Written by Katie Foley

Photograph supplied by Macaulay Metals

A handful of professions would lay claim to being ‘the world’s second oldest’. Among them: espionage, philosophy and politics.

Among the dirty and unpopular jobs, the hard graft, is one that was surely up there with the early vocations. In Caesar’s day they melted down and recycled arrow heads, shaped and re-shaped iron.

That’s the beautiful thing about scrap metal: it is useful again and again – reformed and re-used.

As a modern industry, scrap metal traders tend to lag behind the innovations or progress of wider industry. In New Zealand it’s a “blokey” and practical kind of trade. Most scrap metal businesses in this country would rather buy a digger than a procurement system, Phil Springford, CFO of Wellington’s Macaulay Metals says.

Macaulay Metals is one of the largest players in the New Zealand market, second only to the Auckland-based multinational Sims Pacific Metals. The company has been operational since 1959 and is Kiwi owned and run.

In addition to their scrap yard and hub in Seaview, Lower Hutt, the business has four other spoke yards around the country employing a total of 101 staff: Kawerau, Whakatane, Rotorua and Palmerston North.

Visiting their Seaview yard is like calling on a particularly diligent hoarder hard at work on a grand scale. They send a mass export around every three months when they simply run out of space.

As well as their aforementioned February 2010 mass export – 19,200 tonnes in one go – labelled Wellington’s largest-ever volume export by a single supplier, Macaulay Metals also won the export award at the 2010 Hutt Valley Chamber of Commerce Business Awards.

Their scrap metal comes from far and wide and in a wide variety of shapes and sizes: “We’ve got de-registered cars and roofing iron out there; I just scrapped my old toaster yesterday,” Springford says.

“On the ‘heavy’ side we’ve got railway iron, the beams that go into your house, there’s an old plough out there . . . I’ve seen a helicopter, a plane, buses, ambulances. We buy old copper pipes out of houses; we will buy the lead off roofs, aluminium flashings, aluminium extrusion off windows and car batteries.”

Their main export markets are South Korea, Indonesia, Vietnam, Japan, Holland and China. About 20 per cent of their product stays in New Zealand.

The mammoth mass export a year ago was destined for South Korea’s Dongkuk steel mill, which is a good example of the global scrap metal industry’s circular nature. Some of the steel parts for Makara’s wind turbines were imported from the Dongkuk mill – it’s entirely possible they were made from the scrap metal exported by Macaulay Metals.

The industry is traditionally a down-to-earth one. Springford says he thinks part of its appeal lies in its physicality.

“It is actually a physical product as opposed to an Enron share, so people can actually touch it and feel it,” he says. “There’s a value in that and people can actually understand it. It’s quite a simple business.”

While it is a relatively simple business model – primarily about cash-in-bank as opposed to leveraged debt – scrap metal traders overseas are taking some big steps in product and process innovation, and it is to these sorts of examples that Macaulay Metals looks to further its own innovation.

Two ATM-type systems implemented in their Wellington yard were the result of collaboration with a Canadian software company. Macaulay Metals had the only two in Australasia, before the Australians decided to follow suit.

The system has turned what used to be primarily a cash-based business into something more secure, with all barcode, personal and photographic details being kept digitally. Naturally, Springford says it took a while for suppliers to adjust.

“The online thing, how long’s Telecom and Contact Energy been doing that for? Years. It’s not exactly rocket science, but when we introduced it into our industry [suppliers] were like, ‘oh – just send me a paper one’.”

Macaulay Metals was also one of the first companies to use container tippers to speed up the process of loading scrap into shipping containers safely and quickly.

On the large-scale, high-tech side of innovation, Macaulay Metals are in the early phases of talks with Wellington institution WelTec, who have specialisation in high-power water cutting. The application for Macaulay Metals would be in cutting long, heavy metals like railway track which need to be in smaller pieces to be saleable, and for which the current methods for cutting fall short.

Macaulay Metals has a powerful shear attached to a Caterpillar digger, but it is not strong enough to cut railway line. It takes one man a long, hot day to cut a 15 metre-long piece of old railway track into the necessary one metre square pieces using a gas torch similar to a welding torch. The use of extremely high pressure water to cut steel would cut out many of the problems associated with using those methods.

“If we get it working right then it will be more environmentally friendly and will cut just as well as the gas, and you will need less training and you can actually recycle that water around and around and around,” Springford says.

With the steel cut efficiently into the correct lengths, Macaulay Metals can sell it at a higher price, thus continuing to maximise the export earnings from their lucrative trash-to-treasure business model.