Sizing up the Market

Scrap recyclers have been able to enter the shredding business thanks in part to smaller models made available by equipment makers.

Economies of scale often lead business decision makers to build manufacturing plants or other facilities on a grand scale, a logic that has helped create some impressively large factory complexes and office buildings.

In most business sectors, however, this logic is not iron-clad, and it might leave gaps or niches in a market that can be filled by competing firms.

The scrap recycling industry appears to be seeing a version of this scenario play out in the shredding sector. To be certain, several newer super-sized mills have been built in the past several years. In most of these cases the buyers have recouped their investment.

At the same time, though, many small and medium-sized scrap companies have invested in shredders of their own, often choosing smaller models that lower the barrier to entry.

Recycling Today Editor-in-Chief Brian Taylor asked Glenn “Skip” Anthony, vice president of sales at American Pulverizer Co., St. Louis, about how his customers have been approaching entering the shredding market using these smaller shredder models.

Recycling Today (RT): What types of customer input or questions have compelled some shredding equipment makers to focus on small shredding plants?

Skip Anthony (SA): In the late ’90s and early 2000s, small to mid-size scrap operations that did not shred had margins that where shrinking, making it tough to continue to grow. The options were few. Installing a big shredder was probably too expensive; doing nothing was a risk to the long-term competitiveness of their businesses. They had to get more value out of their processing activities. They needed a shredder that could handle automobiles that were whole, flattened or logged as well as other materials normally processed in larger mills at a price they could justify.

It was important to recover nonferrous materials that are a critical byproduct of shredding to justify a shredding system.

The system also had to fit into existing smaller facilities to allow for the flow of material and ease of operation.

RT: What types of market size or competitive considerations lead customers to believe the best shredder for them is in the 60-to-80-inch range?

SA: The “60” series mills were designed originally for the operations that wanted to shred 3,000 to 5,000 tons per month. Once we began installing them and working with our customers and our suppliers, such as providers of DC motors, we found they can do a lot more. Today that same machine is capable of processing in excess of 8,000 tons per month without sacrificing any nonferrous recovery.

RT: What are the cost-per-ton attributes of smaller shredding plants that can make them a wise choice in some situations?

SA: The cost per ton to operate a smaller shredder is comparable to a larger shredder based on the increased production capabilities and the customized casting designs and rotor design. The system operates with fewer personnel [and] fewer material handlers to feed it and requires less maintenance.

RT: Are smaller companies the likeliest buyers of these shredding plants, or are there situations where larger companies purchase a smaller plant?

SA: The smaller yards are still the best market for the small shredders as well as first-time shredder operators. Several large companies have endorsed the idea of using multiple smaller shredders strategically located to cover a wider area than one large shredder. We have two overseas customers doing that. They can look at possibly two or three of these smaller installations for the price of one super-sized shredder installation.

RT: What are some fabrication or planning challenges unique to designing a durable smaller plant?

SA: It’s not as simple as merely scaling back a larger shredder; it’s a more intricate process. To be done well, a smaller shredder still must have sufficient weight and rigidity where it is needed. The design and location of feed rolls, the mill opening, the angle of introduction and the rotor are extremely important for a smaller shredder to thrive on the job.

Also, some yards have little space, so it can be best to have a system design that allows scrap to be fed directly onto the infeed chute, without the use of an infeed conveyor. One of our systems is located on only 3 acres, and it was quite a challenge to design our shredder and conveying system to maximize the flow of material.

RT: Are there standard types of motors or downstream systems to match with a smaller shredding plant, or are there a variety of options?

SA: The first machines were supplied with AC-wound motors with liquid rheostats and GE Multilin starters. The AC motors did not offer the variable speed or jog-reverse features that the DC drive motor options now do. The last mills have been supplied with these DC drive packages.

In a lot of the areas where these smaller shredders are installed, they struggled to get power from utilities. The DC drive is both operator and utility friendly and has been accepted in areas that had rejected traditional AC drives. This has allowed operators to maximize production at a reduced electrical cost.

Downstream systems can be configured to be comparable with those at large mills at less cost. Small shredding plant operators can put more emphasis on downstream systems based on lower overall equipment and installation costs to get an even better recovery of nonferrous materials.

RT: Are there types of feedstock that can be handled by a super-sized shredder that are not suitable for a smaller shredding plant?

SA: The smaller mills cannot handle some of the heavier scrap grades that the largest machines can nor can they handle bundles and heavy bales normally associated with the 98-plus-sized mills.

RT: For customers who have reached the maximum output limit with a smaller plant, what are their options to increase production?

SA: Of course, one option is to run more hours to achieve higher output. We do indeed see some operators running eight to 10 hours per day when their customer orders dictate so. They can also put in a second motor to increase horsepower and production. We have several customers that have included dual motors initially and some that have added a second motor at a later date.

Also, we are seeing some interest in our hydraulically powered dual-shaft and three-shaft pre-rippers. The machines can be used as pre-shredders installed before the mid-sized shredders to prevent explosions, reduce horsepower consumption and increase production.

The key is to get involved closely with a customer’s potential needs to supply the right size shredder to handle today’s needs and their potential growth.

Skip Anthony works for St. Louis-based American Pulverizer Co. and can be contacted at santhony@ampulverizer.com.