Security Shredding & Storage News Mar/Apr2011

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Volume 8, Issue 2

March / April 2011

Security Shredding Storage News

Official Publication of the Security Shredding & Paper Recovery Markets Visit us online at www.sssnews.com

Attn: Readers !

Are you looking for Products, Equipment or Services for your business? If so, please check out these leading companies advertised in this issue:

Collection & Storage Containers All Source Security Container Mfg. Ltd. – pg 5 Bomac Carts – pg 4 CK Designs Manufacturing Inc – pg 18 Jake, Connor & Crew – pg 24

Lifting Systems Custom Industrial Products Inc – pg 17

Lock & Locking Systems Lock America Intl. – pg 17

Mobile Truck Shredders Alpine Shredders Ltd – pg 13 Vecoplan LLC – pg 6

Moving Floor System Keith Manufacturing – pg 8

Paper Balers Excel Mfg., Inc. – pg 17 Harris – pg 17 IPS Balers, Inc. – pg 17 NEXGEN – pg 21

Andy Sokol and Gina St. George demonstrate some of the scanning equipment at CopyScan in Ft Lauderdale, FL. Photo courtesy of CopyScan.

Replacement Parts Dun-Rite Tool – pg 8

Stationary Shredders & Grinders Allegheny Shredders – pg 21 Cresswood Recycling Systems – pg 7 Schutte-Buffalo Hammer Mill, LLC – pg 23 UNTHA America – pg 2 Waste Revolution – pg 17

CopyScan Encouraging Businesses to Expand Into Document Scanning

By P.J. Heller

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Waste commodity purchasers Commodity Resource & Environmental – pg 19 Dan-Mar Components – pg 15 SMS Memory – pg 13

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ndy Sokol is absolutely convinced that document destruction companies are “missing the boat” by not offering document scanning services for their clients.

The same, he says, is true for document storage companies that currently only scan-ondemand for customers who need a particular document or file.

“Shredding businesses and document storage businesses are really missing the boat if they’re not offering scanning,” Sokol says “If you’re shredding, you’re only doing a piece of what the customer really needs. If you’re storing, you’re only providing a piece of what the customer needs.

“Storing, shredding and scanning, all three go hand in hand,” he insists. “They complement each other really well. If you’re not offering them, you’re not providing a complete service for the customer and they’ll look elsewhere to find what they need, because most people want to do business with a single-source provider.”

Sokol, who owns and operates both CopyScan and recordSHRED in Fort Lauderdale, Fla., says he has been asked so often for advice and suggestions on how to incorporate scanning services into a shredding

business that he decided to set up a training program for others.

His first scanning school class is scheduled for June 24-26 — the inaugural class originally scheduled for April 22-24 was moved due to it being Easter weekend — and includes two days of classroom instruction in a beach area hotel and a half day of hands-on training at his CopyScan facility. He can accommodate up to 30 people in the class.

Continued on page 3

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Inside This Issue An Idea That I “Borrowed” From a Car Salesman That Increased My Referrals … Dramatically 7 Hallmarks of a Great Workplace

10 Plying the Paper Trade 12 Equipping Business for Success in an Improving Economy

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Security Shredding & Storage News

CopyScan Encouraging Businesses to Expand Into Document Scanning Continued from page 1

PUBLICATION STAFF Publisher / Editor Rick Downing

Contributing Editors / Writers P. J. Heller Ken McEntee Norm Spitzig William G. Sutton Jay Wallus

Production / Layout Barb Fontanelle Christine Pavelka

Advertising Sales Rick Downing

Subscription / Circulation Donna Downing

Editorial, Circulation & Advertising Office 6075 Hopkins Road Mentor, OH 44060 Ph: 440-257-6453 Fax: 440-257-6459 Email: downassoc2@oh.rr.com www.sssnews.com For subscription information, please call 440-257-6453 Security Shredding & Storage News (ISSN #1549-8654) is published bimonthly

by Downing & Associates. Reproductions or transmission of Security Shredding & Storage News, in whole or in part, without written permission of the publisher is prohibited.

Annual subscription rate U.S. is $19.95.

Outside of the U.S. add $10.00 ($29.95).

Contact our main office, or mail-in the subscription form with payment. ©Copyright 2011 by Downing & Associates.

Printed on 10% Post-Consumer Recycled Paper

The class is aimed at people in the document destruction and records storage industries, quick printers, small business owners and legal professionals.

While acknowledging that there are other similar programs available, Sokol says what sets his Scanning 101 Bootcamp class apart is the fact it goes beyond the basics of scanning and imaging to focus on business aspects including marketing, sales and management.

“If you are new to scanning, you will learn a lot of information to get started,” he says. “If you are already scanning, you will learn how to take your business to a whole new level. “ Wh at w e ’r e teaching is how to go after lucrative markets, the types of users of s c a n n i n g t h at p ay lucratively, and how to speak their language s o yo u u n d e r s t a n d customer needs,” he adds.

T h o s e m a rke t s are primarily the legal, medical and manufacturing sectors.

Sokol, the “dean” of the scanning school, will teach the class along with training partner Gina St. George, who with 17 years of Fortune 500 corporate experience, will primarily focus on operations and helping attendees understand business systems and workflows.

“Not only will the students learn about operations and running an imaging production center, they will learn how to access different markets that need document imaging, speak the language of those customers, and close sales and gain imaging customers,” St. George says.

To drive that point home, the scanning school website warns that when working with law firms, for example, “If you are asked to scan pleadings into Summation format and OCR and Bates label them, and you don’t know what that means, you will never be able to scan documents for legal proceedings.”

Ditto for medical records — an area that is expected to be a bonanza for document scanning companies due to mandates under the new health care law as well as HIPAA requirements — which also has its own terms and alphabet soup of acronyms.

“We will teach you the language of EMR, EHR, and medical imaging,” Sokol says on his web site.

“If a doctor’s office says that they want their PHI information scanned for MD Logic and they need TIFFs and X-rays made into DICOM and you don’t know what that means, they will not entrust their medical records to your company.”

Dealing with manufacturing companies and

corporations is no less daunting, he notes, tossing out acronyms such as MRP, TQM, TPM, SAP and BPCS. “In order to sell imaging on its own, shredding company leaders need to learn a lot of new vocabulary,” he says. “If you don’t understand what your customer will do with the images, how they will access them and what system and software they are using, it will be impossible for you to do the consultative selling required to sell imaging.”

St. George agrees, noting that people are often more concerned about equipment, document handling and the scanning operation.

“They think that’s the hard part,” she says.

“That’s actually the easy part. I don’t mean to diminish it because you have to be able to do it right . . . but you can set up your production and never be able to sell it.

If you don’t understand document management and how your customers are going to use it, the way different markets are using documents and you can’t talk to them, you will never be able to sell.”

Sokol launched CopyScan in 1995 after having worked for several years as a salesman for a copy and scanning company in Miami.

Initially, the bulk of CopyScan’s work was copying and duplicating documents for law firms handling litigation. Today, with advances in technology and software, Sokol reports that the majority of CopyScan’s business has shifted from copying and duplicating to document scanning.

Scanning now accounts for about 80 percent of the business, he estimates.

While the company’s niche originally was handling work for law firms, recent federal requirements that medical facilities implement electronic health records (EHRs) has spawned a growth opportunity for CopyScan. The government’s goal is to establish an EHR for each individual in the U.S. by 2014.

As part of that effort, doctors and hospitals are being offered incentives by the federal government, typically of up to $44,000 per doctor, to implement EHR. Those funds are part of billions of dollars Congress allocated under the 2009 economic recovery package.

Sokol says those incentives will further drive CopyScan’s business, essentially allowing healthcare professionals to implement EHR with little or no out-of-pocket costs.

Sokol points out to customers that he can

“In order to sell imaging on its own, shredding company leaders need to learn a lot of new vocabulary. ... If you don’t understand what your customer will do with the images, how they will access them and what system and software they are using, it will be impossible for you to do the consultative selling required to sell imaging.”

Continued on page 9

Security Shredding & Storage News. March / April 2011

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Security Shredding & Storage News

BY JAY WALLUS

An Idea That I “Borrowed” From a Car Salesman That Increased My Referrals … Dramatically

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f you’re looking for a major breakthrough in your business, your best approach might be to start looking outside of the document industry and get on the inside of other industries. Here’s an example.

