Multiple Levels

Owners of obsolete electronics have an assortment of priorities to consider, with asset recovery, information security and environmental protection often balanced at different levels.

It has been clear to the Decareau family, founders of M&K Recovery Group, and to Bill Rockett, M&K vice president, that providing service to this market cannot involve a single "one size fits all" proposition.

For company founder Don Decareau, the roots of M&K Recovery Group lie in the precious metals recovery side of the electronics recycling formula.

By the time Decareau founded M&K in 1994, he already had more than 20 years of experience in precious metals refining and trading.

Precious metals recovery remains a focus for M&K and many of its customers, with trustworthy assaying and full recovery of gold, silver and platinum being a selling point for the company.

In particular, M&K distinguishes itself with the use of a chemical-based refining process that does not involve the use of smelters or other furnaces—or the energy consumption or air emissions that accompany those processes.

"We feel this is something we can offer on the corporate level to OEM customers that others cannot," says Rockett of the chemical refining process. The chemical refining method and a cyanide strip technique used for some gold-plated components allow M&K to market an emissions-free alternative for customers seeking to reclaim the value of the precious metals their obsolete materials generate.

The high price level for precious metals throughout much of this decade has sparked customer interest in the process. "When I’m talking to prospective customers, it’s certainly something I make them aware of initially," says Rockett.

However, at M&K materials recycling efforts do not stop with its precious metals refining process. As the company and the overall electronics recycling industry has matured, M&K has paid attention to keeping up with the latest recycling techniques to capture more materials.

Through both disassembly and (since 2003) shredding and downstream sorting, M&K targets copper, aluminum, steel and other metals for recycling, as well as recyclable plastics.

In some cases, especially when loads of units with identical plastic casings and housings are received, the plastic shells are removed and baled to be shipped for recycling. "Vendors we have dealt with want bales with like materials," notes Rockett. "We perform different types of segregation, based on type of resin and color. Silver and black might stay together, or cream-colored CRT housings might be baled together."

In terms of shredding, the company is in the process of acquiring a new shredder for its Massachusetts facility made by Austria’s Untha, which has its North American office nearby in Newburyport, Mass. "We wanted to upgrade and go with a newer, better shredder," says Rockett of the four-shaft, low-torque unit.

Among the shredder’s foremost applications are the destruction of electronic storage media and of hard drives, which stand out for unique attention in the components stream for information protection reasons. (See "Security Guards" sidebar below.)

M&K’s multi-level approach and its operating history, however, provide a basis for a comprehensive approach for the handling of components found within the electronics recycling stream.

Although Don Decareau has a background in precious metals refining, Rockett says that M&K was founded in 1994 with an eye primarily on the equipment "sales and refurbishment side."

In particular, the demand for memory chips was strong at that time. In its early years, the company used a hot flux machine to put harvested chips through a flux treatment in order to "re-sell the chips for close to the value of new chips," says Rockett.

Customers continue to have options regarding refurbishing, disassembly and component remarketing. Disassembly occurs within the same secure facilities in which other forms of recycling and information destruction take place.

The company markets itself as following NSA- (National Security Agency-) approved data destruction guidelines and makes a description of its security procedures available online through its Web site at www.mk
recoverygroup.com.

Rockett says M&K has been fortunate enough to acquire a wide-ranging customer base. He lists "OEMs, manufacturers, corporations and government clients" as comprising the bulk of M&K’s customer base.

What M&K has learned to do, he says, is not to impose one recycling method or model upon its clients, but rather to provide service in a way that suits the customer.

This includes not only offering a range of asset recovery, recycling and information destruction services, but also providing different material flow options.

"We can handle either mixed loads or large loads of like materials," says Rockett. "We’ll take care of the customer as an individual client."

"If a customer wants all three services (precious metals recovery, electronics recycling and hard drive destruction), that’s wonderful. But if customer ‘X’ only wants to send, say, 500 hard drives for destruction, we’ll do that too," adds Rockett.

He continues, "If a customer indicates that the priority is the greatest dollar amount recovery possible, then we will do that. If security is the No. 1 consideration, we make certain that comes first."

Rockett says M&K has also learned to work with customers on seasonal or business cycle patterns that are unique to their business. "Some have one large load per year, and others have smaller shipments every two weeks," he remarks. "It all adds up to being fairly steady, and you learn from your customers how often they wish to send shipments. There are cases where I’ve thought, ‘Hey, I haven’t heard from that customer in awhile,’ and then the next week they have 10 pallets ready to ship."

The focus on meeting customers where their needs are has put M&K on a healthy growth pattern that has seen its revenue grow from year-to-year, and now includes a greater geographic range than when the company started.

From 1994 through the first half of this decade, Don Decareau, his son Matt (who is currently the director of business development) and Rockett helped M&K grow into a leading regional electronics recycler in the Northeast.

In its 14 years, the company has outgrown its New England location three times. It currently inhabits a 35,000-square-foot building. The company has made a $2 million investment in the building to purchase it and then retrofit it to meet M&K’s workflow needs.

In 2006, the company opened a second facility in Austin, Texas, that has allowed it to greatly increase its service range geographically. The company hired electronics recycling veteran David Golla to run that plant. "We were very lucky with being able to bring David on board," says Rockett. "He’s someone we know and trust who has the background knowledge and who really brought his own customer base with him; he’s a hometown Austin guy."

Having the Austin facility now allows M&K to service clients throughout the eastern two-thirds of the United States, says Rockett.

The need to learn about the environmental and recycling laws of the separate states takes ongoing effort. "It’s crazy to me that you have each of these states classifying electronic scrap in different ways for waste handling or landfilling purposes," he comments. "Personally, I would like to see the federal government come in and put an umbrella rule in place."

Having a larger-sized business has also meant keeping an even closer eye on fluctuating precious metals prices, says Rockett. He says seeking quick settlements on prices has been M&K’s strategy to informally hedge the market. "If we recover 10 ounces, we have that settlement price established that afternoon based on that day’s London fix price," he says.

Internally, Rockett says the Decareau family has a series of management philosophies that have not changed over the years. "Don has always preached that both customers and employees should be treated the same way you want to be treated," says Rockett. "He has created a loyal, small family business atmosphere here, with a lot of employees who go back 10 or more years."

Rockett has been with M&K since the firm was founded in 1994, and he is optimistic that the company’s management style and its business decisions have combined to put M&K in a position to keep growing.

What direction that growth takes cannot be spelled out too clearly for competitive reasons, but Rockett says the success of the Texas facility provides encouragement that additional physical locations in geographic regions such as the Southeast, the Midwest or the West Coast provides one possibility.

As M&K settles into its new North Andover building and reaps the benefits of having a location in Texas, its company history shows that it is not likely to wait too long before making its next prominent move to service its existing customers and attract new ones.