Markets Stir Baler Interest

Healthy commodity markets are boosting equipment sales, but matching the right baler to your operation can still be challenging.

For all the excitement among equipment manufacturers over the boom in the baler market, the current buying spree among scrap metal processors and MRF operators and designers should really come as no surprise.

The increased demand associated with healthy markets has prompted scrap yards and material recovery facilities to increase volume. Increased prices have allowed for some belt loosening, and more room for capital investments to modernize and enhance processing lines. As a result, baler manufacturers are enjoying record sales.

MARKET TREND? But there seems to be no unified theory among manufacturers as to specifically what customers are in the market for. Some say larger, two-ram balers are the wave of the future, while others see a movement toward smaller, single-ram units.

With the increased focus on municipal recycling, Robert Pfeffer, western regional sales manager for Harris Waste Management Group, Peachtree City, Ga., suggests that smaller balers designed for material recovery facilties are gaining a foothold in the market.

"Mandatory recycling is forcing more people to be more efficient in the way they process materials because their volumes have increased," says Pfeffer. "I think that your smaller people started off with just a basic vertical baler, but their production has increased, or they’ve gone into either more verticals or they’ve taken the next step up into the horizontal baler market."

More processing is being picked up by the private sector, according to Pieter Van Dyk, president of Van Dyk Balers, Clifton, N.J. Van Dyk reports that baler sales in the latter part of 1994 were "absolutely crazy." Figures for 1995 do not appear to be slowing down, he adds.

"The private sector recyclers have had some tough years from 1989 to 1993, but now the markets are obviously much better," he says. "So they are doing a lot of investing."

DESIGN. Given the range of processing needs, baler design and engineering are changing accordingly. Developments in hydraulics — literally the life blood of baler operation — have improved power maximization for a number of manufacturers.

"Hydraulics have become more efficient," according to Pfeffer. "The main motors we utilize have a higher efficiency rating. They draw less power."

In addition to improvements in hydraulics, Kenneth Korney, vice president of sales and marketing for International Baler, Jacksonville, Fla., advocates a modular approach to a baling operation, especially a MRF, as a means to streamline processing and reduce power consumoption costs.

"Instead of putting all of your material in one baler, you can put it in a modular system with two balers. You can designate a big one for your corrugated material, for example, and then designate the other one for your plastics and your paper. If one would go down, you could always run the other products and you won’t be completely down. You can run at least 50 percent of your production."

One large two-ram baler can cost as much as $400,000, says Korney, "as opposed to putting in a couple smaller, auto-tie balers that would total maybe $300,000." Lower horsepower requirements to operate two smaller balers translates into energy savings.

Designing a high level of quality into equipment is no simple feat, says Pfeffer. "You just can’t open up a baler business overnight. It takes a good five years at least to really prove out a design of structural soundness for a piece of equipment. That’s one thing a buyer should take into consideration: how long has this piece of equipment been out?"

Technicians at Van Dyk Baler enroll in a four-year training program in hydraulic, mechanical and electrical systems, and spend a year in the factory before working as field mechanics.

"We put a lot of money into that but I think it pays off," says Van Dyk. "We have a preventive maintenance program that we offer all of our customers. As part of that program the machines are checked regularly by our own people. "

KNOWLEDGE. Knowledge is the best defense against outfitting a processing operation with the wrong baler. Educating the day-to-day operator as well as the buyer is a wise idea. Generally, the level of expertise and understanding of baler owners and operators is "much much higher" than it was 15 or 20 years ago, according to Jack West, executive vice president of Mac Corp./Saturn Shredders, Grand Prairie, Texas.

"(Processing operations) have much more qualified people than they used to have," West observes. "They have to keep up with technology. It used to be that you didn’t have all the bells and whistles and buttons on balers that they have now. We have it to a point where it runs automatically. So they have to keep their people up-to-date on what’s happening. You need to have skilled people."

While the manufacturer may design, build and market a baler, the customer may actually know more about that machine in the end, notes Korney.

"The guy out in the field probably knows our machines a lot better than we do, because he operates it on a day-to-day basis," he says. "Some of them do come back with feedback, and say it’d be nice to have this on the machine or had that on the machine. We do take a look at that and see if we can include it or put it in as an optional item."

