Scrap recycler generates business through old-fashioned values
Scrap recycler generates business through old-fashioned values
May 2015 - As scrap metal prices have weakened in recent months, Modern Metals can’t help but wonder what makes scrapyards maintain steady business during downturns. Price fluctuations are facetiously cited as the nature of the beast, but maintaining customer loyalty is essential no matter the economic climate.
Gregg Rader, CEO at Columbus Recycling Corp., says it’s all about honesty and integrity. Rader has cultivated a straightforward reputation he claims has generated a list of loyal clientele and secured a promising future for the 59-year-old, family-run business based in Columbus, Mississippi. In the last decade, Columbus has expanded its capabilities more broadly and today operates five facilities in the southern United States.
The recycler has retained a small-business mindset, however, working with each customer on an individualized level—whether large or small—in order to gain that most valuable asset: trust.
How, through the Great Recession, the frequent outsourcing of U.S. manufacturing capacity and a widening skills gap, did the recycler manage to grow the business? Rader breaks down Columbus’ work ethic. “We’re honest with our customers and give them good service.” The logic is easy: Say what you’re going to do, and then do it.
Columbus Recycling offers services and even business advice to everyone from walk-in customers to industrial mills and service centers. Although not all its yards are open to the public, Columbus’ facilities all clean, sort, compact, bale, shear and bundle scrap to sell to nonferrous foundries, melt shops and steel processing facilities where the material is used to manufacture new raw products.
Founded as a single scrapyard in 1956, Henry Weiss opened Columbus Recycling (then Columbus Scrap Material) for individual and small-haul recyclers in the South. Rader, Weiss’ son-in-law, first joined Columbus in 1991 as vice president of operations. In 2000, he purchased the company from Weiss and proceeded to set his sights on both geographical and technical expansion.
A spate of acquisitions
From 2000 to 2013, Rader purchased scrapyards in Iuka and Meridian, Mississippi; and in Memphis and Chattanooga, Tennessee. Fifteen years ago, annual revenues were under $4 million. By 2013, sales topped $100 million. Company President Robert Craig says that while Columbus Recycling has grown organically as well as through asset purchases, instilling loyalty over an expanding customer base is made possible by being dependable and on-time, every time.
Craig has worked in the steel industry for 25 years, joining the company in 2004 and assisting Rader through the ups and downs of a commodity-based venture. “It’s been a good marriage for both of us. We’ve been able to work together and build the business,” he says about Rader.
The management team consists of a mere six individuals but Craig cites the advantages of a close-knit structure. “We don’t have layers of people. We just all pitch in together. We are running the whole thing. Each yard has a manager and we’re looking at only 75 to 80 employees. If we make a decision, I can almost reach out to Gregg’s office for an answer. We are not burdened by various levels of people and I think that is a big plus today,” he says.
Rader agrees that this lean structure allows the team and its activities to remain transparent to customers. Columbus’ motto, “Always do the right thing,” is emblazoned across its website home page. When asked about the motto, Craig says it’s no gimmick. “We always do what we say we’re going to do even if it costs us money.” If an error occurs, Columbus honors its contract, no matter the loss.
“You are not going to win every battle or every account but we feel that we have been fortunate. There have been some setbacks and we have learned how to move ahead. You’re not always going to bat a thousand,” adds Craig.
Rader says that scrap prices are tracked cautiously but with customers’ interests held topmost in mind. “We’re at the mercy of the mills. The mills come up with the price [they want to pay per ton], but we don’t have to sell. We can actually hold material one to two months and then ship. We don’t have to sell to the steel mills, but we do. We’ve built a good relationship with them,” says Rader.
Seeing the value
Rick Quinn, vice president and general manager at Steel Warehouse Co., Memphis, Tennessee, says working with Columbus has made transactions easier. The service center has sold scrap to Columbus for four years. “Knowing when we say we need to get scrap moved or need advice on how to gain better economic value from our scrap, they always help with solutions.”
Columbus drops bins off at Steel Warehouse’s Memphis facility. When the containers are filled, Steel Warehouse calls Columbus for pickup and processing at its Memphis scrapyard.
“They do a good job comparing weights so we are consistent. Columbus also takes digital photographs of our scrap when it gets to their yard. The advantage is we have a clear definition of what was shipped versus what was received, it also gives us a tool to gain more value from our scrap.”
Quinn declined to describe the volume of scrap that Steel Warehouse generates per month but notes that working with Columbus has added value to its recycling program.
Part of putting customers at the forefront of the business is keeping them informed about the metals industry. Craig says while they are optimistic about expanding, they still treat everyone who walks into the scrapyard with a friendly, approachable, small-business mentality.
For example, Columbus posted a how-to guide on its website, which includes tips on selling and buying scrap for anyone from a novice scrap collector to major scrap dealers and brokers. Resources in the fact-filled guide include metal descriptions and metal price factors.
“We want to educate our customers. We want them to keep coming back. Our business is like a revolving door, so we want people to understand how to sell and get the most value from their scrap,” says Craig.
Ultimately, creating fair trade is essential to surviving. While Craig feels Columbus’ business motto has driven the company, strategic partnerships are giving Columbus newfound momentum.
In 2014, Columbus Scrap Material partnered with private investment firm Trivest Partners and changed its name and structure to Columbus Recycling Corp. to reflect the expanding presence in the Southeast. Rader and his fellow executives continue to run daily operations and pursue opportunities to expand Columbus.
Craig anticipates business will grow as it adapts to a wider environmental consciousness alongside global sustainability objectives. “Our goal is to double what we are doing over three years. We are on task to try to do that,” says Craig. MM
