Wire In Secondary Metals Out

The processing of electrical and telephone wire to recover the metal within has come a long way over the past 30 years. The Mallin family of Kansas City, Mo. has both witnessed and taken part in a great deal of that technological progress.

The Mallins made a decision in the late 1960s to focus on wire processing, and have subsequently established Mallin Bros. Co. Inc. as one of the leading national processors of copper and aluminum recovered from electrical and telephone wire and cable.

FAMILY TIES TO WIRE AND SCRAP

The Mallin family has been in the scrap metal business since the late 1920s, when Harry G. Mallin began the Mallin Junk Co. in Kansas City in 1928. The company made it through the lean Depression years and stabilized in the booming post-World War II era. (Harry’s brother Joe joined the company at that time.)

Mallin Bros. has remained a family firm with the welcoming of two succeeding generations. Current chairman Larry G. Mallin is Harry’s son, while president Jeffrey K. Mallin—son of Larry and grandson of Harry—represents the third generation.

The sense of family is strong at the company, with young family members spending plenty of weekend and summer vacation time at the company site. “I started at a very young age,” recalls Jeffrey. “As a matter of fact, I still have my first paycheck—framed on my desk—from 1996, when I was seven years old.” According to Jeffrey, the check was for $2.00 for eight hours of work at 25 cents per hour.

While Jeffrey’s own children (one daughter and one son) are too young to add to the payroll just yet, they have already become familiar with the piles of wire and the boxes of choppings found on the Mallin Bros. work site.

As the potential next generation becomes more familiar with the workings of scrap and wire processing, previous generations are not forgotten. The desk of company founder Harry Mallin, who died in 1995 at age 94, remains undisturbed in the spot where Harry conducted business.

For Larry, Jeffrey and others at the company, it serves as a reminder both of Harry’s 60+ years of hard work in the business and of the business philosophy he instilled in the company.

“I think that two of the most important things my dad taught me were: keep your word and always try to make a profit,” says Larry. “Now that may sound kind of silly,” he says of the second lesson, “but in this business there are always people—in terms of bidding—who will take things on and hope that things will get better. We’re not speculators. We are constantly in the market to buy, but we try not to engage in marginal activities.”

Larry is now in the patriarchal role at Mallin Bros. and—through weekly breakfast meetings and other opportunities—has allowed Jeffrey to come away with lessons learned from his own father. “Integrity and honesty, without a doubt,” says Jeffrey of the qualities his father has instilled in the company. “That and hard work. He has shown me through his life that it takes working hard every day to make a good, honest living. The harder you work, the luckier you get,” he adds.

Jeffrey credits his mother, as well, for reinforcing the importance of honesty. “My mother told me that if you tell the truth, you don’t have to worry about having a memory,” he notes. Subsequently, he says of the company, “Our word is good. When we make a deal with somebody over the phone, it’s an oral commitment. The deal is the same despite, say, falling copper prices.”

TESTING THE CHOPPING WATERS

1964 proved to be a key year in the company’s history. That was the year the company started a research project focusing on wire processing equipment. “We had customers who were wire manufacturers, and at that time we were processing their material,” says Larry. “We felt that in order to do it environmentally safely, we would have to go into wire chopping—and we were right.”

Prior to the adaptation of agricultural husking technology to strip the insulation away from copper wires, wire was often burned in open piles as a first step toward processing the metal within. As stripping and chopping machinery was introduced on the market, the Mallins were among the first to study and—in many cases—utilize the new technology. The decision to pursue wire processing as a primary aspect of its business has paid off for Mallin Bros., as the company now finds itself among the leading wire processors in the nation.

The company has built a broad and stable base of clients from throughout the U.S. and Canada, and may process as much as 50 million pounds of wire in 1998. Larry estimates that about 58% to 60% of the wire processed currently is copper wire, while aluminum wire and cable makes up the balance. While copper is still the leading commodity, aluminum continues to increase its presence in the wire and cable industry. “I think when we started with chopping, it was probably 80% copper and 20% aluminum,” says Larry.

