In order to be successful in business, you need to have the right equipment. Sometimes that equipment comes in the form of a purchase; sometimes it’s better to lease.
For Faztec Industries of Staten Island, N.Y., sometimes it’s a combination of the two.
Faztec recently acquired two Volvo L180G’s from Penn Jersey Machinery; the two were leased.
“We found that this is such a harsh environment that we are better off matching our monthly payment to our usage rate with warranty, so that we are getting the most out of our equipment,” explained John DiFazio, vice president of Faztec Industries, which is the recycling and material division of the DiFazio Companies.
“As opposed to the pipe division of DiFazio Industries, where we find that you could buy a loader and can run that loader 10 to 12 thousand hours over a seven or eight year period and still is pretty worthy of the assignments. Here, we find with the high cycle time, the long hours, at the transfer station, we just can’t get the same utilization out of the piece. So, Penn Jersey Machinery was successful in trying to match our payment to a 10,000-hour warranty, and a 10,000-hour lease. So, at the end of the four years, we will be ready for new units.
“We can establish a fixed budget, knowing what our payment is every month and what the usage rates are, thereby controlling costs, which in today’s environment, more than ever, it’s about working smarter, to try to keep a profit margin.”
The new DiFazio’s wheel loaders are used in support of the company’s transfer station operation.
“It is a lot of load and carry and truck loading. We found the 180G to be a good fit for our facility as far as size. It has a 6.3 cubic yard bucket on it, so we are loading a triaxle in three passes.
“The key component is to learn from your mistakes,” DiFazio continued. “This facility became licensed in 2007. There was a big learning curve, fortunately, we were able to take a look at what we were doing, where we were spending our money and come to Penn Jersey with a set of specifications. For example we looked at our tire expenses and our tire wear. We decided we wanted foam filled L-5 tires going right into it. We wanted the buckets Hardox lined, because we found in two to three years we were spending a lot of money on welding and repairing our buckets. So, we specified the bucket liners to be able to make that four-year lease time line.
“We wanted automatic lube systems to take the time out of manually trying to lubricate the machines and keep our bearing life longer. Certain things definitely have been learned the hard way.”
Keeping Things Moving
The material comes from the five boroughs of New York, approximately 10 percent is from New Jersey. Faztec then makes various products from the materials.
“We make a three-quarter minus clean fill that we market to New Jersey and New York markets. We also have a new Eagle 1400 crushing plant that we put in place in September 2011. Through it we make a three-quarter recycle stone and granular fill, which is all recycled product,” said DiFazio.“The recycled products are mainly geared towards the commercial end of the business.”
The products then go out to DiFazio’s customer base, including commercial markets and municipal projects. Some of it goes for landfill cover.
“We have different end markets, which has been the biggest challenge in our industry, to keep those end markets open. We are constantly working on end markets,” DiFazio said.
In the Beginning
Faztec took control of the property in 2000, it took approximately six and a half years to get a license.
“In 2000, when we bought the land, it was a contractor’s yard. We used it as a sand and gravel depot for six and half years and then once we got our permits, built the facility, continually doing work on it as we go. We then bought the two acres adjacent to us in 2009, we moved our sand and gravel operation there.”
A Fleet of Hundreds
As a whole, the DiFazio Companies operates more than 200 pieces of equipment. At Faztec Industries, there are three excavators and three wheel loaders in use. It also operates a Pegson jaw crusher, an Eagle 1400 impact plant, Sandvik QE440 screening plant and a Extec E7 screener.
“We made quite a bit of investment last year into bigger quarry size equipment. We have had to make a change from contractor equipment that was just not keeping up with our demands. Another part of that learning curve, trying to gauge what your flow is in and out of the facility. We had to bite the bullet and make those investments.
“We have learned to process the material as soon as it hits the ground, better to be sitting on product as opposed to sitting on waste to be processed. We are considering purchasing a bigger jaw plant to try to raise our ton per hour ratio,” DiFazio said.
Penn Jersey Machinery
Another key aspect to a successful business is a good working relationship with an equipment supplier.
“Our relationship with Penn Jersey is strong because there is a friendship that has been built over the years. I started doing business with Wayne Donohue [branch manager of Penn Jersey Machinery] when I was just a pup in this business and he was an old man,” DiFazio said with a chuckle.
“We started doing business together in the early ’90s. From that, when Wayne went over to the Volvo line, he gave me a call and said he was working with Penn Jersey and wanted us to look at the product line. Once my brothers [Marc & Jeff] and I got our hands on the Volvo equipment — all operating engineers by trade — we were impressed by the quality. I was happy to see them come into the New York market and help push along the market share. The machines are dead on.”
DiFazio Industries’ first venture with Penn Jersey was the purchase of a new Volvo paver.
“We purchased a 6110. That was our first big transaction with Penn Jersey.
“The service from Penn Jersey has been just a phone call away. We always had the support. If there is an upgrade or an update, that phone rings and says ’John, I owe you.’
“We just bought a used machine from Wayne and Bob Watt, a 330B, and we had to make a decision between buying it from Penn Jersey or buying a unit from someone else. We know when that machine goes through the facility, either Bobby or Wayne is going to put their hands on it before it gets to us and they deliver what they promise. That’s been very important to us.
“A key advantage to owning Volvo, a point that Wayne first presented to us was fuel consumption efficiency. At that time fuel rates really started to climb. Right away we saw a benefit in the first Volvo wheel loader we bought. Just the savings in fuel consumption made a payment for us.”
Tier IV
Faztec is presently in an application process to renew its capacities at the facility.
“We had Tier III and Tier I equipment and we are now going to Tier IV,” DiFazio said. “We have to run environmental impact studies. Tier IV equipment helped us drop our emissions by a huge amount.”
Hard Workers
DiFazio also is impressed with Volvo’s dependability.
“We have not tackled any major repairs. This environment is harsh. It was a no brainer for us when Volvo came to the table. They knew what our goals were and came to the table, ready to break bread.”
The Volvo machines also have the CareTrack system that lets anyone DiFazio designates in its office to monitor the machine remotely via Internet.
“He can see the usage and how much fuel is being used. The idle time, the downtime, the trouble codes that pop up. The other manufacturers have a similar system, but Volvo lets the end user have access to the whole system. Where he can download reports and make spreadsheets. He can set up a perimeter. It has been a fantastic tool,” Donohue said.
About DiFazio Industries
The DiFazio Companies is made up of four business models: DiFazio Industries, Faztec Industries, Diamond Ready Mix and DiFazio Environmental.
“DiFazio Industries is our heavy/highway construction company, whose major operations is managed by my brother Marc. We perform various projects such as road-building, sewer, water main, underground utilities etc. for various municipal agencies and public utility companies such as Verizon, Con-Edison for example. The majority of our work is in the five boroughs of New York City.
“Diamond Ready Mix is a concrete plant that we bought in 2010. It was an existing facility. It has been around about 50 years. We modernized it, became state and city approved. My brother, Jeff, the youngest member of the family, is running that facility. We bought it with about five trucks and are working 15 mixers now. It has been a steady climb in a tough economy. It is something you really have to stay focused on and have a lot of resolve to keep it going.
“Next is DiFazio Environmental, which is owned and operated by our parents, Salvatore and Phyllis DiFazio. The company operates a unionized trucking fleet. They run approximately 12 trucks in the New York metro area in support of our construction operations and they also are available for hire.”
The original company, which DiFazio’s father founded in 1979, was S. DiFazio and Sons Construction.
For more information, visit www.faztecind.com.
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