McDonald’s didn’t invent the drive through window, but did you know that McDonald’s restaurants do an average of 67% of their business through their drive through windows? Pretty impressive, huh? I’m not sure of the original “inventor” of the drive through window, but if I was going to guess, I’d say that it was (I’m dating myself here) FotoMat – the retail chain of drive-thru kiosks located in shopping center parking lots beginning in the 1960’s. Someone from McDonald’s saw the idea, then figured out how to apply the concept to their own (restaurant) industry.

And You Can Do the Same

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et’s face it, the destruction industry is becoming commoditized and prices are being driven down as more competition enters the market. So, you need an effective and measurable way to attract new clients (preferably referrals because they’re SO much easier to close) and also a way to prevent your existing ones from leaving. Right? As stated above, I’m a huge fan of learning what other people are doing to become unique in their industry, borrowing it and applying it to our shredding business, so here goes…

The biggest myth out there - that I unfortunately bought into - is that if you have “great” customer service that you’ll get referrals. I found out quickly that great customer service is the baseline measurement – a starting point and is expected. Yes, our drivers were friendly and cheerful, wearing uniforms, showed up when they were supposed to, we followed all of the security guidelines and

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Info Request #133

4 Security Shredding & Storage News. March / April 2011

we have “state of the art” trucks, but still, referrals were only coming in dribs and drabs.

Enter Car Sales Guy Referral Strategy

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he guy in this story is actually in the Guinness book of world records and earned himself a spot in the Automotive Hall of Fame. The Guinness Book states that Joe Girard sold more new cars and trucks one-on-one (not wholesale or fleet sales) than any other salesperson in the world, and then repeated it again and again and again - 12 consecutive times. Over 15 years he sold 13,001 cars or about 17 cars every week for over 750 weeks.

Now this is a guy that I could learn from! And you know what I’m looking for here…What is this guy doing to generate all of this business and how can I apply it to my shredding world? I’ve got to know. Is it a secret closing formula? Is he hiring telemarketers to do all of his calls? What did Joe do to sell so many cars?

Conclusion

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e did it by generating massive amounts of referrals. Referrals are fueled by the law of reciprocity. This law states that for everything you do, there is an equal and opposite reaction.You make your client feel appreciated and special, and they do something to make you feel appreciated and special in return. For example, how would you feel towards a vendor if they sent you a card every month telling you that they appreciated you? I bet that it would be hard to cancel their service and switch to a new vendor. Why? Because, they have created an emotional connection with you. You only do what you’re supposed to do – pick up their bins and follow security measures and they’ll do only what they’re supposed to do – pay the bill. Get it?

Back to the car sales guy Joe and exactly what he did to put the reciprocity thing into high gear.

Joe sent a handwritten card to every single client he had, 6 to 12 times a year, just to let people know that he appreciated them. He sent cards for just about any occasion and holiday that you could think of. He didn’t insert any promotions, just hand written cards. This ridiculously simple but outrageously effective system became so successful that he had to personally hire two assistants to help him manage his appointment/test drive schedule and also to assist him in writing all of his cards.

This simple idea, staying in touch with people and letting them know you care about them executed by mailing each person one card every other month, put a car salesman named Joe Girard in the Guinness Book of World Records as the best car salesman of all time.

Decision made … each of our scheduled service accounts will now get a card from us, every other month, no matter what. I input our clients into a web based system and started sending them physical cards in my own handwriting (6 times a year). The results so far are VERY GOOD! In fact, here’s an email I received from a current scheduled service account: “Jay, your cards are working …. It’s always good to be in front of your customers because you never know when you’ll be needed. My wife’s company is looking to do a purge of a ton of old files and I told her that you’re the guy …”. Notice his email didn’t talk about “state of the art” trucks, uniforms or procedures? He just felt good when he got the cards and then wanted to return that good feeling back to me and presto – when the opportunity presented itself – referral.

Truth be told, this business by referral “card thing” is a heck of a lot better than the caller who says, “Hi, I’m looking for a price on your monthly service and I was asked to get three quotes. What’s your price?” Don’t you think?

Jay Wallus is an “in the trenches” marketing professional serving the document destruction and records storage industries. His unique customer retention program is both inexpensive and fun to implement. If you’re looking for an effective way to remind customers that you appreciate their business, please contact Jay at jwallus@datashredder.net.

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Security Shredding & Storage News.March / April 2011

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Security Shredding & Storage News

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Hallmarks of a Great Workplace

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By Norm Spitzig

hat exactly makes a workplace “great?” What are the specific characteristics common to those very special workplaces that are universally recognized as the indisputable signs of a superior operation?

If there is a more basic (or fascinating) question for a workplace and the people who inhabit it, it hasn’t been found. A workplace that successfully attains the following characteristics—whatever size it might be or industry it may be in—can proudly and accurately call itself “great.”

1. A clear mission and purpose for being

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he very best workplaces in the world know—really know—who they are and what their core purpose is. They have a straightforward, concise mission statement (i.e., “who they are”) that is readily understandable and enthusiastically embraced by each and every employee. Such great workplaces have carefully identified those factors critical to their long-term success (i.e., “those services and/or facilities they must do, and continue to do, exceptionally well”) as well as their specific vision for the future (“what our workplace will likely be in five to ten years”). Great workplaces develop detailed action plans and accompanying areas of responsibility to insure that their vision for the future is more than some pie-in-the-sky dream; it is concrete, actionable, measurable and (with perseverance on everyone’s part) achievable.

2. Forward thinking, creative senior management and a caring, well-trained staff

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o workplace can remain superior over any meaningful period of time without quality leadership at the top as well as a caring, well-trained support staff. At great workplaces, everyone from the President/Chief Executive Officer to yesterday’s hire are fully committed to doing whatever it takes to insure the company’s ongoing success year-in and year-out. Equally as important, great workplaces attract people from myriad backgrounds and with varying arsenals of professional and personal skills—talents that complement and enhance each other to the benefit of all employees as well as the customer base. At a great workplace, individuality is valued and cherished, but teamwork remains first and foremost.

3. Meaningful work

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great workplace allows—better yet, encourages—its employees to do what they deem meaningful. Of course, the term “meaningful” denotes different things to different people. What is meaningful work for a Chief Executive Officer of a multi-billion dollar company may, but not necessarily, differ significantly from that of a solo entrepreneur working at home. Both can—or cannot—be genuinely viewed as meaningful work, depending on the perspectives of the individuals involved. Having said that, Malcolm Gladwell is correct when he notes in Outliers

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Shred more – Make more!

Destruction:

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Continued on next page

Security Shredding & Storage News Continued from previous page that, for most people, work is meaningful when it is sufficiently autonomous, appropriately complex, and has a perceived direct relationship between the effort invested (i.e., “time on the job”) and the accompanying return (i.e., “compensation”).

Great workplaces offer their team members the opportunity for each and every employee, irrespective of their education, talents, and experiences, to consistently do what they themselves perceive as genuinely meaningful.

4. Reasonable, understandable, and uniformly enforced work rules

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reat workplaces have rules and policies that are reasonable, understandable, and, perhaps most importantly, fairly and uniformly enforced. (If, for example, smoking is prohibited in the work environment, that means, plainly and simply, no one smokes: not the President, not the Chief Operating Officer, not the new dishwasher.) The rules and policies at great workplaces are neither capricious nor arbitrary. They are not written in language so arcane that anyone but a senior tax attorney can comprehend. Ideally, they are not written to prevent employees from doing something, but rather to set appropriate standards whereby all employees are assured the opportunity to maximize their potential. In short, great workplaces embrace rules and policies that reflect the core values of the workplace as well as the expectations of the employees and customers in a fair and logical manner.

5. An appropriate blending of tradition and innovation

W

hile great workplaces are environments where employees devote a significant amount of time to improving current products and services as well as creating new ones, they are also places where tradition and continuity are highly valued. Longstanding products and services are not whimsically eliminated to the detriment of loyal customers; rather, they are continually improved as circumstances dictate to the benefit of all concerned. At great workplaces, all are aware and proud of their company’s origins and heritage, its growth and evolution, its positive reputation in the community, its quality products and services, its mission for the present, and its vision for the future.

Check out www.CertifiedElectronicsRecycler.com to learn more about the program and how to become certified. Extensive implementation resources are available to program members. You may also contact David Wagger, ISRI’s Director of Environmental Management, at 202/662-8533 or davidwagger@isri.org.