In some municipally run operations, however, the buyer may in some cases have little or no experience with balers — or any other recycling equipment for that matter, says Richard Harris, vice president and general sales manager at American Baler, Bellevue, Ohio.

"Today, people are being charged with the responsibility of buying equipment who may not necessarily be involved with the operations, and may or may not have ever seen or operated a baler," he says. "We want to make sure that, it is properly applied. In municipalities and some of the national accounts, we’re seeing more novices, so we have to be careful to educate both the buyer and the operator."

Harris suggests that customers too often take a spreadsheet approach in an effort to select a baler based on criteria fed into a computer program. Some of the less quantifiable features and advantages of a baler model or line can be overlooked in a process like this.

"For some people who have been in the business for a long time, that can be a beneficial thing to do," he says. "But a novice might say, ‘okay, I’m going to distill all these operational needs and plug them into a spreadsheet program, and the lowest priced unit that meets all this criteria is the one I’m going to buy.’

"Sometimes it gets to the point of just looking at numbers and not looking at the reality of the situation. I think when you do that, you get yourself in trouble."

FUTURE. Mired in weak markets as recently as 18 months ago, processors generally held back on new capital investment. But with improvements over the last six to 12 months, processors are more likely to take the plunge on new equipment purchases, Pfeffer predicts.

"There’s a lot of old equipment out there — a lot of old HRB balers that have been out there for years that are getting tired," he observes. "At the large end there will still be a fairly good market for the larger two-ram units. There will be a lot of replacements, some new. I think the municipal busines was really strong last year, and will continue to be strong as more and more municipalities get into it themselves."

While he agrees that more municipalities are being legislated onto the recycling bandwagon, Van Dyk says that they’re likely to leave the actual processing to those with more experience at it — namely, the private sector.

"Five years ago, the municipalities, states or counties were the people buying the equipment. the private guys had a hard time. Now I think private industry is going to take over. They tend to do it a little more cost-effectively than the municipalities. I think in the end, the municipalities want to get away from it ... I personally see the trend toward private material recovery facilties, more and more."

In the scrap metal sector, processors of ferrous metals and other heavy materials focusing increased attention on mobility, according to John Sacco, vice president of Sierra International machinery, Bakersfield, Calif.

"As far as ferrous goes, its moving toward portable, self-contained units," he says. "That’s where it’s definitely going to go. As far as paper balers, you’ll see complete systems, like in MRFs, transfer stations."

The growth is likely to extend beyound U.S. borders, according to Buddy Himes, president of Presona, Waco, Texas. He expects equioment manufacturers to eventual benefits from market opportunities in both Canada and Mexico as a result of the North American Free Trade Agreement.

"It’s just a matter of the peso getting straightened out," he says of the current Mexican economy. "I see a sizable increase in MRFs and source-separating types of equipment, including balers, in the next five years."

FUTURE. Most baler manufacturers agree that the scrap processor or MRF operator in the market for a new baler needs to understand the scope of his business and the volume and composition of his material.

The three primary issues to consider, according to most manufacturers, are cost of the equipment itself, types of materials to be processed and bale specifications as set by the market.

"If we can get a feel for the scope of the project you’re involved in, we can narrow it down to a couple of models," says Harris. "But the overall advice would be to first define the task and define the end results very clearly in your mind.."

In adition to capital costs, there are issues of operating costs and ongoing maintenance and service.

"The one mistake I see that’s being made is that people look only capital costs when they should really take the whole cost structure in perspective, especially your operating costs over the next 10 years of running the equipment," says Van Dyk. "Labor costs are only going to increase, so whatever you can do to lower those labor costs is going to make you competitive."

Sacco agrees, suggesting that service over the long term is something that tends to be overlooked.

"Are you going to be able to get the service that you need?" he says. "That is so important. Will someone take care of your needs when you order a part, without making you wait three or four weeks? Check the reputation of the company selling the equipment. Compare. There are always people who are willing to talk about their experience."

Ideally, a reputable manufacturer will not — or at least, should not — sell a processor a baler he doesn’t need.

"If I do not have a baler to fit your needs, then I will send you to someone who can," says Himes. "I have no problem with that whatsoever. I’ve known most of the salesmen from most of these companies for a long time. Most of them do the same thing. If they can’t do it, then they might as well give you the name of someone who can."