Specifying for maximum margins

The global health crisis and the resulting impact on the economy mean organizations are scrutinizing their business investments more than ever before. Many people outside the recycling industry might presume that capital investments will grind to a halt as a result. However, this is an industry renowned for innovating, often in the face of difficult market forces. It is also an intelligent industry increasingly aware of the value in “waste,” and so, it continues to evolve.

A growing number of people in the industry have learned that it is possible to produce valuable recyclables—often to an exact specification—by shredding scrap. This scrap can be reintroduced into the supply chain, reducing the need for virgin materials, as well as the cost and environmental impact of landfills. Sometimes, the valuable materials may even remain locked within disposed products destined for landfill. Shredding, however, can liberate these materials, giving them a useful second life.

With all of this comes the potential to generate revenue from items that many people simply would consider trash.

Recovery effectiveness often starts with defining the perfect shredder specification; get this right, and the payback period for the equipment will be accelerated and the margins maximized.

What should operators look for?

Machinery fit for the job

Above all, the shredder should be capable of performing the job it was purchased to do. Four key questions any responsible machine manufacturer should ask their customers are:

1. What do you want to shred and how large is the material?
2. What throughput do you require?
3. What shred size is needed?
4. What is your downstream process?

The answers to these questions will give the supplier enough information to provide a general shredder recommendation—the customer shouldn’t be expected to know all the possibilities. However, in the most successful of manufacturer-customer relationships, both parties will then work together to address all the finer details that could affect potential margins moving forward.

Flexible technology

The more flexible an asset, generally, the more diluted the market risk for the operator and the greater the potential return on investment.

If a refuse-derived fuel/solid recovered fuel shredding line can handle a wide variety of input materials, for example, and manufacture fuels to meet different end-user specifications in terms of particle size, calorific value and moisture content, the market naturally opens up.

Or, if a shredder can be reconfigured to handle different types of e-scrap and appliances, everything from circuit boards to old computers, cable boxes and perhaps even refrigerators can be processed to liberate the many valuable materials locked inside. Precious metals, plastics, copper and more can then be extracted and separated into clean fractions for the highest resale value.

Purchase price versus operating costs

Most operators quite rightly will pay close attention to the purchase price of an industrial shredder because it must be within the financial reach of the business. That is why two-step shredding processes that can now be executed with a single machine are commercially attractive.

For example, one of our biomass clients used to process wood with a primary shredder followed by a high-speed secondary shredder. However, limited resistance to foreign objects within the waste stream resulted in unmanageable machine breakdowns and operational downtime.

Switching to a robust single-step electric mobile shredder, on the other hand, gave this client the ability to reliably produce 30 tons of wood waste per hour into a P63-specification biomass fuel, with less than 6 percent of the fines sized less than 10 millimeters and with 20 percent more uptime. The resulting product is being sold to board mills and biomass plants, with approximately 18 tons per week of clean metals also being extracted from the overband magnet for resale.

True affordability, certainly in the long term, also is influenced by several other factors, such as power consumption, ease of maintenance, service intervals, the cost and availability of spare and wear parts and overall machine reliability.

In short, what may appear to be a “low-cost” shredder at the outset could become very costly in the long run if the operator encounters high downtime rates.

Design features

It is important to look for often seemingly simple design features that translate into significant cost savings and improvements in process efficiency and, consequently, greater operator profitability.

Some four-shaft shredders are manufactured with cutting systems that can be refurbished, for example, which can reduce the cost of replacement parts by up to 40 percent.

Cutter features differ between manufacturers, as well, and can have a large effect on operating costs. Edge hardness varies widely, with some cutters made from hardened plates that are more cost-effective but less durable, while others are forged and case-hardened, resulting in tougher, longer lasting cutters. In any case, shredding with sharp cutters results in a more defined shred with less off-spec output and, therefore, higher efficiency overall.

Such features will differ by manufacturer, but the important point is to ask how the manufacturer engineers profitability into the shredder. Do speed control adjustments enable slow-speed, high-torque ratios to be maximized without affecting machine wear, for instance? Modern synchronous drives are designed to make this possible by automatically lowering rotor speed and increasing torque on tough materials. This optimizes capacity while reducing the amount of reversals. Also, operators should ask about the shredder’s ability to absorb shock from foreign objects without causing costly damage.

Operators should explore application-specific advantages, too. When shredding wood, for example, a slow-speed single-shaft or shear shredder can reduce fines by around 20 percent compared with higher speed machines, which means more product to sell and less off-spec material to dispose of.

Energy-efficient motors

When the technology is driven by energy-efficient electric motors rather than by diesel-hungry alternatives, the savings can be vast in terms of financial and environmental gain. Depending on the operating hours of a shredding line, fuel consumption savings can reach hundreds of thousands of dollars over a five-year period. Such savings could soon accelerate the payback period of the capital investment and maximize the margins operators are able to make from their plants. Electric-driven shredders often can help to lower insurance premiums, too, and have much lower maintenance requirements.

The entire processing line

Some recycling processes need shredders that can size reduce materials and nothing else, in which case the processing line is incredibly simple, and the shredder specification is the operator’s only concern.

However, when handling more complex products, such as unplasticized polyvinyl chloride window frames, a shredder usually will work most effectively—and achieve maximum recycling rates—when it is integrated into a system with downstream separation equipment. The compatibility of the different machines is, therefore, crucial. The shredder’s output must be optimized for the downstream equipment, and everything must “talk” to one another. No specification should be considered in isolation, otherwise performance, and the operator’s profitability, will be jeopardized.

Service and support

While a shiny new shredder is beautiful to look at, it is a hard-working machine and will require routine servicing and replacement parts to maintain its operational effectiveness. Therefore, it is important to talk to other organizations using the same equipment to confirm the availability and cost of spare parts, on-site and remote support and overall ease of maintenance regimes. The answers to these questions will influence potential downtime levels, which could have a huge effect on the margins that can be attained.

Finance options

There is no right or wrong way to buy a shredder. Some operators prefer to own their machinery outright, whereas others would rather spread the cost of the asset over a fixed term, especially if attractive financial incentives are available. While this doesn’t necessarily enable a business to maximize the profitability of the shredding process itself, different procurement options do affect the overall purchase cost. The right approach can, therefore, help protect cash flow or free up capital to invest elsewhere, if needed.

Do the numbers

Some operators confidently will build the business case for their shredders and will know how to continually tweak and optimize their processes to maximize margins long into the future. Others will have comparatively less experience, or they may simply be keen to learn from the experiences of their peers.

Organizations should speak to operators using the same shredders and processing the same recyclables so they can refine their specifications based on the findings and insight of others. Of course, innovative companies want to break new boundaries; but, in terms of a financially secure starting point, why reinvent the wheel when it comes to what to look for in the shredder?

Being more resource-efficient and more profitable often go hand in hand. Operators should, therefore, think carefully about how to maximize the margins that their shredders are able to achieve and—if in doubt—they should speak to manufacturers to answer the questions for them.

The author is president and CEO at Untha Shredding Technology America Inc., Hampton, New Hampshire. Visit www.untha-america.com for more information.