[Congressional Record Volume 147, Number 90 (Tuesday, June 26, 2001)]
[Extensions of Remarks]
[Pages E1212-E1213]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          TRIBUTE TO HUGO NEU

                                 ______
                                 

                        HON. FRANK PALLONE, JR.

                             of new jersey

                    in the house of representatives

                         Tuesday, June 26, 2001

  Mr. PALLONE. Mr. Speaker, I would like to ask my colleagues to join 
me in congratulating Hugo Neu Schitzer East, one of the largest scrap 
metal recyclers in New Jersey, for their proactive efforts to improve 
industrial recycling.
  The Hugo Neu Schitzer East Company has been operating in Port 
Liberte, New Jersey for the last 40 years. They have invested several 
million dollars in research and development, attempting to find new and 
better ways to mine and recycle waste metal. They have done so with the 
goal of reducing the amount of scrap metal that needs to be disposed of 
in landfills.
  For example, almost a quarter of the metal produced by the shredding 
of an automobile cannot be recycled and needs to be disposed of in a 
landfill. Hugo Neu is working to dispose these waste materials in a 
more environmentally sound manner, as well as find ways to recycle and 
reuse a larger portion of scrap material.
  I ask to submit an article from the Business News New Jersey that 
better outlines Hugo Neu's efforts on behalf of the environment.

   [From the Business News New Jersey, Jersey City, NJ, June 5, 2001]

                Scrapping Old Ways and Look for New Ones

                       (By Geeta Sundaramoorthy)

       John Neu and Robert Kelman like to say jokingly that they 
     are still trying to figure out how to make money after being 
     in the scrap metal recycling business for 40 years. As part 
     owner and general manager, respectively, of Hugo Neu 
     Schnitzer East, one of the biggest recyclers in the region, 
     they may only be half joking.
       Jersey City-based Hugo Neu buys scrap metal from auto 
     dealers and construction companies, then shreds, processes 
     and ships it to customers for use as raw material in making 
     steel. With international prices of scrap funding to historic 
     lows and costs going up, scrap metal recyclers, including 
     Hugo Neu, are finding it hard to keep the revenue flowing in 
     from their core business.
       The company has annual revenues of about $170 million, 225 
     employees, and handles 1.3 million tons of scrap annually in 
     the New York metro region. It says it is the region's largest 
     exporter of processed scrap.
       According to Kelman, in the last 18 months scrap prices 
     have dropped from about $130 per gross ton to less than $80, 
     a 38% falloff. International demand for scrap has also fallen 
     as Asian economies hit hard times, competition increased from 
     Russia and domestic demand decreased as cheap imports of 
     steel pushed many U.S. steel makers near bankruptcy. Strict 
     environmental standards for the disposal of waste and higher 
     wage and energy costs are also pushing the costs up, he 
     points out. ``We are squeezed into a box,'' says the 62-year-
     old Neu.
       Their neighbors, which in Hugo Neu's case include the 
     residents of the Port Liberte condominium complex, on the 
     Jersey City waterfront also don't much appreciate the noise 
     and grit associated with recycling operations.
       So Neu and Kelman, as well as other recyclers, are now busy 
     looking for ways to diversify their revenue stream. Hugo Neu 
     is looking for ways to recycle new materials, especially the 
     waste left behind after the current processing is done, and 
     for new lines of business to enter.
       Hugo Neu is spending $20 million to dredge the channel 
     leading to its Claremont terminal pier facility in Jersey 
     City to a depth of 34 feet so it can use its port and crane 
     facilities to off load freighters carrying break bulk metal 
     cargoes such as rods, rails and other steel products. The 
     company is splitting the cost of the dredging project with 
     the state and work is slated to be finished in 18 months.
       Hugo Neu is not the only scrap recycler looking to 
     diversify into break bulk cargo. Newark-based Naporano Iron 
     and Metal, a unit of Chicago's Metal Management which is 
     close to emerging out of Chapter 11 bankruptcy, also plans to 
     boost its stevedoring business and handle break bulk cargo at 
     its Port Newark facility. Last month, the company won a 
     battle against the International Longshoremen's Association 
     to use its own labor for loading and unloading some break 
     bulk cargo.
       John Neu's father, Hugo Neu, who is considered a pioneer in 
     the scrap recycling industry, started the family business in 
     the early 1960s. It split in 1994, after Hugo Neu's death, 
     with John Neu getting the scrap metal operations and half the 
     real estate business. John Neu, now CEO of Manhattan-based 
     Hugo Neu Corporation, formed Hugo Neu Schnitzer East in 
     1998--as a 50% joint venture with Schnitzer Steel Industries 
     of Portland, Oregon. It is now Hugo Neu's largest operation, 
     and is run by Kelman, 38, who is Neu's brother-in-law.
       Kelman concedes the scrap business is dusty and noisy and 
     some neighbors have a legitimate grouse about noise. Port 
     Liberty is about 1,000 feet from Hugo Neu's Claremont 
     terminal, and is separated by a channel, where the recent 
     dredging work has only increased residents ire. Our business 
     involves processing and transportation. It is an 
     environmental issue. ``People say why do we need to have a 
     scrap processing business in a residential area?'' says Neu, 
     adding that most scrap is generated in the New York metro 
     area. ``It has to get out of the city and come to the docks 
     in the New York harbor.''
       Kelman says his company's port has been operating for more 
     than 40 years, whereas the Port Liberty residents came only 
     12 years ago. ``There is only so much we can do to minimize 
     the impact,'' he says, adding the company has even built a 
     container wall to keep the operations out of the sight of 
     residents. The question is whose impact will be greater for 
     the economy, ours or the residential units, he asks.
       Jersey City has, in a way, answered that question by 
     choosing to keep that part of waterfront reserved for 
     industrial use. AnneMarie Uebbing, director of the city's 
     department of housing, economic development and commerce, 
     says it has supported Hugo Neu's dredging project, 
     recognizing the importance of Claremont as an international 
     port, especially when Hugo Neu starts bringing in more ships 
     carrying break bulk cargo. Uebbing says the city supports 
     industrial development that can arise around the port, 
     including warehousing and manufacturing.

[[Page E1213]]

     ``We see port activity in the New York harbor increasing. It 
     is imperative that we maintain our competitive edge.''
       Hugo Neu has also invested several million dollars in 
     research and development to find new ways to ``mine'' the 
     waste metal it produces. About 25% of every automobile that 
     is shredded can't be recycled and has to be disposed of at an 
     environmentally approved landfill, an expensive proposition 
     for many recyclers.
       A year ago, Hugo Neu entered into a joint-venture project 
     with Daimler Chrysler and set up a facility in Utah to do 
     research on recycling plastics. Kelman hopes to announce the 
     results of that research in the next two months. In addition, 
     the company is converting waste from the auto shredding 
     process into landfill cover that reduces its tipping fee--
     money charged by landfill companies for dumping waste. Kelman 
     hopes in the next few years the company will be able to 
     reduce its waste by 50%, with the ultimate goal of producing 
     zero waste.

     

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