Continued on page 8

CRESSWOOD - Empowering ‘Eco-Superior’ & Profitable Recycling Since 1978!

"The Cresswood Shredder is a perfect fit for Gateway's secure document and product destruction requirements. It's universal enough to handle the niche market material we shred, while putting it into a saleable commodity particle size. As a Recycler, the 'uniformity of particle gradation', and control of output characteristics are as important as volume and production rates. The Cresswood does it all for us."

"When we shopped for a shredder, structural integrity was our # 1 criteria. We looked around, but the quality of Cresswood's engineering and workmanship was far superior to the competition. From the date of delivery in 2007, we have had no problems with the Destroyer - just normal preventive maintenance on the machine - and we're not foreseeing any. We're that satisfied with the Cresswood."

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GATEWAY PRODUCTS RECYCLING, INC., headquartered in Cleveland, Ohio is a 'full-service, full-circle' recycling company that specializes in secure destruction of sensitive materials and products for businesses throughout the state.

A Cresswood HF-7870-125 Shredder is the core of Gateway's closed-loop, verified off-site shredding system for documents, books, coupons, packaging, and a range of confidential products.

Read the Gateway cover profile article in SSSNews Jan./Feb. 2011 issue.

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Info Request #134

Security Shredding & Storage News. March / April 2011

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Security Shredding & Storage News

7 Hallmarks of a Great Workplace Continued from page 7

6. Open communication among all vested parties

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www.dun-rite.com

reat workplaces have regular, honest communication between everyone involved with, and interested in, the long-term success of the company. Staff and customers are always kept informed of, and are encouraged to appropriately participate in, the company mission, vision, policies, and procedures as well as any significant changes under consideration. In other words, they are given adequate opportunity to convey their ideas and suggestions to company leadership. Managers at great workplaces are unwavering in their commitment to “management by walking around,” because they know that this time-tested practice promotes open communication and minimizes potential problems. Great workplaces typically have company newsletters, both electronic and print, that regularly and effectively communicate the various opportunities available to staff and customers in an accurate and timely manner.

7. Fiscal responsibility

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Info Request #143

ast, but certainly not least, great workplaces are fiscally prudent in the manner they operate.

They have detailed, multi-year business plans that feature accurate income and expense projections, conservative cash flow estimates, sufficient funding for research, development, infrastructure maintenance, renovation and expansion, and realistic cash flow

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Info Request #106

8 Security Shredding & Storage News. March / April 2011

projections. In addition, great businesses rigorously monitor and adjust their financial plans on a regular basis and as circumstances dictate. The know exactly how much money will be required to provide the quality products and services their customers want and expect as well the specific costs associated with them.

The long-term financial well-being of the workplace remains a high priority in the minds of all concerned.

A great workplace, in summary, employs happy, productive and talented people who perform meaningful work compatible with the mission, vision, and financial goals of the company. It takes constant effort and vigilance to be a truly great workplace, but the end result is well worth it.

Norm Spitzig, Principal at Master Club Advisors, is internationally recognized as an eloquent, visionary speaker and club industry expert. His talks have been well received on six continents by numerous professional associations, individual businesses, club leaders, and civic groups. His groundbreaking book, “Perspectives on Club Management,” continues to inspire and challenge business leaders worldwide, and his newer books, “Private Clubs in America and around the World” and “Murder and Mayhem at Old Bunbury,” offer insightful and humorous looks into the private club world. Both available at www.

CliveEndiveOgiveIV.com. For more information, contact Norm at normspitzig@hotmail.com, 1-352735-5693, or visit www.MasterClubAdvisors.com.

Security Shredding & Storage News

CopyScan Encouraging Businesses to Expand Into Document Scanning Continued from page 3 also provide document destruction services through recordSHRED once those medical records or other documents are scanned, providing a one-stop shop for their document needs.

“Once the documents are scanned and once everything is imported into their system and everything is the way it’s supposed to be, then the customer gives us the OK and we destroy the documents,” he says. “It’s just that simple.”

Sokol adds that while the scanning services may generate business for the shredding service, the opposite is also true. He says that by offering shredding services, customers are directing their scanning work to him as well.

Sokol got into the shredding business almost by accident. “I had no idea that shredding was even an industry,” he admits.

Privacy rules under HIPAA prompted some of CopyScan’s clients to ask the company to destroy boxes of documents.

“What happened was we went out and bought a $99 shredder from a local office supply company,” Sokol recalls. “The very first job that we did was eight boxes. It took us three days. It was just a nightmare and I didn’t even charge the customer. I didn’t have the heart to charge them enough for three days of labor for my employees.”

That led Sokol to start referring shredding projects to established document destruction companies.

“I’m kicking myself for doing that because I was giving money away,” he says.

As scanning customers continued to ask for shredding services, Sokol realized that there was an opportunity for a new business. He attended a NAID conference in Orlando and soon after launched recordSHRED in 2003.

CopyScan employs both standalone scanners and digital copy machines from Ricoh that can print as well as scan.

“We’re still working with law firms and sometimes our customers want us to give them a paper copy as well as an image,” Sokol explains. “It’s kind of a crazy world we live in because even though they have all these images, sometimes they want paper.”

Scanned images are typically transported on CDs. CopyScan also has the

Photo courtesy of CopyScan. capability to upload images to a client’s storage system, Sokol says.

The cost of starting up a document scanning business does not require a big investment, Sokol says, noting that the costs can easily be recouped with “one decent size scanning project.”

He reports that 2009 was a record year for CopyScan, driven in part by a Washington, D.C., law firm that hired the company to scan what Sokol thought was going to be two boxes of documents. What arrived at the facility were two 18-wheel tractor-trailers containing 47 pallets loaded with boxes of documents.

It took six months to complete the scanning and shredding; the bill came to nearly $500,000.

Sokol says he wants to share the knowledge he has gained through his scanning and shredding businesses with others. He’s not worried about the competition.

“There’s plenty of business for everybody,” he says. “That’s why I don’t have a problem teaching it.

“We’ve been approached often by other shredding companies to tell them how to get into the scanning business,” Sokol says. “So instead of me trying to give quick answers, I decided to create a training program. There’s a huge need for this. This is such a great industry. It’s exploding.

“If you already offer shredding or document storage to your customers, and if you want to grow your customer base, then you need to add scanning . . . . It works out really, really well,” he says.

Calendar of Events Waste Expo 2011

May 9-11, 2011 Dallas, TX www.wasteexpo.com 30th Annual Michigan Recycling Coalition Conference

May 10-12, 2011 East Lansing, MI www.michiganrecycles.org Indiana Recycling Coalition’s 22nd Annual Conference

May 10-12, 2011 Indianapolis, IN www.indianarecycling.org

31st Annual Washington State Recycling Association Recycling Conference

30th Annual Northeast Resource Recovery Association Recycling Conference

May 22-25, 2011 Pasco, WA www.wsra.net

June 6-7, 2011 Manchester, NH www.nrra.net

Colorado Association for Recycling’s 22nd Annual Recycling Summit

Missouri Recycling Association Annual Conference

June 5-7, 2011 Breckenridge, CO www.cafr.org Recycle Florida Today

June 5-7, 2011 Sarasota Beach, FL www.recyclefloridatoday.org

June 6-8, 2011 Branson, MO www.mora.org Illinois Recycling & Waste Management Conference

June 6-8, 2011 Springfield, IL www.illinoisjointconference.com

Security Shredding & Storage News. March / April 2011

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Security Shredding & Storage News

Plying the Paper Trade Despite dramatic changes in the recovered fiber and papermaking businesses, brokers still play a vital role in the supply chain, offering benefits to scrap paper generators, packers, and consumers.

By Ken McEntee

F

or years Walter Bobruk, owner of Agency Fibers (Huntsville, Texas), supplied a southeastern U.S. tissue mill with recovered fiber. “I was shipping them some very clean paper from a printer in Louisiana,” he recalls. “The buyer at the mill said he loved the stuff,” and he “loved working with small brokers like me because we have the best paper.” So Bobruk was shocked when the buyer called to announce a change in the mill’s buying policy. “If I couldn’t send him at least 500 tons a month, he’d have to cut me off as a supplier,” Bobruk recalls him saying. “He loved the material, but he wasn’t able to take it anymore.”

For scrap paper brokers--particularly smaller operators--this scenario is one example of how the business has changed dramatically in recent years.