There are now four wire chopping lines in operation at Mallin Bros., two dedicated to each type of metal. While supply and demand can shift suddenly, Larry described conditions in mid-1998 by saying, “the demand right now is very strong for aluminum, but not so strong for copper. We have been fortunate to keep our copper pipeline full, but aluminum is a little more difficult.”

Processed copper choppings are shipped to brass mills and copper refineries while aluminum choppings go to steel mills, to consumers who will use the choppings for chemical applications and to high-purity casting operations. The company also does a significant amount of toll processing.

The company’s ability to prosper in its chosen segment can be charted through the growth of its plant and equipment. In 1975, the company outgrew its former location in a near-downtown Kansas City neighborhood to move to its current 7-1/2 acre site on Kansas City’s northeast side. “We were sitting on about two acres of ground on two sides of a street,” says Larry of the former location. “We needed to expand. We were very fortunate that we were able to purchase ground with seven acres and a building on it that we did not utilize. We built a new building specifically for our operations.”

At its current site, about two dozen Mallin Bros. employees operate four chopping lines located inside a 37,000 square foot building. (The building was expanded just last year, when 10,000 square feet of operating space were added.)

Beyond the growth in square footage and acreage, the company has been able to increase processing volume steadily by making wise equipment purchasing decisions.

KEEPING AHEAD OF THE TECHNOLOGY CURVE

“I think that we have been processing wire mechanically for 30 years, and there has not been a single year without the addition of new equipment and greater efficiency,” says Larry Mallin of his company’s commitment to be informed and active purchasers in the equipment market.

While both Larry and Jeffrey Mallin claim a conservative business approach, that conservatism does not include an aversion to pioneering new equipment—after adequate research has been performed. “We do testing,” says Larry. “We fly out and physically observe the operation of this equipment. We send samples of our material to have it processed and then analyze the results here.”

The Mallins credit their purchases with providing them with a competitive advantage in terms of productivity (choppings produced per hour) and product quality (percentage of material recovered from a given wire shipment).

At no time has Mallin Bros. Co. felt that the research process has reached an end. Buying new equipment to increase productivity continues on a regular basis. Larry notes that “a new shredder we put in last year has increased our production by 20%.”

Another benefit to running new equipment can be a decrease in downtime. Combined with a strict maintenance regimen, the presence of new equipment helps the firm keep downtime to a minimum, says Jeffrey. “The maintenance is one of the keys to being efficient. Minimizing downtime will always be a challenge, since all of the equipment is basically self-destructing vibrating equipment. Screens, knives, and even bearings have to be replaced as soon as they reach a point where they are hampering product quality and productivity.”

Despite the number of years they have in the industry, research has not necessarily become easier, Larry notes. Another challenge is recruiting and retaining skilled employees in a tight labor market. “Understanding the machines requires more knowledge. As we get into the computer-driven equipment age, we need people with electronic and mechanical skills,” says Larry.

MINIMIZING THE AGGRAVATIONS

When Larry Mallin describes his business goals, he invariably lists providing his customers with an “aggravation-free” experience. “The primary reason for our success altogether is the fact that Jeff and I are very, very active in insisting on quality control,” says Larry. “The customers that we sell to consider us aggravation-free. They know if we say we’ve got a load of chops coming in a particular category, they will be in that category.”

The qualities of honesty and integrity seem to produce the aggravation-free climate the Mallins have established. “I think integrity is the key,” says Larry. “The knowledge of dealers and wire manufacturers that whatever they send in, they’ll be paid for is vital.” The company prides itself on its scrupulousness in providing accurate recovered content reports to its customers. The quality of the reports has yielded long-lasting relationships with satisfied customers on both the buy and sell sides who stick with Mallin Bros. Co. in good markets and bad. “Price adjustments are difficult when prices are in a negative trend,” says Larry. “But the relationships that have been built up for 70 years with consumers enable us to be competitive in down markets as well as up.”

“I have tried to solidify those relationships,” adds Jeffrey. “Plus our yields are so good—we squeeze every ounce of metallics out of their material. We enjoy a lot of repeat business, so I think we’ve been successful.”

