Riverside junk sails for use in Asia
10:00 PM PDT on Sunday, May 20, 2007
Between the 1940s and 1950s, Russian immigrant Nathan Fankel sold cast off metal, old cotton, linen, animal pelts and hides to mills and furriers from his Buffalo, N.Y., scrap business.
Nearly six decades later, his grandson, Danny Frankel, is running the third-generation family scrap venture in Riverside, a recycling company transformed by the industry's growing role in international trade. Riverside Recycling derives 60% to 70% of its business exporting castoff copper, brass, aluminum, stainless steel and other materials to Pacific Rim foundries and smelters.
A division of Riverside Scrap Iron & Metal Corp., Riverside Recycling processeses more than 30 million pounds of scrap metal a year. It ships about 50 containers a month to China, Taiwan, Korea, Japan, Indonesia, Singapore and other Pacific Rim countries, Frankel said. Each container holds 24 or 25 tons of material, he said.
The company buys most of its scrap material from manufacturers including Riverside recreational vehicle maker Fleetwood, CalTrans, the cities and counties of Riverside and San Bernardinoand other industrial and government customers.
Riverside Recycling also operates five consumer recycling centers in Banning, Redlands, Coachella, Hemet and Huntington Beach. Residents, plumbers, electricians and others bring soda cans, plastic bottles, aluminum window frames, copper pipes and other items for recycling.
China is its biggest export market, Frankel said.
This fall, Frankel will fly to China and visit one of his largest customers, whom he declined to identify. The organization has been a Riverside Recycling customer more than 20 years. The customer buys 100 or so containers annually of recycled copper, brass and aluminum from the Riverside company, resulting in millions of dollars of revenue.
Danny Frankel inherited the business from his father, Sam Frankel, who inherited the company from his father, Nathan Frankel. Nathan came to United States seeking shelter from religious persecution and lived in many areas of the country. In 1954, Sam Frankel returned to Los Angeles where he had attended high school, but determined it was too crowded for a scrap business. He discovered Riverside and opened Riverside Scrap Iron & Metal Corp. in 1954.
The China trip will be Danny Frankel's first to that country. The journey may bring Riverside Recycling more foreign business. "He's in an industrial zone and perhaps we can locate some other buyers," Frankel said. U.S. recyclers boomed over the past 15 or 20 years as growing Asian economies grew hungry for commodities while U.S. mills closed.
Frankel bases his prices on daily commodities prices listed on the London Metal Exchange and the New York Commodity Exchange.
After 35 or so years watching the ebb and flow of the exchanges, Frankel has a good feel for their future direction. Typically iron and steel prices remain static through the month, while copper and brass prices might change every two weeks or so, he said.
Riverside Recycling sells boxes, bales and containers of material to mills and foundries in the U.S. and overseas. In its early days, the plant supplied recycled product for local steel mills, including Kaiser Steel in Fontana. But stringent state air quality regulations put many of the company's scrap steel and iron customers out of business, Frankel said.
Survived the '80s
While scrap flowed in for processing, demand for ferrous metals was low. "Prices fell dramatically," Frankel said. Meanwhile, copper and brass mills and aluminum smelters became fewer nationwide, he said.
Riverside Recycling began developing its foreign sales in the 1980s to mitigate the loss of domestic customers.
Riverside Recycling forayed into foreign exports when Sam Frankel took a trade junket to Taiwan in the 1970s. The trip generated business for the company and kicked off its push into foreign markets, Frankel said.
Some of those initial Tawainese customers remain clients of the Riverside firm.
Riverside Recycling's international sales activities won the company the Exporter of the Year award from the Inland Empire International Business Association during the innaugural World Trade Month event at the Riverside Convention Center May 9.
Riverside Recycling's May 15 offers for recycled goods ranged from 9 cents a pound for California redemption value glass to $2.25 a pound for copper. Offers per ton ranged from $35 for cardboard to $145 for steel.
The company may change the prices it pays for scrap at any time, Frankel said. "What happens with prices around the world affects me," he said.
Company trucks take the material to Riverside Recycling's headquarters on Sixth Street in Riverside where machinery crushes it into 1,500 to 2,500-pound bales or shreds and dismantles it into cardboard crates and shipping containers. The firm has 50 to 60 employees, 10 trucks, cranes and othe equipment. Its fleet collects scrap steel, sheet metal, cardboard, plastic, glass, aluminum and other materials from industrial and government customers. They leave behind empty bins for refilling.
Riverside Recycling's trucks haul shipping containers loaded with scrap steel, copper sorted by grade and other material to ports in Long Beach and San Pedro
Riverside Recycling is the "oldest and largest" company of its kind in Riverside County, Frankel said. While other scrap metal dealers and recyclers operate in the region, "how much they handle and where they go, I really don't know," he said.
Riverside Recycling accepts copper and other high-value products only from verifiable businesses to avoid product stolen from construction sites and other areas.
Thieves, eager to cash in on the high price of copper, rip wiring and fixtures from construction sites and even from live electricity boxes to sell to recyclers and scrap dealers.
Thieves have stolen from the recycling plant itself. The problem has prompted the installation of alarms and locks on materials.
Frankel is a member of a committee Riverside County established May 8 to find ways of mitigating thefts of aluminum, brass and copper.
The committee has 90 days to recommend to the board of supervisors methods for preventing thefts, including education and possible new laws.
Riverside Recycling has an unblemished record. "I've never been charged or accused of buying stolen material. Over the years we've developed a lot of checks and balances," Frankel said.
Incidences of copper thefts rise and fall along with its selling price on commodities exchanges.
"When the prices go down, thefts decrease considerably," Frankel said.
The problem did not afflict the company during his father's day. "Unfortunately it's a relatively new phenomenon," Frankel said.
