Rodolfo Camarillo Montemayor and the leadership team at Roca Acero, a scrap processing firm based near Monterrey, Mexico, have invested in a 2,500-horsepower metal shredding plant that is allowing the firm to broaden its already considerable presence in that northern Mexican city’s scrap sector.
CEO Camarillo, who founded the company in 1985, is part of a leadership team at Roca Acero that also includes Chief Financial Officer Mario Tijerina, Commercial Manager Lizette Camarillo and Operations Manager Jesus Flores.
The company’s willingness to invest in the multimillion-dollar shredding plant and downstream sorting systems is part of a dual strategy to commit to its core ferrous scrap customers while also diversifying the company in several ways.
A wider horizon
Camarillo says the Mexican scrap industry historically has been separated into regional sectors and along ferrous-versus-nonferrous lines in a way that likely would sound familiar to veteran scrap recyclers in the United States or Europe.
“Historically the markets in Mexico have remained focused on fulfilling mainly the local demand of steel mills,” Camarillo says about the approach taken by most ferrous scrap recyclers in that nation.
The approach, however, can limit the perspective of a given company and its ability to invest in new technology. Says Camarillo, “This scenario has shaped the strategies of scrap companies that sometimes do not follow international practices.”
Roca Acero and its executive team have identified reasons why they need to move beyond this long-time order of things. “Nowadays local markets need to be more competitive in order for supply to cover their demands,” Lizette Camarillo says. “We are looking to diversify our products and reach markets with higher added value.”
The company researched installing an auto shredder for two years before deciding to work with United States-based Wendt Corp. on the 2,500-horsepower shredder and downstream system that came online in January 2017.
The company’s traditional mix of material has been 75 percent industrial scrap and 25 percent what Camarillo calls “mixed urban scrap,” most of which is obsolete material. The addition of the shredding plant already is changing that percentage by allowing Roca Acero to handle a much wider range of obsolete scrap.
As of early 2017, the company is “shredding mostly mixed scrap; No. 2 heavy melting steel (HMS) is primarily what has been feeding the shredder, together with a small percentage of end-of-life vehicles,” says Manuel San Sebastian, international sales manager of Wendt Corp.
The U.S.-based equipment supplier worked closely with Roca Acero to design and install a system that the vendor says will help the Mexican scrap company compete in ways that will bolster its market share in the competitive northern Mexico region.
A tailored fit
Many of the shredding plants Roca Acero considered initially seemed too large for what the company had in mind, San Sebastian says.
He says that during its two-year research period, Roca Acero “considered used equipment for economic reasons, but the equipment available on the market had larger capacities than what the customer was looking for, and they were concerned about the risks involved with purchasing used equipment.”
As it switched to considering new equipment, San Sebastian found that Roca Acero quickly was receptive to learning more about Wendt Corp.’s modular M6090 model. “After a visit to one of our existing M6090 shredder plant installations in the U.S., the benefits of our modular design and the processing capabilities of the model met the customers’ expectations,” he says.
When Camarillo is asked, several months after the installation is complete, what aspects of the Wendt M6090 led to his purchase of that model, he directly replies, “The modular design of the shredder plant.”
“The lower operational cost of our modular M6090 [provides an] advantage in the shredder marketplace, not only in Mexico but in any region of North America,” San Sebastian says. The lower operating cost, he says, “allows the customer to work more aggressively on their freight operation, and Roca has a strong presence in all regions close to the Monterrey area. So, for sure, now having a shredder coupled with several feeder yards will strengthen its market share.”
While Roca Acero takes the quality of the metals recovered in its downstream system seriously, the company also benefits by making a modest initial investment that it can bolster later.
Roca Acero immediately was receptive to “Wendt’s ability to provide expandable plant solutions and install a recovery process in phases as its shredding operation and capacities grow,” San Sebastian says.
In an era of potentially heightened trade tensions, the sale of the Wendt Corp. shredder to Roca Acero points to a successful cross-border transaction.
“At this moment, the NAFTA (North American Free Trade Agreement) trade agreement helps American companies looking to expand their business in Mexico,” San Sebastian says in April 2017. “In general, besides normal customs or different border practices, together with facing some cultural differences being the first Wendt shredder sale in Mexico, the whole project went pretty well.”
San Sebastian credits the staff at the company for handling the nuts and bolts of the project. “Although challenging, Wendt has a logistics department very capable of handling the complexities of a cross-border project such as this one,” he comments. “In addition, we have solid partnerships with companies like (United States-based) C.H. Robinson, who was the main logistics contractor on this project. The project involved the transport of more than 1 million pounds of steel on 45 separate trucks.”
Currency fluctuations also can make cross-border trade tricky, San Sebastian says. “Financially, the latest U.S. dollar-Mexican peso fluctuations definitively affected the project, but customers can be protected by checking with their banks for insurance that protects them against big fluctuations in the exchange rate once they want to sign an order,” he comments.
Several months after the project’s completion, Lizette Camarillo states, “The installation of the shredder definitely gives us the advantage to acquire and process larger volumes of scrap, with the additional benefit of being able to reach the requirements of our customers by offering a product that is higher quality, dense, clean and easier to handle.”
The author is editor of Recycling Today Global Edition and can be contacted at email@example.com.