Safety-Kleen Customers Receive Guaranteed Waste Handling Service

SAFETY-KLEEN Corp of Elgin, Illinois, an international liquid waste service company, has developed a successful competitive stance by offering customers secured waste handling, recycling, re-refining, and disposal, says David J Hanrahan, product manager for vacuum services. That stance helps generate $1 billion in sales annually.

"We don't have outside hands that affect our customers' liability," he says.

The company has a fleet of more than 2,000 trucks that pick up approximately 200 million gallons of liquid waste each year. Although Fortune 500 companies comprise 80% of Safety-Kleen's business, other customers include small corner gas stations. "Our customer is anyone who cleans or degreases parts, or who has collections of contaminated wastes," Hanrahan adds.

Services to more than 400,000 customers include transportation, processing, disposal, recycling, lab packing, plant services, and technical and analytical consulting. Site remediation and spill cleanups are available through third-party contracts.

Company History The company's history in recycled wastes began before government regulations were enacted, says Hanrahan. Founded in 1968 by Donald Brinckman, chairman of the board, the business was launched as a parts cleaner enterprise and soon expanded to a carburetor service and body shop supplier.

About the time the Environmental Protection Agency (EPA) was empowered, companies in the dry cleaning industry approached Safety-Kleen to expedite the disposal of trichloroethane and perchloroethylene, chemicals used as solvents.

"From the dry cleaning experience, we learned that some things cannot be recycled," Hanrahan says. "The parts cleaning services brought a need for mineral spirits recycling, and body shop activities called for answers to accumulated lacquer thinner.

"In response, Safety-Kleen began offering waste pick-up, recycling, and re-refining services. As the re-refining services developed, we purchased a Canadian facility and later constructed another one in East Chicago, Indiana."

Today, the company has more than 175 branch offices in North America, Western Europe, Israel, Australia, Japan, and Korea. Operations are based in the United States. International headquarters is in London, England.

Before 1976, domestic operations were concentrated in the eastern United States. With the acquisition of certain assets of Industrial Service Corporation of Kansas City, Missouri, Safety-Kleen added used oil collection services that expanded its market. Other acquisitions, United Drain Oil Co, Seattle, Washington, and Ever- green Environmental Services in Arizona and Colorado, also increased the company's business.

Service Centers Safety-Kleen owns and operates 18 recycling and processing centers and an analytical laboratory approved by the American Association for Laboratory Accreditation. Among the laboratory-related services are pre-qualification waste analysis and determination of both total and partial hazardous content.

The company's full-service waste processing facilities recycle materials such as waste oils, corrosives, toxic metals, flammables, gases, paints, solvents, sludges, filters, and greases. Also recycled are oil filters, gasoline, brake fluid, fluorescent lamps, and aerosol cans.

The used-oil services, a relatively new addition to the company, provide regularly scheduled pickup and transportation to one of two refineries for lube stock processing. Re-refined lube oil is sold to oil companies for blending, packaging, and marketing. It also is sold under the brand name, America's Choice, in such retail and automobile service centers as Wal-Mart in Canada and Goodyear. More than 130 million gallons of used oil are re-refined each year by Safety-Kleen.

Oily Water Oily water is collected and recycled. The oil is recovered for re-refining, and the water treated and discharged in compliance with municipal wastewater requirements.

Vacuum services, operating with 135 trucks, pump sludge and wastewater from below-ground separator tanks and isolate solids for recycling. Pressure washing and visual inspection of the separators come with the service.

"We have several processes at each of our recycle centers to handle the different products that are coming in," says Hanrahan. "Wastewater is treated and released into the sewer. Solids are solidified and sent to a landfill. The oil is either re-refined or blended in another of our facilities."

Other collection and recycling services are available for coolants, antifreeze, and photographic wastes, including silver recovery. Parts cleaner services encompass machine cleaning and maintenance, spent solvent removal, fresh solvent re-supply, drum labeling, and assistance with the accompanying paperwork for waste materials.

The company primarily handles mineral spirits and used oil but has expanded its handling of organic and inorganic chemical wastes. Rainwater contaminated with deicing fluids at airports is another chemical the company handles. No nuclear wastes are handled.

Minimum Storage Storage at service centers is kept to a minimum with waste-filled drums removed every 10 days. "We have no demurrage," says Hanrahan.

To serve customers in an environmentally conscious industry, Safety-Kleen guarantees payment for cleanup or remediation if a spill occurs while the product is in its possession.

In addition to waste handling, the company offers educational programs that cover regulatory compliance for the Occupational Safety and Health Administration (OSHA), EPA, and Department of Transportation (DOT).

When environmental regulations evolved during the 1970s, the codes brought mixed blessings to the company's operation, says Hanrahan. While business opportunities increased, regulations required Safety-Kleen to demonstrate compliance that resulted in higher costs for paperwork and other administrative-driven management.

Driver Training The growing administrative demands, as well as the creation of new regional offices, called for additional employees. Each service center today employs an average of 20 people while 100 to 200 people work at recycling centers. Thousands are employed throughout the company, including 700 at the corporate headquarters in Elgin.

Drivers are considered sales representatives. "They talk to customers, listen to their problems, and look for ways to help them," says Hanrahan. Driver training includes customer service, driver education, and other related assignments.

"New drivers receive two weeks to a month of classroom instruction and on-the-road training in company trucks," he says. "Experienced drivers receive quarterly re-training. Of course, all have completed the 40-hour OSHA course."

Drivers learn report management, hazardous waste identification, and hazardous waste manifesting. Some employees are certified for confined-space entry, but employees do not entertanks routinely. The training is for emergency situations. Monthly safety programs are conducted by environmental experts and representatives in customer service. Employees wear protective equipment appropriate for the material being handled, says Hanrahan.