The domestic paper industry has consolidated, resulting in the closure of numerous mills. “It’s not easy for the small broker who worked with all those mills that have consolidated and closed down over the last 10 to 20 years,” Bobruk says. “There are fewer and fewer places in the United States to sell your product.” Further, many mills now have their own procurement divisions, some of which have chosen not deal with independent brokers. Many scrap paper sources either are drying up--rendered obsolete by the digital age--or are increasingly controlled by municipalities and/or their contracted waste haulers. As Tom Wood, a broker with National Fiber Supply Co. (Chicago), puts it, “the playing field has shrunk.” And an ever-increasing portion of U.S. recovered paper is exported.

These and other changes prompt Bobruk to ask, “How does a small, independent broker who doesn’t have his own plant and supply survive?” Indeed, to Robert Cook, owner of Cook Paper Recycling Corp.

(Kansas City, Mo.), one sign of the times is that “you don’t see new brokers coming on board.” With the walls “closing in on the independent brokerage,” the current players must be “very aggressive” to maintain enough business, he says. Even larger brokerage operations have had to adjust as the market has evolved. Overall, paper brokers large and small are realistic about the challenges ahead--and confident in their ability to meet them.

The Broker’s Role

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or most scrap paper brokers today, the title of broker is a misnomer, says John Daniel, president of the Recycling Division of Federal International (St. Louis). A pure broker works on commission and doesn’t take title to the material he or she sells, he explains. “Now, we all take possession of the material, at least for a millisecond,” he says. “We’re really trading companies for our own

accounts. We buy and sell, and we actually own the product in the time between the buy and the sell.”

Daniel would describe the broker’s main function today as “making life easier for suppliers and mill buyers.” For suppliers, he says, brokers handle “difficult credit customers” and pay them faster—and often more money--than mills would pay them so they can keep shipping material. “The mills haven’t been so healthy lately,” Wood notes.

“We keep the funds rolling so the material keeps moving.” Whereas mills might take 45 to 60 days to pay brokers for the paper they buy, brokers generally pay their suppliers in 10 to 30 days. That said, “because we tend to get paid a lot slower than we pay, we take on a lot of risk,” Daniel adds. In that regard, brokers are like banks, and they must have sound capitalization and strong relationships with banking institutions to remain viable, Wood says. Brokers also “have access to markets that [suppliers] don’t have access to or [have] no interest in dealing with directly,” says Bob Kovich, a Tacoma, Wash.-based broker with Jordan Trading (Kingston, N.Y.).

On the other side of the sales equation, brokers also perform important services for paper mills. By selling to many different mills, brokers know about overall market needs and can place tonnage with the facilities that need it most, Wood says. Perhaps most important, “mills don’t want to deal with 400 suppliers, so they use maybe 10 brokers who each have perhaps 20 to 30 suppliers,” he says. Daniel concurs, noting that “many of the large, publicly traded companies that buy 50,000 to 80,000 tons of paper a month might have one person doing all their buying. Without brokers, that’s impossible--unless the buyer wants to work 120 hours a week. Brokers are able to aggregate tons from various sources and make it possible for a mill buyer to make one phone call and get a big block of tons.”

The Shifting Mill-Broker Dynamic

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rior to 1980, mills relied on brokers more than they do today, Cook says. Back then, it was more common for mills to view brokers as their partners, a vital link in the supply chain, he says. “For years we handled quantity and quality issues and provided as much contaminant-free paper as they needed.”

That began to change in 1980, when the former Fort Howard Corp. (Green Bay, Wis.) acquired Harmon Associates (Jericho, N.Y.) to serve as its recovered-fiber procurement arm. “One day we were partners; the next day we were not only their suppliers, but also their competitors,” Cook says.

This move set off what he calls a “domino effect” among other mills. The day after Fort Howard’s

10 Security Shredding & Storage News. March / April 2011

acquisition, its competitor—the former Wisconsin Tissue Mills (Menasha, Wis.)--held an emergency meeting to determine how it would respond. “The copycat mindset is amazing,” Cook says. “When the big companies see their competition doing something, they think they have to do it, too.”

In Cook’s opinion, mills that established in-house procurement divisions were shortsighted, adding layers of bureaucracy and inefficiency that eat away at their profits. “They started to pay large premiums to get some fast tonnage,” he says. “They took on a lot of overhead expenses to accomplish what independent brokers used to do for them at no cost.”

Today mills fall into one of two camps regarding independent brokers, Daniel says. Some mills are antibroker, he asserts. They think brokers “put money in their own pockets and increase the cost of paper, so the goal is to cut them out of the picture. There are plenty of paper mills that have buying arms and will do anything they can to keep brokers out.”

In the other camp are mills that seek the lowest possible fiber cost, with material delivered on a consistent basis over the long run. Brokers can provide that service in several ways, Daniel says.

For example, he notes, “more than half of the tons we sell are not accessible to mills because they come from an involuntary generator like a large printer, which can’t partner with a mill.” The printer must be able to ship its scrap paper no matter what, but there’s always the risk that the mill could go down unexpectedly or take planned downtime. That’s never a worry with a broker, who keeps the printer’s recovered fiber moving.

Daniel maintains that privately owned mills are more likely to work with brokers than publicly traded mills. “Public corporations have a lot of outside forces to deal with, like Wall Street, boards of directors, and investors,” he says. “They have controls in place on inventory and hiring. A company like ours doesn’t have the outside forces. We do what makes the most sense for our company and our customers. Private mills are in the same position.”

Daniel cites one example from a few years ago.

At the time, the market for OCC was $70 a ton.

Daniel offered to sell his entire stock of OCC to a buyer for a publicly owned mill for $50 a ton, but the buyer refused, saying it was an inventory issue.

“I said, ‘This is crazy. This is the cheapest you’ll ever get OCC,’” Daniel recounts. He held onto the bales, and 90 days later the mill buyer purchased the same OCC for $120 a ton. Had he made his original offer to buyers at a privately owned mill, Daniel says, he’s confident “they would have found a way to take the $50 corrugated because it was on sale.”

Continued on next page

Security Shredding & Storage News Continued from previous page Noting other benefits of working with a broker, Wood says he can provide fiber to mills on an asneeded basis along with valuable expertise. “If the end user needs 1,000 tons of hard white envelope, we know where to get it and how much it’s going to cost because we live and breathe this stuff every day,” he says. “With some of the large mills, maybe the person buying the scrap paper has other responsibilities and isn’t able to keep up [with] the market on a daily basis. We have 12 brokers working the phones all day, every day.”

Though most businesses consider “cutting out the middleman” a time-tested strategy for reducing costs and increasing efficiency, it doesn’t always happen that way, Kovich says. “In a perfect world, somebody who has paper would … sell it directly to a person who wants to use that paper, and the person who needs the paper would go directly to the person who controls the supply of that paper,” he says. “But there is no perfect world out there. Everybody has a portfolio of suppliers and customers, and those portfolios include brokers.”

another niche, the use of pre-printed business forms has declined. “We used to get the scrap paper from the major business-forms printers, but now people are printing their own forms from their computers,” Cook says. “There’s less and less paper available.

That’s the biggest problem we face.”

Demand trends affecting brokers include the greater influence of the export market, even though 62 percent of all U.S. recovered fiber--including 71 percent of all OCC--is consumed domestically.

“A brokerage has to know the export market these days,” Wood says. “You always hear about the big Chinese buyers, like America Chung Nam”--the primary supplier to Nine Dragons Paper, China’s largest papermaker—“but there are a lot of other international consumers that need paper.” To compete in the export market, brokers must know the key consumers and establish relationships with them to “get the best prices for suppliers and ensure long-term movement of their material,” Wood says.

“That’s one of the biggest changes we see today.”

Larger brokerage firms say they’re well-suited for such work. These firms, some of which have multiple locations and their own processing plants, typically

employ specialists in areas such as transportation, financial instruments, and foreign languages to better serve the growing export market. The result, Wood says, is that “some people whom we did not do business with 15 years ago have become allies. … Maybe somebody we compete with regionally doesn’t know the export market as well as we do, so we can help them there.”

Despite the many challenges, paper brokers assert there’s still a place in the industry for this specialized business.“Some people say they miss the good old days, when brokers got rich from large margins on minimal tonnage, but I never saw those days,” Daniel says.“This business is very competitive, and I can name five competitors that drive me mad on a daily basis, but it’s still a good business.”

