Beatty International moves forward with scrap

2013-07-04T06:00:00Z Beatty International moves forward with scrapAdam Madison Times Correspondent
July 04, 2013 6:00 am  • 

HAMMOND | For 97 years, Beatty International Co. has thrived on metal.

It began as a machine shop manufacturing punching and sheering equipment for processing steel, which now reaches international markets. It opened its doors in 1917 during World War I, survived the Great Depression and has stayed strong throughout today’s weak economy. Its most recent venture in retail scrap metal is one way the company has diversified to keep its doors open.

“We always are looking for ways to expand the company,” owner William Beatty says. “If you don’t in this day and age, and things go sour, you are in big trouble.”

Today the company sits on about 14 acres between Calumet and Columbia Avenues on the south side of 150th Street. It is home to the shop that was started by William’s grandfather, W.R. Beatty, but has grown to include mill repair and rental services, warehouse space and leased space to a variety of other companies. William’s son, W.B. Beatty, started Scrap International four years ago and has recently expanded to serve the retail market.

“It really is a thriving complex now,” William says.

As a machine shop, the company always had stakes in the metal recycling game. As a machine producer, Beatty International sold much of its waste metal directly to nearby steel mills, a practice that helped survive the Great Depression. It was a similar experience when it opened Scrap International during the recent recession. While much of the economy struggled, scrap prices were unbelievably high, William says.

“We really got rolling in it,” William says. “China was buying up everything in sight.”

Many small Midwestern steel mills are nearly 100 percent scrap-fed, and most steel products on the market are 95 percent recycled product, William says. Every dealer was making money, but some got greedy and turned to hoarding. They maintained large inventories in anticipation of higher prices. Instead prices plummeted unexpectedly when China stopped buying. Fortunately, Scrap International operated under a different business model.

“We just want our margin,” William says. “We want to get it in and get it out.”

The price of metal fluctuates like raw materials. It even can be used as a “barometer” for measuring economic performance. While higher prices are a positive indicator, they also contribute to the darker side of the business. William says it’s not uncommon for junkmen to roll in with manhole covers stamped with the city’s name.

These folks are given two options: Leave them behind so they can be returned to the sanitary district or leave with the goods while the license plate numbers are turned into the police. “They usually leave them behind,” Beatty says.

To combat thievery, the city of Hammond recently passed an anti-scavenging ordinance, making it illegal to collect debris from alleyways. Mayor Thomas McDermott has defended the ordinance saying that burglars are posing as scavengers when casing backyards, The Times reports. William, who stands to lose 60 percent of his retail business, looks at the ordinance differently.

“All it does is injure and punish the poor, honest folks that are trying to eek out a few bucks.” He adds that these people also have been providing a service to the community. They remove the debris from the alleyways, which now will become an economic burden to the city.

On the commercial side, providing a good price on scrap metal drives down the cost of construction and demolition projects. William says much of the steel from the demolition of Nine Span Bridge on Indianapolis Boulevard is being sold and recycled. Otherwise, the project would have been much more expensive. He recalls another demolition contractor that supplied Scrap International with insulated copper wire. It was able to make a $0 bid for gutting a building. The customer got the job done for free, and the contractor still made $5,000 to 7,000 a week.

Scrap International makes its money by selling at a markup but also by “upgrading” the scrap. Usually this involves stripping it down and sorting it by material and grade. For instance, wire is stripped of its insulation by machine to yield “bare bright” copper, which is the highest grade that sells at a premium. A washing machine will have its motor removed to retrieve copper. Its white exterior, a low-grade sheet metal, is condensed and shipped out in bulk. This material may end up on a boat bound for other countries or be sold directly to nearby steel mills.

While the market for scrap no longer is in its heyday, it remains a valuable contributor to the overall economy and helps reduce landfill waste and exploitation of natural resources. The industry will remain vital to the success of Beatty International, but more energy may be refocused back to machining while an uptick in the automotive industry increases demand for punching and sheering equipment. Through diversification of its products and services, the company should remain as solid as steel.

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