The scrap profession is steeped in tradition, with the bulk of today’s companies boasting a lineage that dates back many decades, if not a century or more. It is also, however, an evolving industry with new companies regularly springing up, headed by individuals committed to building a business and growing the profession they love. In light of that fluidity, it’s heartening to hear when one of those relative newcomers—like 1st Coast Recycling—celebrates a milestone. As the Palatka, FL-based company approaches its fifth year in business, it will be marking the event with a month-long series of drawings for very valuable prizes, awarded weekly to lucky members of its loyal customer base. More than just a generous giveaway, company principals say the event is their way of expressing gratitude to the individuals and companies who’ve literally made their success possible.
Getting it Right
The brainchild of scrap veterans Mike Orand and Jim Bugg, each of whom held management positions with big-name scrap firms, 1st Coast Recycling was formed in an effort to capitalize on mutual strengths and carve a different path than the one each man knew so well.
“Jim and I were actually competitors and got to know each other bidding jobs against each other,” says Orand. “We eventually became friends and realized that we’d both grown tired of corporate America. Big companies come with a lot of baggage, and we felt we could do a lot of things better than we’d seen done at our respective companies. Jim left his position in 2004, and I left mine a while later.”
With that commitment to doing things differently in mind, Orand and Bugg spent the next two and a half years laying the groundwork for their new endeavor. That included securing the capital needed to make initial purchases of land, equipment, etc., as well as selecting the company’s first employees.
“Oddly enough, in looking for staff, we didn’t search for people with scrap experience,” says Bugg. “Instead we tried to focus on finding people who had the right attitude, an attitude that we knew would translate into good customer service. For us, it is all about the service; if you provide that, you have a repeat customer. You have repeat customers, you have success. So right now we have only one employee with a scrap background, yet I believe we have a staff, company-wide, that is second to none.”
Off and Running
The company opened its doors in March 2007, and customers at the time must have immediately noticed that this scrap yard was unlike any other they’d visited.
“We did a lot of things differently, including designing the drop-off area as a drive-through rather than one in which the customer has to back in to unload,” says Orand. “We did so mainly because we felt that approach would be more efficient. But we also did it because it sends the customer a message that we care about them. We keep at least three workers in that area at all times to do all the unloading; the customer just stands back and watches. Most of them had to load their vehicle in the first place. I’ve yet to hear one complain that they couldn’t also unload it.”
It’s obvious to anyone with any kind of scrap background that Orand and Bugg could not have picked a better time to begin a scrap venture. In 2007, scrap prices were skyrocketing to previously unseen heights, and by early 2008, the company was handling more than 350 customers a day. That same knowledge of all things scrap, however, also provided insight into what was coming next. Not surprisingly, 1st Coast was better prepared than most for the crash.
“We saw scrap going up so fast that we knew it just couldn’t sustain itself, so we started lowering our prices to move our material,” says Bugg. “At our peak we had as much as 4,500 tons of ferrous and another 300-500 tons of nonferrous in our yard. By the time the bottom fell out of the market, however, we were actually at our lowest inventory level ever. That, and the fact that we didn’t overspend in the run up, helped us weather the bad times much better than some.”
Production Trumps All
Though they did not overextend themselves, neither did 1st Coast cut corners when acquiring equipment to make material preparation as efficient as possible. While everything from the baler to the magnet cranes was scrutinized, the choice of a mobile shear—a Genesis GXP 660R—was based on proven performance from Orand’s and Bugg’s previous yards.
“That part of the business is so critical to keeping material moving through here that we knew we needed a shear that could handle a serious workload,” says Orand. “The Genesis did that for us and then some. For awhile there, we were running it more than 14 hours a day seven days a week. The only time it was down was for routine maintenance. It was insane how much we pushed that shear, yet it never let us down and continues to produce for us today—on its second base machine.”
When volumes got so high that a second shear was needed, 1st Coast purchased an alternative make and model. Bugg says they did so based on a relationship with a local dealer and a very attractive purchase price. Even given those perks, he says, the switch was one of the few tactical mistakes they’ve made.
“Probably the only good thing we got out of that transaction was the chance to see how that shear stood up to our Genesis, and in short, it didn’t. We keep detailed records on all our equipment, and after six months, we saw how much more welding we did on that shear versus the Genesis; there was a lot more downtime, a good deal more maintenance. In fact, the Genesis that we’d had for two years was in better shape than the other shear was after only a year of service. Eventually we decided we weren’t going to mess with it anymore and purchased a second Genesis, a GXP 500R that we mounted on a 340 Terex. That current lineup is one of the main reasons our prepared scrap operation is never backlogged.”
To enhance wear characteristics on the two shears even further, 1st Coast ordered Genesis’ Shear Jaw Armor™, a weld-on modular system constructed of abrasion-resistant, proprietary GenGuard steel which reduces the need for build-up and hardsurfacing of the newly-protected wear areas (the shear’s lower and upper jaws as well as the chin). Bugg says the improvement in wear has been dramatic.
“This is a really impressive, yet affordable upgrade. Our mechanic has reduced the time he spends doing build-up by about 75%. It makes that much of a difference. Mind you, this was not an expensive option, so I’m certain it paid for itself from the reduction in downtime and lost production alone. It’s one of the best things that Justin Palvere, our Genesis rep, has ever sold us.
Celebrate Good Times
1st Coast Recycling is understandably proud that it has weathered both the crash in scrap prices and the economic storms that befell the country. They also recognize that their customers throughout the area, residential and commercial, are the main reason for that success. To show their appreciation, the company has become a committed, involved member of the Palatka community, embracing local charities such as 4-H and the Edgewood Children’s Ranch through livestock purchases at the local County Fair.
“We know that we would not be where we are today without the local community’s support,” says Orand. “So it really is an honor and a pleasure to give something back for the success we’ve enjoyed.”
That payback will continue as 1st Coast celebrates its upcoming five-year milestone. To do so, Orand and Bugg wanted something out of the ordinary and solicited ideas from people within the company. The result of that brainstorming was the suggestion to hold a month-long prize giveaway.
“The idea actually came from Diamond Schiffers, our finance person,” says Bugg. “She heard an ad on the radio about some larger company having a huge prize giveaway and thought, ‘We can do that!’ So we took the idea and built upon it, eventually deciding to put all the scrap tickets we receive each week during February and early March into a bowl for a weekly drawing. So throughout February, along with a number of smaller but still very nice prizes, we will be giving away a 16-foot utility trailer each week. The celebration will culminate the first week of March, the actual week of our anniversary, with the grand prize drawing for a fully-loaded pickup truck. We’re all really excited about the entire event.”
Neither Orand nor Bugg can recall any other scrap operation doing anything like this, adding that it’s just another way in which they’ve tried to set themselves apart from the pack.
“When we started this company we had some serious goals that we hoped to accomplish,” says Orand. “First and foremost, we wanted to establish an environment that made it enjoyable to come to work. We didn’t want our employees to feel the way we felt when we left our companies, and I think we’ve accomplished that. We also wanted our people to be as proud of the company as we are and to share the same work ethic we have, and we see that from them every day. So yes, our celebration will be a bit unorthodox, but I guess so is most everything we’ve done so far.”