Ken McEntee is editor and publisher of The Paper Stock Report and Paper Recycling Online (www. recycle.cc). This article was reprinted with permission from the March/April 2011 issue of SCRAP magazine (www.scrap.org) - a publication of the Institute of Scrap Recycling Industries (ISRI). Visit their website at www.isri.org.

A Changing Business

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ot long ago, the annual Paper Week conference was a jam packed affair, with paper buyers and sellers filling the lobby of New York’s Waldorf-Astoria hotel every March. More recently, the event has been much more sparsely attended, in part due to reduced travel budgets and the broader use of electronic communications. These developments have made the business less personal, some brokers say. “How much face-to-face time do you actually give your customers anymore?” Wood asks. “A lot of the dayto-day contact is done over the Internet and e-mail, but we feel it’s very important to get out and see your customers. We continually do that.”

Kovich—who calls himself “old-school”--is a strong proponent of face-to-face contact with both consumers and suppliers. Visiting suppliers is important, he explains, because “recovered paper processing and quality is always subject to change as new supplies are brought into a plant or processing equipment changes.” That’s why it’s helpful to “see what the supplier is packing to make sure the quality hasn’t changed since your last visit.”

Bobruk says digital cameras and webcams are further reducing in-person visits in the scrap paper trade. Those technologies allow suppliers to send images of loads and offer live video as they load material into their trucks, precluding the need for a broker to visit to the plant. “You can get more information and more transparency at less expense,” he concedes. “The trips to inspect bales are going to be less frequent, which means there’s going to be less need for a broker to provide that service. That will take away part of what the small guy can offer.”

In sum, Bobruk says, “technology has made things more efficient, but it also has taken the relationships out of the business.”

Beyond technology, other dynamics affect their business, brokers say, on both the supply and demand sides of the picture. On the supply side, they note waste haulers’ growing control of recovered fiber supplies and the declining use of paper in major market sectors. The use of newsprint, for instance, has diminished due to competition from Internetbased news sources, and the growing use of portable electronic reading devices (think Kindle, Nook, and iPad) is decreasing demand for printing paper. In

T

Becoming a Broker

o get a sense of the future of the paper brokerage business, it helps to understand how today’s brokers got their start. There are many paths to brokerdom, veterans of the business say.

“There’s no set rule for what you have to do or what experience you need to be a scrap paper broker,” Tom Wood of National Fiber Supply Co. says. “Generally you should be a self-starter and you should be able to build relationships.” Beyond those basics, paper brokerage is a business that takes time to learn. As Wood puts it, “we hired four young guys 10 years ago, and it took them a good six or seven years to get their feet wet and know what they were doing.”

Most brokers say a personal contact helped them get their foot in the door. In Wood’s case, his mother-in-law’s cousin, a National Fiber owner, got him started. “He liked me and asked if I had ever considered selling scrap paper,” he says. He decided to try the business, starting off in sales and service. “It happens that way. A lot of it is who you know.”

Robert Cook of Cook Paper Recycling Corp. followed a different path into the paper trade.

After earning his college degree and serving in the U.S. Navy, he went to work with Armstrong World Industries, which transferred him to Kansas City, Mo., where he and his father-in-law started a scrap paper supply business.

Walter Bobruk of Agency Fibers became a recovered paper broker after gaining some experience in the solid waste business. After running routes for a waste hauler, he worked a short stint at recycling plant, and then decided to try his hand at selling scrap paper. He visited World Fibers, a Houstonbased brokerage, which invited him to hang out with its brokers for a few days to learn the business.

In the end, the company hired him at $250 a week, plus commission, he recalls. When World Fibers went under a couple of years later, Bobruk started his own brokerage company and signed a marketing agreement with Canusa Hershman Recycling Co. (Branford, Conn.). The marketing agreement is a win-win situation, he says. He concentrates on buying and selling while relying on Canusa Hershman for support services, such as logistics and financing.

Bob Kovich of Jordan Trading has a similar situation. He buys recovered paper—and does some sales--from an office in Tacoma, Wash., while Jordan handles the bookings and financing from its headquarters in Kingston, N.Y. “We have a staff that deals with the steamship lines and the banking and credit issues,” he says. “We also have people who can speak [the native] languages where we sell tons.”

Kovich began his career as a management trainee at a Weyerhaeuser sawmill before becoming supervisor at the company’s recycling plant in Portland, Ore. After moving into sourcing at that plant, he transferred to Dallas as a regional marketing manager and later joined Browning-Ferris Industries in the same fiber marketing role before moving to Georgia-Pacific, where he sourced fiber and became the buyer for the company’s Toledo, Ore., mill. He got into the brokerage business when he joined Jordan Trading.

And what of the next generation of brokers? How will they enter the business? According to Bobruk, up-and-coming brokers must be young, with lots of energy, good business sense, and solid communication skills. Due to the capital requirements of becoming an independent broker, Bobruk sees more opportunity for young brokers in building a career in an existing brokerage operation. Onthe-job training is still the best way to learn the brokerage business, he asserts. He advises aspiring brokers to train in a scrap paper packing plant for a year to gain hands-on experience with the paper grades, and then move into the office to work first as a transportation assistant, then as an assistant to an “old pro broker.”

Security Shredding & Storage News. March / April 2011 11

Security Shredding & Storage News

Equipping Business for Success in an Improving Economy

By William G. Sutton, CAE President, Equipment Leasing and Finance Association

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cquiring equipment to operate and grow your business is critical, and for smart business owners, equipment financing is a key acquisition strategy. Equipment financing is tailored to individual business considerations, including that of maintaining cash reserves.

The current market situation finds equipment financing as vital and available as ever, enabling organizations to secure the assets they need.

Equipment financing provides many benefits that fit the operational and financial objectives of businesses, from Fortune 100 corporations to one-person operations. A deeper understanding of these benefits will enable organizations to strategically leverage equipment financing not only during improving economic conditions, but for any business cycle.

Growing Confidence Creating Demand for Equipment

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n improved business outlook provides encouraging evidence for businesses to stop putting off acquiring new equipment or replacing or updating existing equipment.

Promising signs of increasing business confidence, spending and investment include the results of a Duke University/CFO Magazine Global Business Outlook Survey released in December 2010, which shows that chief financial officers in the U.S. are becoming more optimistic about the economic outlook for 2011. They expect to raise company earnings by 20 percent and increase capital spending by nine percent.

Additionally, nearly one-third of small business owners said that as of the start of 2011 economic conditions for their businesses are getting better, according to Discover Small Business Watch.

Thirty percent—the highest percentage since March 2008—said they will increase spending on business development, including capital expenditures.

Increasing optimism prevails in equipment finance as well. The Monthly Confidence Index for the Equipment Finance Industry, which reports a qualitative assessment of prevailing business conditions and future expectations, reached its highest level in January 2011 since the index originated in May 2009. The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index, which reports economic activity for the $521 billion equipment finance sector, also

showed new business volume for the fourth quarter of 2010 was up more than 20 percent over the fourth quarter of 2009.

Benefits of Equipment Financing In Uncertain Conditions

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espite the tangible gains businesses are experiencing, economic recovery is being hampered by unemployment, the housing market slump and durable goods data, among other issues. The Duke/CFO Survey noted CFOs are concerned about consumer demand, pressure on profit margins and the difficulty of planning during uncertain economic times, with half of CFOs planning to hold onto cash. These are conditions that are well suited for equipment financing, since it: • enables expense planning • maintains cash flow • preserves capital • requires no down payment • can provide 100 percent financing.

The flexibility of equipment financing, especially leases, is another key benefit that can enable customized solutions for a business’s accounting, tax or cash flow needs. Leases are available that allow for seasonal business fluctuations, lower monthly payments while a project is ramping up and the equipment is not yet generating revenue, and other specific circumstances a business may experience.

Availability of Credit

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ccess to credit is one of the many benefits equipment financing provides in a restricted credit environment. The Duke/CFO Survey reported that credit conditions are somewhat improved over a year ago, but among small firms, credit still remains tight. Credit approvals in the equipment finance industry are historically higher than those for bank loans, and have been improving steadily, according to data from the ELFA. The role of the equipment finance industry in providing credit to businesses has wider economic impact, since in a typical recovery most job growth is generated by small firms.

