Staking a Claim

The David J. Joseph Co. (DJJ), Cincinnati, has a 125-year history in the North American scrap market and a trading and operations presence that has continued to grow since the company was acquired by steelmaker Nucor Corp. in 2008.

Among the family of DJJ operating affiliates are six regional scrap processing companies located in different parts of the country.

The western-most of these affiliates is Western Metals Recycling LLC (WMR), which is based in Salt Lake City. WMR has scrap processing and steel mill service locations in Utah, Colorado and Nevada, with another opening soon in New Mexico.

WMR President Jeffrey Davis says the company benefits from the financial strength and integrity of the DJJ and Nucor organizations while also being granted the autonomy to provide services and foster relationships to respond to the needs of the local market.

BUILDING IN THE WEST

Relative to the overall 125-year deep roots of DJJ, WMR represents a recent shoot of growth, having been formed in 1996 with the combination of two existing DJJ facilities with three plants newly acquired from the former Atlas Steel.

WMR has subsequently added to its footprint by purchasing a former Markovitz & Fox location in Sparks, Nev., and in building a new greenfield location in Albuquerque, N.M., scheduled to open in the fall of 2010.

Davis notes that three of the current WMR facilities feature auto shredders as a key part of their processing capabilities, and the company’s plans include eventually installing an auto shredder at the Albuquerque location.

Marketing the ferrous scrap harvested from the shredding process—as well as from other purchasing and processing activities—has traditionally been and remains an important part of what WMR does, says Davis. “WMR has focused on supporting the steel mills of the Intermountain West as its core business objective,” he comments.

According to Davis, that support to mills comes not only in the form of providing an adequate volume of supply, but also in working with them to ensure quality levels that can help the mills succeed. “WMR has worked since its inception to evolve its relationship from that of a simple supplier of ferrous material to that of a value-creating business partner to the mills we serve,” he comments. “WMR knows that its long-term success is inextricably linked with the long-term success of its business partners.”

The drive to produce quality scrap grades with the type of chemistry needed by the electric arc furnace steel mills in Utah and Colorado (a Nucor mill in Plymouth, Utah, and the Rocky Mountain Steel mill in Pueblo, Colo.) has spurred investment in WMR’s downstream shredder systems. “This focus has led us to experiment with non-traditional technologies, including both gamma and X-ray based technology, to enhance ferrous and nonferrous extraction and sorting methods,” notes Davis.

Within that technological mix is what Davis describes as “a state-of-the-art online bulk scrap analyzing process” that identifies the copper content and other metallurgical aspects of its shredded ferrous scrap.

The booming nonferrous scrap markets of the past eight years and the desire to minimize what is sent to the landfill have provided further incentive to WMR to upgrade its downstream sorting systems. Davis says WMR has been working in cooperation with Wendt Corp., Tonawanda, N.Y., to “experiment with light based technologies capable of both extracting and sorting recyclables based on non-traditional properties, such as color, shape or PVC content. As a result, we have seen significant reductions in the volume of materials being sent to the landfill and are optimistic about the future possibilities expanded use of these or similar technologies might bring.”

Like many other auto shredder operators, Davis is not convinced that the best methods to maximize the resource recovery or energy value of the remaining plastics in auto shredder residue have yet been perfected, but he says both WMR and DJJ have staff members who are collaborating with vendors to identify the best solution. “The recovery of plastics is of great interest to anyone in this business, but how the processes work within the emerging technologies and whether any of them are the holy grail—I don’t think we know that yet,” he comments.

LOCAL ASPECTS

Processing capabilities provide one source of strength to WMR, but Davis is quick to note that processing machinery can only stay busy and yield dividends if scrap is flowing into the facilities.

The DJJ business model in that respect is to provide operating affiliates like WMR enough flexibility and decision-making power to compete within their markets as “hometown” players.

That philosophy goes all the way back to 1996, when WMR was founded, says Davis. “DJJ pushed for the management decision-making to stay local, and we try to continue that,” he comments. “One of the tenets we have is to push a lot of the profit-and-loss decision-making down to the location level. We give all of our employees all of the freedom and the latitude they can handle.”

From the Nucor board of directors to the DJJ executive staff and throughout the rest of the corporate chain, Davis says the relationship nature of the scrap business is well understood and the company is structured to allow customer relationships to flourish. “This is and always will be a ‘people’ business, and how we manage the relationships with suppliers, consumers and employees will drive our business success in the future,” he states.

Important employee relationship aspects include WMR’s safety and environmental compliance programs, says Davis. “Safety is WMR’s key core value,” he states. “We have a goal of zero accidents and have comprehensive safety procedures in place, including ongoing extensive training and procedures to ensure the safety of all employees, customers and suppliers.” The Utah Safety Council awarded Western Metals Recycling with the Award of Merit in 2005, 2007, 2008 and 2009, says Davis.

Regarding environmental compliance and health, Davis notes, “All of the WMR plants are environmentally sound and comply fully with EPA regulations.”

Davis’ background with DJJ has involved a progression of job titles that has helped provide him with an overview of how relationships keep employees productive and also keep scrap flowing in and then back out on the sales side.

He started out as a broker at a DJJ office in St. Louis, and then became a brokerage district manager in Salt Lake City before he assumed that same title back in St. Louis.

In 2004, Davis was appointed general manager of the Trademark Metals Recycling facility at the Port of Tampa, Fla. (Trademark is another of the regional processing affiliates of DJJ.)

In 2006, he was appointed president of WMR. He says his wife and three children all enjoy calling Utah their home, though during the winter months some of them recall their Florida years with a little more fondness.

His current role is the most recent in a series of scrap trading and operations management positions about which he says, “I’ve never been burdened with being bored.”

He credits the de-centralized philosophy of DJJ (and now Nucor as well) for helping maintain the interest of its managers and employees. “There are still chances for that entrepreneurial flair that keeps you sharp,” states Davis.

STRENGTH IN RESERVE

Davis says the long-standing relationship between DJJ and Nucor and the corporate culture aspects they have in common have helped minimize changes since the Nucor acquisition in 2008.

A positive aspect of the change is the ability of a publicly traded company like Nucor Corp. to make capital investments in the operations of DJJ and WMR. Those investments can take the form of purchasing large-volume processing equipment or in addressing how ASR is handled.

The path to diverting ASR from the landfill may be challenging, but Davis says it is a path that can be traversed. “ASR, we hope, will not always be a waste product, and we’re working to make less of it a waste product. I think it will require some investment and some corporate will, but it can be done.”

From Davis’ point of view, the financial strength of Nucor combined with its tradition of a preference toward a decentralized management structure (similar to DJJ’s) is an ideal way to operate in the scrap industry.

“It’s been very positive,” Davis says of WMR’s relationship with Nucor since the 2008 acquisition. “We think we had a great relationship with Nucor before the acquisition; now the level of collaboration and innovation has definitely stepped up. It’s been a great experience.”

In the second half of 2010, Davis and the WMR leadership team will be focused in part on preparing the Albuquerque location for its debut. (See “A Vertical Setup in Albuquerque, page 39.)

Beyond that, Davis says adhering to the core missions and activities of WMR keep him active and engaged in his work. “We expect to continue the company policies of promoting core values: to operate safely, honestly and with a high degree of concern for environmental compliance.” He concludes, “We’ve got a lot of passionate people who work here, and we intend to help keep WMR as a leader in this market region.”

The author is editor-in-chief of Recycling Today and can be contacted at btaylor@gie.net.