To give you an idea of volume, the global market purchased 400 million tons of scrap materials in 2017. Our share of that was 14 million tons. That is a lot of manual inspection! We buy about 280,000 tons of scrap per month in Brazil, amounting to over 10,000 truckloads!
Each truckload of scrap is brought to us, containing up to 200 different types of scrap materials. Upon site entry, each truckload is weighed and the weight is immediately recorded into our ERP software, SAP. Then, the truckload is emptied into a pile in the scrapyard or meltyard. A scrap inspector visually analyzes the material, refers to a manual to determine standard pricing and value, and then records an estimated value onto the same ERP software, utilizing a tablet/smartphone app. Each type of scrap is assigned a different monetary value depending on the metal type, size and density. Any debris found in the truckload is considered a penalty and value is deducted. The scrap inspector must act fast, because within 15 minutes of dumping the load, cranes will get to work organizing the scrap materials into areas of like metals that already exist in inventory. Due to space constraints and scrap provider expectations for quick service, it is very important that the trucks can get in and out in a reasonable timeframe.
The way scrap is inspected today has a lot of room for improvement. The current method is very subjective, highly influenced by the personal opinion of the scrap inspector. This leads to inconsistencies in pricing. Additionally, our process requires manual review which is timely and likely inaccurate.
The Key Challenges we face day-to-day that impact our progress are:
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Headquartered in Sao Paulo, Brazil, Gerdau is the largest producer of long steel in the Americas, and the 14th largest steelmaker in the world.
Did you know that steel is an endlessly recyclable material?
We believe in the transformative power of social projects and are committed to protecting and respecting the environment. This challenge is one of our many initiatives designed to promote sustainability in our industry.
Most of the scrap recycled by our company comes from materials that are no longer used by the community, such as: stoves, refrigerators, and old cars. Also, we recycle the steel resulting from the production process of industries such as automotive, packaging and appliances. This material is recycled into new steel products, which are present in the everyday lives of millions of people.
The use of steel scrap as raw material in our production process reduces the consumption of energy in the steel process and consequently, it minimizes emissions of CO2. Moreover, we generate jobs for thousands of people through an extensive chain of scrap collection and processing for recycling. We also contribute to the preservation of the environment and reducing the amount of material deposited in landfills and inappropriate sites.
For us, recycling is not just a minor initiative for environmental protection, it is a major part of our overall business strategy. Every year, we transform more than 14 million metric tons of steel scrap into new steel present in the everyday lives of millions of people in many ways.
Each truckload contains classifications of materials that typically fall into 1 of 3 categories: HMS, P&S or debris. HMS, otherwise known as Heavy Melting Steel, contains items like ovens, refrigerators, or car bodies that can be melted down and quickly reused. P&S, or Plate and Structural Steel includes metal that is structural, often coming from a demolition. This metal can require shears to break down for reuse. Last, debris is valueless material that must be estimated and discounted from the overall value of the truckload.
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