Advantages for All Business Cycles

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n addition to market-sensitive considerations that make equipment financing attractive to businesses, its operational advantages provide benefits in all economic cycles:

Access to Equipment Expertise

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any equipment finance companies have special relationships with manufacturers and distributors. This expertise also enables the best possible lease payment terms since their knowledge and experience with various equipment types allow equipment finance companies to accurately set the residual rate—the value of the

Continued on next page

What Is Equipment Finance?

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ost businesses require equipment in order to operate and, in many cases, to make money.

Each business has to make the best procurement choice based on numerous factors such as cash flow, balance sheet impact and available credit lines.

A business can use equipment finance to acquire equipment, raise capital from owned equipment, and manage its capital structure. Equipment finance offers flexible choices that can work with diverse objectives of most businesses.

Equipment can be financed for virtually every sector of industry. In fact, businesses that finance equipment range from Fortune 100 corporations to one-person operations in a variety of endeavors.

Diverse as these companies are, each has this in common: efficient allocation of capital for the employment of plant and equipment. Owning equipment is incidental.

Providers of equipment finance also offer a broad range of capital solutions. To make the best choices of how to finance these capital assets, a business must determine which options best suit its need for capital and capital goods, as well as the optimal financial structure for its business.

Learn more at www.EquipmentFinance101.org

12 Security Shredding & Storage News. March / April 2011

Security Shredding & Storage News

Equipment Obsolescence Management

The convenience of having equipment managed by a third party, such as an equipment financing company, essentially outsources the equipment management function.

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unding equipment such as IT, communications and medical/healthcare equipment through leasing, loans or other financing arrangements helps manage equipment obsolescence by enabling updates. Certain leasing finance programs can allow for technology upgrades or replacements, so the risk of being caught with obsolete equipment is lower with leasing than with other equipment acquisition methods.

Valued Equipment Consulting

No-Hassle Equipment Disposal

Equipping Business for Success

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inancing also allows upgrading without having to manage equipment disposal and other ownership burdens. Particularly with computers and other technology devices, disposal can be a complicated issue, governed by federal, state or local regulations, which equipment finance companies are well positioned to handle.

Better Risk Management for Risky Times

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he risk of equipment ownership is a consideration for businesses regardless of business cycles.

Investing in large capital expenditures represents a big financial risk, especially to small companies.

Even with low interest rates that make purchasing attractive, the potential consequences of ownership can erode the upfront benefits. Risks incurred from managing assets, such as inconvenience, inexperience, obsolescence and loss of profitability, can be dramatically reduced through the transfer of equipment ownership to the equipment financing company. Financing removes many unnecessary risks, allowing businesses to focus on their core competencies.

Outsourcing Equipment Management

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usinesses have cut back staff significantly over the last few years, and most businesses lack the resources or knowledge to efficiently manage and sell their old equipment and purchase new.

www.alpineshredders.com

leased equipment at the end of the lease term—for your equipment type.

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ost importantly, the equipment financier can be considered a valued consultant, providing additional benefits through lifecycle asset management solutions. Financing companies can provide dependable asset management, which helps businesses track the status of equipment, schedule upgrades, and receive full equipment lifecycle services from installation to disposal.

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quipment leasing and financing plays a significant role in helping all types and sizes of commercial businesses in the United States to acquire the equipment they need with increased flexibility, regardless of business conditions. The role of the equipment finance industry in funding the capital expenditures businesses need to operate and grow contributes not only to businesses’ success, but to U.S. economic growth.

Businesses who want to learn more about how they can incorporate equipment financing into their business strategies may visit www.

EquipmentFinance101.org. This informational website has a wide range of resources, including a review of the various types of financing, a glossary of terms, a lease vs. loan comparison and questions to ask when financing equipment.

info@alpineshredders.com

Continued from previous page

William G. Sutton, CAE, is president of the Equipment Leasing and Finance Association, the trade association that represents companies in the $521 billion equipment finance sector, which includes financial services companies and manufacturers engaged in financing capital goods. This year the ELFA is celebrating 50 years of equipping business for success. For more information, please visit www.

ELFAOnline.org. ©Equipment Leasing and Finance Association 2011.

Reprinted with permission.

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Security Shredding & Storage News. March / April 2011 13

In the News PRISM International’s Foro LatinoAmericano Breaks New Ground at Annual Conference

Equipment Leasing and Finance Association’s Survey of Economic Activity

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February New Business Volume Up 28 Percent Year-over-year

he 2011 PRISM International Annual Conference has evolved into new territory. For the first time, Spanish-speaking members of the association will have a unique event that is presented in conjunction with the Annual Conference. The Latin American Forum features two days of educational sessions in Spanish and focused on unique Latin American records and information management issues.

As Latin American economies have rebounded, the records and information management industry has expanded, creating more opportunities operators in the region. In some cases this rapid growth has spawned the creation of new national associations to service the growing market in commercial information management services. PRISM International has forged affiliation agreements with two national organizations, ABGD (Associação Brasileira das Empresas de Gestão de Documentos) Brazil, and AMEGA ASOCIACIÓN MEXICANA DE GESTIÓN DE ARCHIVOS, Mexico. Both organizations will be well represented at the forum.

In addition to educational opportunities in Spanish, the format of the Forum also strongly promotes cooperation, forging business alliances and friendships and the same type of networking and information sharing that have become the hallmark of PRISM International conferences.

Registration for the Foro LatinoAmericano can be purchased separately or is included with full membership to the PRISM International Annual Conference.

Forum attendees will have access to the PRISM International exposition, which features the latest in products and services designed for use in the commercial information management industry. This includes a number of new products and services that will be introduced at the exposition.

For those who are not members and may be unfamiliar with the organization, PRISM International is pleased to offer a limited free pass offer. This pass provides limited access to PRISM International events held on Thursday, May 12, and includes access to the opening sessions featuring marketing guru Tom Adams, and industry sales expert Joe Nezi; access to more than 20 industryrelated roundtable events, and access to the PRISM International exposition for interaction with industry vendors. For more information about this free pass program, please contact PRISM International Director of Member Development John Ulmer at john@prismintl.org or by phone at 865-330-3533.

PRISM International is a trade association with members in more than 65 countries representing businesses that offer commercial information management services including paper records storage and management, data protection services and media vaulting, secure destruction services, and imaging and conversion services. For more information about PRISM International visit www.prismintl.org.

WV’s Oldest Manufacturing Site Becomes Green Again

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alltown, WV–According to journal-news.net, Ox Paperboard’s Halltown paper mill is expanding, cleaning up and upgrading equipment to create at least 20 new jobs and improve recycling efficiency. Some three years and $1.6 million have been spent to rehab West Virginia’s oldest continuous manufacturing site, which dates from 1869. Among the projects on the 53-acre site: to upgrade and rebuild the No. 1 paper machine, to rebuild the screening and stock prep area and to add late model paper-making technology that uses less water and energy. Ox has upgraded machine controls, improved safety conditions and performed environmental site assessments.

Ox also worked with Ashland Chemical and Garratt-Callahan on water management. The mill currently recycles 1.3 million gallons of process water a day and the paper machine upgrade and new automated controls mean it can close the loop for its effluent process water. The project should be done by the end of summer.

Ox expects to produce 75,000 tons of paper annually from recycled waste fibers, saving 1.27 million trees a year from harvest, 5.9 million gallons of oil and 250,000 cu yd of landfill space per year.

14 Security Shredding & Storage News. March / April 2011

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ashington, DC, March 23, 2011— The Equipment Leasing and Finance Association’s (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $521 billion equipment finance sector, showed overall new business volume for February was $4.1 billion, up 28 percent compared to the same period in 2010. Measured against the prior month, February volume was down a tick. And, it is worth noting that only 10 percent of responding organizations reported declining volume activity when compared to the year-earlier period.

Credit quality continues to be mixed. Receivables over 30 days increased to 3.1 percent in February from 2.8 percent in January, but declined by 47 percent compared to the same period in 2010. Charge-offs increased slightly, from 0.9 percent in January to 1.0 percent in February, but showed dramatic improvement over the same period in 2010.

Compared to the year-earlier period, credit standards eased as new application approvals increased to 76 percent in February. And, 61 percent of participating organizations reported submitting more transactions for approval during the month, up from 56 percent of responding organizations in January.

Finally, total headcount for equipment finance companies remained flat for the last four months, but was down four percent year-over-year. Supplemental data shows that the construction and trucking sectors once again led the underperforming sectors in February.

