MEMO

To: Dr. Hugh Jack

From: Matt Remelts

Subject: Padnos Tour

Date: 3-18-97

Our tour of Padnos on Tuesday, March 18, revealed a very versatile company. With over 200 employees, they are one of the largest scrap yard recyclers in the world. I believe we must consider them our top contender for the contract. They provide a wide range of recycled products from cast iron to hot briquettes to plastic to paper stock. Padnos is a remarkably vertically integrated company. They have a hand in the whole process from scrap recovery to delivery of the recycled material. I was also impressed with there on-sight machine shop which they use to fabricate the scrap bins for their trucks. Car flatteners, shredders, guillotine shear, balers, trailers, cranes and conveyors are made or fixed in this shop. One of the largest feathers in Padnos' hat, though, is being the first in the industry to receive the Ford Motor Company Q1 award.

The first item of interest that we noticed was the entry gate for incoming scrap. All trucks entering the yard with scrap must pass through this gate. The gate senses for any radioactive material that might be in the scrap. Our guide told us that they actually get only two or three truck loads a year that must be rejected.

The next stop on the tour was the hot briquetter. This is a series of massive operations where they take metal from raw scrap to a dense, low residual briquette with an iron content of 90% or better. It is one of only three in the entire U.S. The raw scrap is fed into a shredder where it is chopped into fine, short strips that are then melted and formed into the final briquette. These are valuable products as they can be used directly as iron ore which can be used in blast and electric furnaces.

The next operation we saw was the sheerer. This is a high powered operation which is used to shear a cross section of scrap that is a good six inches thick. We were taken into the housing for the power source and found that they use four large motors to power the hydraulics for the operation.

Another area that we were shown was the high commodity recovery. This includes such pure metals as copper, aluminum, nickel, etc. They also had a large operation where they processed engine parts such as engine blocks.

All in all, from these observations, I believe that Padnos should be seriously considered as a potential carrier of our scrap and a supplier of recycled products. They are a company with a wealth of experience and the market to prove it. They supervise all areas of processing from recovery to delivery and turn out a quality product as a result.