are installed at Pacific operations in Spokane, Washington and Nampa and Pocatello, Idaho. Pacific also operates a second Metso 80/104 shredder at its location in Mayfield, Idaho, just outside of Boise.
One of the advantages of the Metso PowerCut stems from the density and quality of the scrap bales it produces. “Everybody’s looking for what’s called ‘cut grades,’” says Pat Kons, “and the Metso shears produce as fine a cut grade mill package as you can supply. Steel mills love our scrap.” Metso PowerCut shears feature a side compactor and lid that compress the scrap more than the cutting opening requires, resulting in an exceptionally high density in the baled scrap. Ken Halko adds that “It’s all about quality. When the steel mill calls and says they will take your 6,000 ton and won’t take the other guys’ because of your quality, that’s what keeps us ahead. We have never been about quantity, it’s all about quality.”
Although quality is of primary importance, the Metso shears have also increased production. According to Marshall Knick, Regional Manager, “Cycle time on the Metso shear is phenomenal. Before Metso we would go 2,000 cuts, now we are doing 6-8,000 cuts. The increased production, combined with quality of the scrap bales, have opened up new markets for Pacific Steel. “Now we can produce a foundry grade scrap,” says Knick. “Yes we could do it before, but the cycle time was longer and before you knew it the month was done. You missed your opportunity. So it’s opened us up to markets we haven’t shipped to before Metso.”
This high density of the scrap bales also helps to reduce transportation and operating costs. “It’s important for us to ship everything at weight,” says Kons, “and this machine has helped us get there. Previously, we were always light, and then you’ve got to have a guy out there with a packer, and additional diesel fuel and man hours, and so man-hours per ton has gone way down. So are we happy that we made this investment? Yes, absolutely, because it’s helped us.”
Transportation costs are a major factor in the sparsely populated region of the country in which Pacific operates. Pacific built a quarter-mile rail spur to connect the Billings plant to a Montana Rail Link (MRL) line that runs along Coulson Road. “It’s all about flow through the yard,” says Ken Halko, “and the heartbeat is rail. Without rail, we are dead in the water.”
Pacific Steel and Recycling began more than 100 years ago as a one-man operation in Spokane, Washington. In the 1880’s, Joe Thiebes emigrated from Germany to the state of Washington, and followed his family’s business tradition of trading hides and furs. Thiebes’ son, also named Joe, moved on to Montana, where he officially founded the Pacific Hide and Fur Depot in 1920.
During World War I, the company expanded beyond furs and hides into collecting ferrous and nonferrous scrap. This scrap metals venture eventually led the firm to branch out in the 1950’s into sales of new steel products. The Thiebes family’s active involvement in the business came to an end in the early 1980’s, but Pacific remains a 100% ESOP (Employee Stock Ownership Plan) corporation to this day.
Pacific’s long history in the recycling industry, as well its employee ownership structure, has contributed to its ongoing success in a challenging business climate. The ESOP structure motivates employees to achieve cost savings, production increases and customer service improvements – all of which help keep Pacific competitive.
That culture of ownership and teamwork also means that decisions are made with a view to the long-term impact. “It’s working for us right now in this tough economy,” says Pat Kons, “but I can absolutely say that the Metso shears and shredders are a long-term investment. We’re a hundred and twenty year-old company,” he continues, “and if we’re going to invest in a piece of equipment, we want it to be here years from now. That’s our mindset: it’s all about the next generation of ESOP employees. We expect a thirty- to forty-year investment. That’s what we signed up for.”
“Working with customers like Pacific Steel and Recycling, who take long term view on business, is very important for us at Metso,” says Bob Pfeffer, Product Manager – Shears & Balers. “We want to be trusted partners to our customers, not only at the time of the equipment purchase, but throughout the lifetime of the machines and beyond. Providing world class service to our customers is something we work towards every day.”