Separately, the Equipment Leasing & Finance Foundation’s Monthly Confidence Index (MCI-EFI) for March is 72.4, a new high since the MCI was launched in May 2009, and an increase from the previous high of 71.6 in February. For more detailed information on the MCI-EFI visit www.

LeaseFoundation.org ELFA President and CEO William G. Sutton, CAE, said, “Both performance indices—the MLFI and MCI—show reasons to be optimistic about the equipment finance sector as the economy slowly recovers and the demand side of the capital investment equation picks up steam.”

ECS Moves Electronics Division to Stockton Plant

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anta Clara, CA–ECS Refining, a recycling and end-of-life services company that specializes in electronics and industrial equipment, has purchased a 263,000 square foot facility in Stockton, CA, to house its electronics division in a new, state-of-the-art recycling plant and serve as a major regional center for ECS Refining Electronics Recycling Division. The company will move its primary California electronic recycling operation to the new facility, which will serve as the company’s western regional processing plant, with the capacity to handle more than 25 million pounds of materials per month. It is four times the size of the company’s current Santa Clara operations, provides the ability to deploy new processes and technologies that provide for cleaner and more recyclable commodity streams of material from the huge volume of e-waste the company currently processes.

The company’s current facilities in Santa Clara will continue as ECS Refining’s corporate headquarters and the western region’s base location for the processing of solar panels, resale operations, and precious metals recovery, with the possibility of expansion of these operations.

ECS Refining is investing significant capital in the Stockton facility, situated near two major transportation arteries on 26 acres in the ProLogis Park area. It was, until last April, the site of Kyoho Manufacturing California. ECS Refining receives from Arizona, California, Nevada, Oregon, and Washington, including the more than 230 current collector partners that are members of its highly successful ecollective e-waste recycling initiative. ECS Refining is spearheading a drive to educate consumers and businesses about the importance of properly recycling electronic waste.

In the News King County, WA Wants to Require Agency Electronics Recycling

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eattle–King County in Washington State hopes to require responsible electronics recycling for all county departments, reports issaquahpress. com. The county executive Dow Constantine is asking them to recycle computer monitors, mobile phones, TVs and other discarded electronics in environmentally sound ways. This would be the first such initiative in the state and the second in the U.S., after Santa Clara County, CA. The proposed legislation also would require agencies to update surplus auction practices by requiring all electronic equipment to be in working order and to make their best efforts to work with e-Steward recyclers, which are audited yearly.

This would codify electronics recycling practices and qualify the county to earn the e-Steward Enterprise designation from the Basel Action Network.

King County would agree not to export hazardous recycling byproducts to developing countries, use prison labor in the United States or dump in municipal landfills.

King County agencies recycled more than 90,000 pounds of electronic equipment in 2010 under contract with Total Reclaim.

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3GS, LLC Appoints Chief Executive Officer – Barry Payne Joins Document Destruction Company

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GS, LLC, a Knoxville, TN based document destruction company, has announced that Barry Payne has been appointed chief executive officer.

Payne will also serve on the 3GS board of directors.

According to company officials, before joining 3GS, Payne was employed with Waste Management and was accountable for recycling operations in Pennsylvania and West Virginia. Prior to Waste Management, he had a 12year career with Iron Mountain. His last assignment at Iron Mountain was senior vice president responsible for their North America document destruction division, which experienced significant growth during his 8-years with the business unit. At his departure, Iron Mountain’s document destruction business had grown to $200M in annual revenue with more than 25 plants servicing approximately 100 markets. His first 4-years at Iron Mountain were in the capacity of region vice president within the records management division.

Barry earned his Bachelor of Business Administration from the University of Texas.

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Security Shredding & Storage News. March / April 2011 15

In the News GAO Blames IRS for Bad Fixes of IT Security

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ashington, DC–A Government Accounting Office review of the Internal Revenue Service has found that the agency “did not consistently implement controls that were intended to prevent, limit, and detect unauthorized access to its financial systems and information,” reports infosecurity-us.com. GAO claims the IRS failed to fix 74% of previously identified information security weaknesses and did not repair 16 other security flaws that it had claimed to have fixed. Among the problems cited: insufficiently restricting user access to databases only to those needed to do their jobs; not securing the system used to manage computer access requests, approvals, and review processes; not updating general ledger software; and not enabling some auditing features on some key databases.

As a result, financial and taxpayer information are at increased security risks of disclosure, destruction or errors. The IRS, in turn, says that it has “established enterprise repeatable processes which are overseen by an internal team that performs self-inspections, identifies and mitigates risks, and provides executive governance over the corrective actions of this material weakness.

The combination of all these actions makes us confident that we are steadily progressing toward eliminating this issue as a material weakness.” The agency is developing a corrective action plan to address each of the GAO’s 32 corrective recommendations.

HIPAA Fines and HITECH Cause Firms to Take Better Steps Toward Data Retrieval

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ashington, DC–According to infosecurity-us.com, the Health Information Technology for Economic and Clinical Health Act has added to the reach of the Health Information Portability and Accountability Act with new mandates for data access controls, notification of security breaches, and better retrieval of patient data. The many thousands of legacy medical records in existence offer a challenge to health care firms in an era where they cannot just store and ignore them but must actively create systems that allow them to sort out what needs to be kept, purge what is not needed, and archive and retain the remaining data for regulatory compliance, so it can be indexed and retrieved if requested.

HIPAA privacy fines have been leveled against systems that could not provide patient information on demand, with Cignet, the first such case, paying $1.3 million for a violation of patient rights and $3 million for obstructing a Dept of Health and Human Services query. HIPAA privacy rules require health care providers to supply a patient with a copy of his or her medical records within 30 days of the patient’s request.

Sims Metal Management Acquires Two European Electronics Recyclers

J

ersey City, NJ–Sims Metal Management Ltd. has expanded its European operations in the electronics recycling market by acquiring two computer and information technology asset recovery companies, Dutch-based Device and Germany’s ergoTrade. The multi-site acquisitions are a further milestone in Sims’s commitment to extend the success of its information and communication technologies asset recovery and lifecycle management business further into Europe. Device has operations in the Netherlands, Poland and the Czech Republic while ergoTrade has operations in Germany and Hungary.

Its unique setup of sites across Continental Europe will enable it to strengthen service offerings to clients with multi-national responsibilities. The financial terms of the transaction were not disclosed.

16 Security Shredding & Storage News. March / April 2011

AF&PA Recycling Award Winners Demonstrate Value of Education and Innovation

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he American Forest & Paper Association (AF&PA) recently announced its 2011 Recycling Award winners, recognizing some of the great work being done by businesses, communities, and schools across the country to recover paper for recycling.

According to AF&PA, 63.5 percent of the paper consumed in the U.S. was recovered for recycling in 2010. The recovery rate in 2009 was 63.4 percent.

Paper recovery for recycling has increased by 77% since 1990. Coupled with the renewable nature of the raw material, recovering paper for recycling helps extend the life of paper and paper-based packaging products, and is an important part of the industry’s sustainable practices.

“Recycling is a true sustainability success story, bringing economic, environmental and social benefits to communities across the country” said AF&PA President and CEO Donna Harman. “It is through the tireless and innovative efforts of those engaged in programs such as those recognized with the 2011 AF&PA Recycling Awards that we have achieved such great heights.”

2011 AF&PA Recycling Award Winners:

• Business Leadership Award – MGM Resorts International, Las Vegas, Nev. One of the world’s leading global hospitality companies, MGM Resorts International operates a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay and The Mirage. Proving that luxury and sustainability can co-exist, the corporation’s 60,000 employees recovered 10,913 tons of paper and paper-based packaging from their operations in 2010.

• Community Recycling Award – Onondaga County Resource Recovery Agency – Onondaga, N.Y. With the leadership of the OCRRA, the 450,000 residents of Onondaga County, NY recovered 165,000 tons of paper and paper-based packaging in 2010. Curbside collection, drop-off locations, and annual shredding and book recycling events are promoted through a comprehensive education and outreach program that incorporates multi-media advertising, newsletters, emails, and Facebook fan pages.

• School Recycling Award – Purdy High School, Purdy, Mo. The Purdy High School recycling program in Southwest Missouri was initiated in 2005, with a dual goal of providing a service to the community and raising funds for the Spanish Club. Just five years later, this selfsustaining program successfully recovered 26 tons of paper – 77 pounds per student – while providing rigorous academic integration and education for the community at large.