Company image is important. All vehicles carry the company name and logo and are painted the same distinctive bright yellow with red and black stripes.

Company Image The company has purchased primarily Peterbilts with Cummins engines since 1990, except in the Canadian fleet, says Ray Hanna, fleet manager. The oil and vacuum division has about 500 vehicles. The Peterbilt trucks that are on order have Caterpillar and Cummins engines.

Older trucks are Freightliner and Ford. The majority of the new Peterbilt oil trucks are powered by Cummins engines. They have nine-speed Fuller transmissions and Eaton drive tandems. Tanks generally have a 3,500-gallon capacity and the majority are built by Interpipe Equipment, although some are built by Boston Steel & Mfg Co. All are equipped with Betts valves and Girard vents.

Tank trailers haul oil, industrial solvents, and other hazardous waste. The 300 vessels vary in capacity from 5,000 to 8,000 gallons and are built by Heil Trailer International, Stainless Tank & Equipment, and Polar Tank Trailer Inc. The DOT-coded tanks include MC306, 307, and 312, as well as DOT406, 407, and 412.

Straight barrel vacuum tanks have a 5,000-gallon capacity. Double conical tanks can carry 7,000 to 8,000 gallons. Vacuum pumps are from Drum Industries and IME. Valves are from Betts Industries. Pressure-relief vents are supplied by Girard.

Bridgestone supplies tires for the vehicles, landing gear comes from Binkley, and Neway is the air suspension manufacturer.

Vacuum Services Safety-Kleen's vacuum services, the most recently added division, operate the Keith Huber Inc Dominator DOT412 carbon steel vessel installed on a Peterbilt chassis. Built to ASME standards, the 2,800-gallon tipping tank has a full-opening rear head with Betts valves. It is equipped with primary and secondary shut-off systems.

A liquid-cooled, hydraulically driven pump, full-length hose trays, and 20-inch manways are standard equipment. The vacuum pump assembly can be removed for pump servicing. Pump and storage cabinets are equipped with stainless-steel lock assemblies.

The Safety-Kleen fleet includes 500 box vans, 1,450 walk-in vans, and 500 mini-vans from Ford, Chevrolet, and Chrysler.

All vehicle maintenance and inspection are tracked by computer from Elgin headquarters. Field reports list truck conditions. The company has only one maintenance shop and it is in Canada. Vehicles elsewhere are sent out for repairs and inspection to repair shops, some of which are Safety-Kleen's customers.

"The company has a very proactive, preventive maintenance program," he says. "A copy of every preventive maintenance invoice is sent here so that at any given time, we know the condition of the truck."

Waste shipments are tracked through documentation at the time of loading when the volume of the shipment is measured. After arrival at a branch facility, the volume is measured again upon unloading. The information is fed into a company-designed computer program. "We want to be sure that it totals correctly," he says.

All over-the-road transportation is coordinated by Chet Landis in Elgin and operates out of recycling centers, says Hanrahan. Dispatch and logistics managers oversee routes and mapping.

"One benefit of the recycling program is that the trucks are always loaded," he says. "Drivers pick up wastes, deliver them to the recycling center where they are processed, and then haul the recycled material."

The precise transportation evaluation and recordkeeping are part of Safety-Kleen's services to customers involved in the handling and disposal of hazardous wastes. "The bottom line on value is that everything we provide in our service adds up to real peace of mind to our customer," says Hanrahan.

The SAFETY-KLEEN Corp board of directors had endorsed a $1.8 billion merger offer from Laidlaw Environmental Services Inc at the time Modern Bulk Transporter went to press. The action came after Safety-Kleen shareholders turned down a $1.58 billion offer from a consortium led by Philip Services Corp, according to information from Laidlaw.

Laidlaw's winning bid was $18.30 in cash and 2.80 shares of Laidlaw common stock for each share of Safety-Kleen common stock. An earlier Laidlaw offer was $18 per Safety-Kleen share.

In recent months, Laidlaw, controlled by Laidlaw Inc, a Burlington, Ontario, Canada, corporation, and the consortium led by Philip, a Hamilton, Ontario, company, have been involved in attempts to effect a merger.

Laidlaw's $1.76 billion earlier unsolicited offer was initially rejected by Safety-Kleen's board of directors, which precluded shareholder consideration. However, after shareholders rebuffed the Philip bid in early March, the board agreed to consider the Laidlaw proposal.

Laidlaw will use Safety-Kleen's hazardous waste business to expand the use of Laidlaw's incinerators and widen Safety-Kleen's services to current customers, according to a report in The Wall Street Journal. Safety-Kleen's main office in Elgin, Illinois, is expected to be closed and its 600 employees laid off, The Wall Street Journal reported.

Laidlaw Environmental is a hazardous waste company based in Columbia, South Carolina, and provides hazardous and industrial waste management services to industries and governments. The company operates from more than 100 locations throughout North America.

Donald W Brinckman, Safety-Kleen founder, chairman, and chief executive officer, said that most of the shareholders initially were in favor of the Philip-led offer, but was not enough for the two-thirds majority vote required by Wisconsin law.

SK Parent, the holding company formed by Philip and affiliates of Apollo Management LP and Blackstone Merchant Banking Group III LC, was initially favored by the board, which attempted to spearhead the merger.

Philip Services is a metal-recycling and environmental-services concern. Laidlaw filed a lawsuit in federal court after its initial offer was denied stockholder consideration, asking for an injunction to force the Safety-Kleen board to lift the defensive measures blocking the Laidlaw offer, according to information from Laidlaw.

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