The long-term, stable relationships have helped Mallin Bros. Co. thrive even as the wire chopping market became more crowded. “In the last ten or 15 years it has really become more competitive,” says Jeffrey. “There are a lot more people doing it. For those of us who have been doing it for an extended period of time, we have an established customer base. People are comfortable and satisfied with us.”

The years of experience provide one more edge. “Knowing a particular type of wire when you see it—knowing that it’s not just a glob of wires—and knowing how to adjust the machines, those are important factors,” says Jeffrey. “There are some advantages that we feel we have gained after 30 years of experience.”

In addition to Larry and Jeffrey’s own knowledge, they are quick to tap into the minds of those working for them. “I do a lot of ‘management by walking around’,” says Jeffrey. “I walk the plant at least every half-hour—19 or 20 times a day .Dad does the same thing. It’s not that we don’t trust our people, but we care about what’s going on. And they’re a good source of ideas on how we can do things better. We always want them to use not only their backs, but also their brains.”

TAPPING INTO FUTURE WIRE

Mallin Bros. Co. has enjoyed several straight years of growth in the volume of wire processed, but are there threats to the future of wire processing?

“Certainly, I think the use of fiber-optic wiring is a trend that will continue,” says Larry. “But I don’t think there will ever be a time when all telecommunication wire is fiber-optic.”

Jeffrey agrees, saying, “Long-term, it’s a minor concern, not a major concern. There will always be applications for copper wire and aluminum wire. I’m comfortable that in the next decade or two, there will still be a steady supply of wire to process.”

The duo also expressed optimism about their ability to maintain Mallin Bros. Co. as a family business. Regarding interest from consolidators, Larry says, “We have had offers, and we consider everything, but at this point we have not expressed any interest in selling the business.”

Might the Mallins themselves consider expanding beyond their one facility? “Yes, we might consider it,” says Larry. “We’ve been flattered to have customers ask us if we would open a facility closer to them. I guess the primary difficulty—because of our approach—is the inability of one of us to be there,” he says of himself and Jeffrey. “But we have some wonderful people in operations and management, so it might not be completely out of the question.”

Meanwhile, the Kansas City area still contains a number of family-owned scrap operations in addition to Mallin Bros. Co., and Larry believes it may well stay that way. “I think that merger-mania may be cooled to a great extent by some of the problems that these consolidating companies are experiencing now.”

Jeffrey says he won’t force his children to take an interest in the family business, but nor will he discourage them. For him, arriving early each weekday morning to prepare for the day ahead is still something he enjoys. “It’s still something I like—coming into work every morning at 6:30. That’s a terrific thing about this business, there is something different every day. It’s not boring.”

The author is managing editor of Recycling Today.

Sidebar

A Central Location

Kansas City may be a long way from both the lights of Broadway and the surf of California, but as a scrap processing location it has its advantages.

“Geography has a great effect on scrap processing decisions,” says Larry Mallin. “Freight costs are very difficult to get around.”

Mallin Bros. Co. is situated halfway between the copper belt of the western U.S. and the industrial population centers of the Midwest and Great Lakes regions. The location is far enough away from many wire manufacturers (many of them out West) and scrap dealers in the Great Lakes region that Mallin Bros. is seldom the closest processor available. But it is close enough that they can and do get their foot in the door.

“There are people who would like to send us material but who can’t do it,” says Larry Mallin. “But if we get one load from a dealer, we can then usually buy it for many years.”

While there may be added freight costs involved, if Mallin Bros. can improve the metallic yield, they are still close enough to overcome those freight costs. (Nonetheless, the Mallins have not ruled out seeking a facility or facilities to serve customers in other markets.)

For the Mallin family, Kansas City also provides a competitive environment of family scrap businesses. “Kansas City is still a family scrap town,” says Jeffrey Mallin. “We’ve come to the conclusion that we all have our own special niches, and we can make referrals to other companies. When things do get bid out, I can usually say that we are competing against other good companies.”