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Mining the demo stream

Mar 31, 2017 | 08:00 PM | James Lawrence

The art and science of controlled destruction doesn’t come cheap. It costs big money to buy and maintain the tools needed to tear down structures and turn a profit along with a keen sense of the recovery value of the materials left behind

The demolition industry has a long and storied history, one that adds a chapter with every swing of the wrecking ball and has historically been tied closely to the recycling sector.

Over the years, the relationship linking the two sectors has evolved to the point where demolition operations now feed a more diverse
range of materials into the scrap stream than practically any other industry.

Metals recovered out of the waste generated as a result of demolition activities range from carbon and stainless steel to copper, brass, aluminum and zinc. But the list doesn’t stop there. Other items on the industry’s recovery and reprocessing hit list range from bricks, shingles and wood to plastic, paper and glass.

As demolition contractors bid and enter into contracts to demolish facilities that have outlived their usefulness or been targeted
by developers to be razed, they must fully understand the value of all such materials.

Bidding on such structures—whether “the house that Ruth built (old Yankee stadium) or the Tappan Zee bridge to cite two recent examples--requires a comprehensive assessment of the value and volume of recyclable materials residing in the structure(s) to be demolished as well as the estimated overall cost of retrieving those materials.

Understanding the market value of materials such as ferrous and nonferrous metals, bricks, plastic, and other commodities is critical, of course, to maintaining a profitable and therefore sustainable demolition business.

Often times, particularly in the case of older sports stadiums or historic structures marked for 38 April 2017 American Metal Market SCRAP EDITION demolition, value isn’t solely a function of the price of a given commodity. Value can also be realized through the sell of items such as seats, signage, turf, bricks, and other memorabilia.

As is true with their counterparts in the recycling industry, the return on investment captured by demolition contractors is subject
to and heavily influenced by the general health of the economy and industry-specific market conditions.

A drop in metal prices has a direct impact on sales. When consumer orders begin to soften, demand for product follows suit and
that sequence directly impacts the demolition industry.

Time and space constraints add another level of challenge to the demolition mix. Because many demo contractors lack facilities to store and hold inventory, they must move materials in step with the progression of the demolition project at hand. As a result, they are more subject to immediate price changes occurring in the market.

In other words, demolition contractors cannot “play” or attempt to time the market as is often the case with recyclers. And because of that, they are much more sensitive and subject to rising and falling markets in terms of inventories as well as the particular project
in process at any given time.

Since most demolition contracts contain a time clause, contractors must also keep close track of market fluctuations to gain any possible price advantage by completing a given project on time. They must monitor the market and be alert to any sudden changes
or conditions that could alter prices and affect margins.

Besides keeping a keen eye on market pricing dynamics, contractors must pay equally close attention to and comply with various environmental mandates governing the cleanup and remediation of the sites they are working. They must be cognizant of any hazardous materials present at the location.

Actual completion of a demolition project requires a comprehensive environmental sweep of the location and restoration of the
properties to a certified clean brownfield site. The location must meet and adhere to state and federal regulations before it can be made available to the public for any type of subsequent building activity.

No stranger to environmental stewardship, the demolition industry has adopted and pursues what it describes as a “Green” movement, an initiative which focuses on recycling land. Simply put, demolition contractors process the waste-stream for reuse.

The industry describes the movement on the National Demolition Association’s website as a series of activities including “demolition debris recycling, environmental remediation, and architectural salvaging.”

Demolition contractors also actively participate in the LEED (Leadership in Energy and Environmental Design) program. Introduced several years ago, LEED is a “green” thinking, point based system that awards participants points based on sustainability. The program, which requires certification and equips contractors with an approach to manage waste, consists of four rating levels: Certified, Silver, Gold, and Platinum.

A key participant in the rebuilding of America, demolition companies here and around the globe are constantly tearing down the old and making way for the construction of new structures that change the face of cities, states, and countries.

The art and science of controlled destruction doesn’t come cheap. Capital-intensive, the demolition business requires access to and the use of a lineup of costly equipment including cranes of all types, shears, crushers, bulldozers, payloaders, forklifts, sortation instruments, and analyzers.

The lifeblood of demolition operations, such equipment not only represents a significant capital investment but must be well maintained, which comes at no small cost.

As demolition contractors go about their daily business razing structures, the ranks of suppliers selling equipment into the segment have seen thinning due to consolidation.

In a recent move, Brokk, a major supplier of remote-controlled demolition machines and attachments for 40 years, acquired Aquajet
Systems AB, a manufacturer of hydro-demolition robots.

Commenting on the move, Martin Krupicka, chief executive officer of the Brokk Group said the acquisition provided the company “the opportunity to better serve our customers in the concrete demolition and renovation business with a wider breadth of safe, productivity-enhancing technologically advanced solutions.”

In operation, the Aqua Cutter robots “can easily remove areas of loose deteriorated or even sound concrete to a pre-determined depth,” he added.