Fresh yet familiar

Marc Olgin spent most of his lifetime working in the scrap recycling industry; however, he took a pause in 2016. After transitioning out of a position he had held for a long time, Olgin spent that year working with one of his friends at an environmental consulting firm. He also used that time to consider any next steps he might take in the scrap recycling industry.

But, it wasn’t long before Olgin had the itch to get back into recycling. After honoring the one-year noncompete agreement with his previous employer, he quickly began developing plans to start a new scrap metal recycling company in Phoenix.

“This is all I’ve ever done,” Olgin says. “I’ve made good friends over the years that I’ve stayed in touch with. It’s just something I’ve done forever.”

Olgin was introduced to Hilton Efune through a mutual friend, and the two of them discussed starting a new venture together with their families. Olgin invited his son, Chad, and Efune invited his son, Brad, to join them in the new venture. Marc says the four of them brainstormed and eventually decided to form Olgin+Efune Recycling Co. (OERC) in late 2017.

A history in scrap

OERC might be new, but neither the Olgins nor the Efunes are new to the scrap industry. The Olgin family has roots in the industry that date back decades, and Brad has been working in the industry for the past six years.

For more than 80 years, the Olgin family ran a scrap metal company in Erie, Pennsylvania, that went by several names as it passed through generations of family ownership. Morris Olgin, Marc’s grandfather, started the business in the 1920s, collecting scrap in Erie and selling it to dealers. Morris later started a retail scrap yard in Erie in the 1940s. When Marc’s father, Gerald, owned the business, he merged it with Liberty Iron & Metal in 1994. Marc took ownership of the business in 2000 and expanded the operations to Phoenix in the early 2000s when he and his family moved there. It was around that time that the company began to grow rapidly.

Marc says he sold 50 percent of the company to Germany-based Scholz in 2007, entering into a joint venture with that company, which he says enabled the business to expand beyond northwestern Pennsylvania all the way to the West Coast and Mexico. It was around that time that the business went from just a few scrap yards to 30 yards. But eventually, the Olgin family decided to exit Liberty in 2016.

Brad says the Olgin family’s history in the scrap industry as well as Marc’s experience have helped tremendously with the startup of OERC.

“It’s tough to get people to switch over to us, but that was one nice thing about working with Marc and Chad,” he says. “People have known them so long. But we’re also having some new people come over to do business with us.”

Setting up shop

Not too long before OERC formed, Hilton purchased an abandoned grain facility in Phoenix for a different business venture. However, after the Olgin and Efune families partnered to form the scrap business in late 2017, they decided that site would be a much better fit for OERC. So, the Olgin family bought into the property upon starting the new business.

Marc, Chad, Hilton and Brad then spent most of 2018 setting up the new business. They began installing equipment at the facility in January. Some of the machines they installed include a REB-2 two-ram baler and a T900CLS shear/baler/logger from Sierra International Machinery, Bakersfield, California; several Stanley, North Carolina-based Sennebogen LLC material handlers; a Fortress 95R shear from Superior, Wisconsin-based ShearCore; and multiple forklifts and skid-steer loaders.

In a matter of about five to six months, equipment was up and running at the site, and the company had received enough scrap metal to get started. In June 2018, OERC began processing ferrous and nonferrous metals at its yard.

Since starting the company, Marc, Chad and Brad each have decided to focus on a specific segment of the business: Marc and Brad focus on marketing metals, while Chad focuses on overseeing operations.

“It’s a good mix,” Marc says of OERC’s leadership team. He adds that OERC has been able to keep many of the relationships both the Olgins and Efunes have made over the years in the scrap industry. “All the relationships we’ve had in our years in business, people have welcomed us back. We’ve maintained relationships; it’s been helpful.”

