2007 Scrap Metals Supplement -- Lessons Learned

Many of the established scrap recycling companies operating this decade have roots that trace back three or even four generations.

However, the industry has by no means closed itself off to entrepreneurs, as the story of Randy Castriota and Castriota Metals & Recycling, Pittsburgh, demonstrates.

As with recycling companies from previous generations and from regional markets throughout the world, Castriota Metals & Recycling started at the peddler and collector level and grew by trial and error and experience.

Randy’s first exposure to the scrap recycling industry occurred as a junior high and high school student in Pittsburgh, when he would help his father make the rounds scavenging for scrap metal.

His father Al was a motorcycle police officer who owned a 1956 Ford pickup truck and would take it out for scavenging for mufflers, tailpipes and other metals on off days to earn an extra $10 to $15 per day. Randy was often his assistant.

"My father grew up during the Depression and he didn’t like to borrow money," notes Randy. "He gathered scrap on evenings and weekends for 10 or 15 years," he recalls.

Throughout the 1970s and into the 1980s, Randy followed in his father’s footsteps, using a series of newer and larger trucks to collect scrap to supplement his income.

In 1987, Randy took the plunge and purchased a piece of property in Pittsburgh so he could enter the scrap business full time. Using advertisements in a local "shopper" newspaper and friendly and attentive customer service, Randy was soon conducting enough business to hire employees and fill up his 5,000-square-foot building with scrap inventory and operations.

"We opened our doors and people appeared; it was like a miracle," says Randy of his first months in business in Pittsburgh’s South Hills neighborhood.

As his business at that location grew and stabilized throughout the 1990s, Randy was also keeping his eyes and ears open for a location that would allow him to expand into ferrous scrap and wider operations than he could undertake at his original site.

The opportunity he was waiting for presented itself in the form of a six-acre narrow strip of land belonging to CSX Transportation.

The land is located along railroad tracks in the Ohio River valley, near the McKees Rocks Bridge connecting that Pennsylvania city to Pittsburgh. It had once housed the maintenance and repair yard of the former Pittsburgh & Lake Erie Railroad, acquired by CSX in 1993.

Castriota Metals & Recycling acquired the McKees Rocks land in 2001, but Randy spent several years lining up financing and planning and preparing how to best use the site before beginning to inventory scrap there in 2004 and officially opening it up for business in 2005.

Just as with his first location, Randy credits a few well-placed advertisements and attentive customer service to quickly bringing across-the-scale traffic to his company’s second location. "We probably average about 100 street trade customers per day at the two locations," says Randy. "We do a little advertising, but word-of-mouth has also been a key. Customers say they like working with us."

The growth of Castriota Metals & Recycling has involved more than having access to a second plot of land—although that has been a critical element.

While attracting across-the-scale street traffic has been a key strategy for the company, Castriota now also manages a growing fleet of trucks and roll-off containers.

Pittsburgh Roll Off Service is a separately incorporated business that operates from the same two locations as Castriota Metals & Recycling. Much as with his scrap business, Randy started the roll-off company with a modest investment—one roll-off truck and one dump truck—but with large goals.

"In 1996, I wrote down that my goal for the business was to have 10 trucks and 500 containers by January of 2002," recalls Randy. "By January 1, 2002, I had reached my goal. The power of goal setting is the eighth wonder of the world," he states.

Now, Pittsburgh Roll Off serves generators of solid waste, construction and demolition (C&D) debris and other materials with a fleet of trucks and the ability to direct those trucks to either landfills or recycling facilities.

Castriota has noticed on the C&D side an increasing amount of attention to the recycling of materials generated. "Some customers involved in Green Building projects are asking for more than one roll-off and roll-offs that can be labeled so they can do some separating of materials," says Randy.

As with scrap recycling, the Pittsburgh waste hauling industry is a competitive one, according to Randy. "I think our company is one of 38 operating in the Pittsburgh market area," he remarks.

Having a fleet of trucks and roll-off containers has also helped Castriota Metals & Recycling move well beyond its street trade for supplies of scrap. The company’s relationship with demolition contractors and industrial waste generators has helped it gain access to those segments.

There are now 25 employees working at the two Castriota sites, sorting and processing ferrous and nonferrous scrap, including a broad range of aluminum and red metal grades.

At the McKees Rocks facility, large-volume in-bound scrap arrives over a 70-foot truck scale made by Thurman Scale Co. that was installed in 2006.

On the ferrous side, Caterpillar hydraulic scrap handlers, one equipped with a new Caterpillar mobile shear, help at the McKees Rocks facility. When Randy acquires scrap that is best off being processed by a shredder, he generally directs it to the nearby Neville Metals shredder in Pittsburgh.

Nonferrous scrap is directed to the appropriate storage or processing area by the scale house personnel. Some of it, such as aluminum extrusions, is baled in a Marathon baler installed by the Ohio Baler Co., Cleveland, shortly after the McKees Rocks plant opened.

Meeting goals and handling a growing volume of material is only part of Randy’s story of the previous two decades.

Throughout his journey as an entrepreneur, Randy has also been a husband, a father, a landlord, a provider of second chances to some of his employees (See the sidebar "A Second Chance" on page S24), a citizen actively involved in several community organizations and a son who has grieved the loss of his parents.

Randy, whose father taught him early on about the scrap business and whose mother later worked for him as a company secretary, lost both of his parents in 2004. He says he is grateful that they were able to see him become a successful entrepreneur, but regrets that they missed out on the way the McKees Rocks facility blossomed with activity in 2005 and 2006 as the scrap market soared to new heights.

Regarding his company’s success in the past two years, Randy is quick to acknowledge the fortune of good timing. "We’re very lucky to have opened this facility just as we entered one of the greatest market periods in scrap history," he comments.

At the same time, he does not want to detract from his own efforts (the saying "the harder you work the luckier you get" comes to mind, says Randy) or the hard work of his employees. "We have great employees and have been fortunate to be able to add key positions like a chief financial officer and a nonferrous manager in 2006," says Randy.

In the summer of 2006, Randy’s 16-year-old son Michael was able to put in some serious hours helping to sort and process the nonferrous scrap flowing into the McKees Rocks yard.

Speaking from his McKees Rocks plant on a late summer day in 2006, Randy says, "When we started setting this site up 18 months ago, you could see the bottom of the ground in a lot more places. Every day when I wake up, metal keeps flowing in," he notes.

His 20 years in the scrap business have gone by quickly, says Randy, and some days are certainly better than others. He estimates that perhaps 10 percent of his work days qualify as ones that are difficult to weather, but that by no means dampens his optimism.

"There are challenges, naturally, but I strongly believe that all this effort will work out for the best," states Randy.