Strong start

In a matter of two years, OERC has grown from about five employees in late 2017 to nearly 40 employees this fall. Chad says many of these employees previously worked with Marc and him since they moved to Phoenix, some of whom held management roles with their previous company. “When we restarted [in the] business, many employees we previously worked with were excited to come back and work with us at the new venture,” he says. “I think owners don’t always realize people are an important asset. We are continually investing in our people, talking to them at meetings every week and investing in them with good equipment and offices.”

Not long after starting the scrap business, Chad says OERC had a “mountain of metal” waiting at its yard.

“We ran way before we walked,” he adds. “We had people delivering scrap to our yard because they were excited to do business with us again. We didn’t have a shear in the yard, but we had a mountain of metal. It was a good problem to have.”

Marc attributes the quick and easy startup to maintaining good relationships from his longevity in the scrap industry as well as with having a strong level of customer service.

“One thing that I learned from my dad is customer service,” he says. “You have to get someone an answer. They don’t want to find out a week later that you downgraded their load. We pride ourselves on communicating well with customers.”

Brad admits that Phoenix is a somewhat tougher market to work in and one with a lot of competition. However, the company has managed to grow. He adds that the volume of scrap OERC receives has been increasing steadily.

Being involved with different chapters and committees at the Institute of Scrap Recycling Industries (ISRI), Washington, also has helped OERC in its first few years of business. Chad serves as the president of the Rocky Mountain Chapter of ISRI, and both he and Brad have been actively involved in ISRI’s Best Young and Brightest (BYAB) group. Marc adds that involvement in ISRI has been beneficial to the growth and success of the new business.

Chad adds that the three of them have also spent a lot of time building relationships with current and prospective ferrous and nonferrous customers and consumers as they have continued to grow and expand the business.

“The three of us are ego-free,” he says. “If I find a nonferrous contact, I’ll let Brad know. Same with if I find a ferrous contact, I let Marc know. Or if Brad finds a ferrous contact, he tells Marc. We’re on one team.”

Looking ahead

Marc, Chad and Brad agree that having different generations leading OERC has helped to provide a variety of perspectives.

“We get a lot of expertise from Marc,” Chad says. “We’ve been able to develop new and different markets through the networking and friendships Brad and I have developed with our involvement in ISRI and other trade associations we’re active in.”

“We want to expand smart with the right people.” – Chad Olgin, co-president, Olgin+Efune Recycling Co.

Although OERC handles all scrap metals, the company primarily is looking to grow in the nonferrous sector. About one-third of the material OERC receives is ferrous and two-thirds is nonferrous. About 60 percent of the company’s material is brokered, while 40 percent is processed at OERC’s yard. Chad adds that Brad has been focused on growing the brokerage side of the business, which has helped the company to export more of its materials.

“Because we’re close to Los Angeles, a lot of nonferrous can be exported there,” Brad says. “[Brokering our own material] cuts out a step in the supply chain.”

In recent months, the ferrous market has taken a bit of a hit and might face a tougher outlook in the near-term future. Chad says OERC has long-term relationships with a local steel mill in Arizona as well as other steel mills, which have helped.

“We are affected by the tide of the ferrous market, but we’re pretty well-positioned with places to sell our material,” Chad says. “We’re abreast on a lot of the issues going on, fortunately. We’re also making sure not to buy more than we can sell.”

Within the nonferrous sector, Brad says he’s been focused on avoiding risk with the current volatile market conditions, particularly with red metals. “We hedge red metals so that we’re covered,” he says. “A lot of guys won’t hedge materials, but that exposes them to risk if markets go down. So, we hedge material to help mitigate risk.”

Looking to the future of the business, Chad and Brad say they plan to take on more leadership within the company while receiving guidance from Marc.

“Brad and I will be with the company longer than Marc, just by his age to ours, and I think we’ll focus more on nonferrous down the road, but we will still handle steel as well,” Chad says.

He adds that he doesn’t think the company will expand much through acquisition. “Just acquiring yards, you can increase volume, but you have to make sure the employees [you acquire] represent you and the company well. We want to expand smart with the right people.”

The author is managing editor of Recycling Today and can be reached at msmalley@gie.net.