AF&PA sponsors this annual awards program to recognize best in class efforts in education and innovation in recycling. Details regarding the 2011 AF&PA Recycling Award-winning programs, along with descriptions of previous winners’ programs, background information, free classroom resources, and more are available at www.paperrecycles.org.

Cintas Expands Document Management

P

hoenix–Cintas Corporation has acquired FACS Records Center of Phoenix, an off-site records management and storage facility founded in 1983, to increase its document management business in the Southwest.

Cintas’ document management arm offers secure document shredding, storage and imaging.

Cintas’ total operating revenue for 2Q in its fiscal year was $936.6 million versus $884.5 million in the same period last year, a growth of 6%. Cintas, based in Cincinnati, provides specialized services such as identity uniform programs and supplies such as entrance mats, restroom supplies, promotional products, and first aid and safety products to a client base of about 800,000. It is now seen as being in economic recovery and is searching out new opportunities.

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Security Shredding & Storage News.March / April 2011 17

In the News Health Net’s Lost Data Initiates Second Query

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oodland Hills, CA–Health Net Inc. is now being looked at by a second California insurance regulator for its loss of computer records that contain Social Security numbers and other personal information of some two million current and former policyholders, reports latimes.com. The problem is that nine computer drives containing addresses, Social Security numbers, financial data and other information about 845,000 California customers, employees and healthcare providers were reported missing by IBM, which manages the IT system.

The state insurance commissioner, Dave Jones says the agency is conducting a probe to determine whether the Woodland Hills Company worked hard enough to avoid and then remedy this security breach. The insurer offered two years of free credit monitoring services, including fraud resolution and, if necessary, restoration of credit files, as well as identity theft insurance.

The California Department of Managed Health Care is already looking at the situation, and Health Net is conducting its own investigation.

Piranha Grows Its Eastern Wisconsin Presence

W www.NetGainSEO.com

aukesha, WI–According to bizjournals.com, Piranha Paper Shredding LLC, Waukesha, WI, has purchased Doc U Mince of Wisconsin LLC, a Menasha document destruction and record storage firm to make it one of the largest such companies in the Fox Valley area and enable it to serve the eastern part of the state. Piranha Paper is moving into a second facility in Menasha and has plans to expand statewide and reach out into a national venue.

In 2010, Piranha Paper Shredding recycled more than 11.4 million pounds of office paper from 1,300 customers.

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18 Security Shredding & Storage News. March / April 2011

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In the News

CRE_thirdpagead.pdf

1

11/16/10

4:44 PM

NAID Announces Results of CSDS Accreditation Exams Held at 2011 Annual Conference

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he National Association for Information Destruction (NAID), the global trade association for the secure destruction industry, recently announced that 44 industry professionals successfully passed the Certified Secure Destruction Specialist exam held at the NAID 2011 Annual Conference and Exposition.

According to NAID CEO Bob Johnson, “Becoming a CSDS is a major accomplishment, and something each of these individuals and their colleagues should be proud of.” Johnson adds, “The rapid growth of the program shows that this industry consists of committed professionals eager to demonstrate their expertise and knowledge to the consumer. We expect the number of Certified Secure Destruction Specialists to continue to grow, and the consumer as well as the public at large will benefit from accredited, recognized experts protecting their data.”

NAID created the CSDS accreditation to promote and acknowledge a comprehensive understanding of the broad range of disciplines related to secure destruction. The examination itself consisted of 230 questions from 7 separate areas. All of the new class of CSDS recipients participated in the 10-week CSDS webinar series held last fall or the recent two day immersion training hosted by NAID at the University of Chicago Booth School of Business in March.

Effective immediately, the following individuals may rightfully display the CSDS designation and will be so acknowledged on the NAID website: • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

Don Adriaansen, CSDS Michael Avignone, CSDS Staci Bailey, CSDS Brad Bennett, CSDS Chris Black, CSDS Courtney Bobbitt, CSDS Chris Butler, CSDS Maxim Carpenter, CSDS Loudovic Cartright, CSDS Larry Cockman, CSDS Kevin Cole, CSDS John Daly, CSDS Heather Fitzanko, CSDS

Todd Hansen, CSDS Todd Henderson, CSDS Stephen Humphrey, CSDS Steven Innerfield, CSDS David Isham, CSDS Anthony Iovine, CSDS Brian Kaffee, CSDS Michael Kelly, CSDS Stephan Koblos, CSDS Sarah Koucky, CSDS David Kruger, CSDS Lambert Landry, CSDS

Mark Lydon, CSDS Mark McKenna, CSDS Brock Miller, CSDS John Miller, CSDS Rick Moe, CSDS Jason Moyessian, CSDS Lori Nommensen, CSDS Brian Nowak, CSDS Taylor Oberst, CSDS Lou Ann Owens, CSDS William T. Palisam, CSDS Ann Pederson, CSDS Ashton Reis, CSDS R. Stephen Richards, CSDS Steve Schneider, CSDS David Van Mullen, CSDS

David Wallace, CSDS Seth Whitten, CSDS Joe Wismer, CSDS

TITAN Mobile Shredding Absolute Shredding, LLC Allshred Services First-Shred RK Black Inc. AccuShred NW BookendZ, LLC Shred-Tech Corporation Goodwill Industries of South Florida Texas Security Shredding Allshred Services Royal Document Destruction AAA Certified Confidential Security Confidential Shredding Record Keepers, LLC Shred-it Quality Shredding Data Shredding Service of Texas Inc. Gateway Recycling ShredX by Rentacrate RK Black Inc. PC Recycler Inc. Cintas Document Destruction Recall North America First-Shred Citadel Information Management Shred-Tech Corporation Accushred NW Lincoln Archives, Inc. First-Shred Northeast Record Retention Ag Medical Systems, Inc. Citadel Information Management Ohio Mobile Shredding Classified Shredding Services Lincoln Archives, Inc. Apex Shredding Central Texas Secure Shredding Richards & Richards Office Records Cintas Document Destruction SecurShred (Shred This Inc.) Ohio Mobile Shredding Friendship Secure Document Svcs Shred-Tech Corporation

The next CSDS examinations will be held in Cincinnati, Ohio on April 19, 2011 and on May 5, 2011 in San Francisco, California. Contact NAID at accreditation@naidonline.org for complete details, including registration information.

www.creweb.com/secure

Info Request #121

Security Shredding & Storage News. March / April 2011 19

In the News

sss ad April 2011_PRISM AD 3/30/11 1:58 PM Page 1

UPCOMING CONFERENCES AND WORKSHOPS

NAID Elects New Officers and Directors at 2011 Annual Conference

A

ANNUAL CONFERENCE 2011 MAY 10-12, 2011 MIAMI, FLORIDA, USA FUNDAMENTALS OF RECORDS CENTER MANAGEMENT WORKSHOP 19-20 JULY 2011 JAKARTA, INDONESIA DATA PROTECTION WORKSHOP OCTOBER 6-7, 2011 CHICAGO, ILLINOIS, USA JOINT EUROPEAN CONFERENCE NOVEMBER 7-9, 2011 LONDON, ENGLAND As a global organization, PRISM International meetings visit three continents each year. In November PRISM International will team up with NAID-Europe to offer our Joint European Conference.

For more information or to register for these upcoming conferences or workshops.

Please go to our website at www.prismintl.org

record number of secure destruction professionals attended the NAID 2011 Annual Conference and Exposition, casting their votes for officer and director candidates at the industry’s biggest event.

“These newly elected officers and directors accurately reflect the broad cross-section of NAID membership, from small, locally owned businesses to multi-national corporations,” says NAID Chief Executive Officer Bob Johnson.

“I could not be more excited about the coming year, and where this Board will lead us. It truly is a global Board, representing an industry that is growing rapidly around the world.”

Based on the election results, the following members will serve on the Board of Directors this year: • Ray Barry of Total Product Destruction, Inc. in Spartanburg, SC ascended to the office of President for a term of one year, having served the previous year as President-elect.

• Scott Fasken of Colorado Document Security in Palisades, CO, was elected to the office of President-elect and will assume the office of President in 2012.

• Chris Isabell of iSecure in Grants Pass, OR, was elected to the office of Treasurer for a term of two years.

• Jim Beran of Shred Right in Minneapolis, MN assumed the office of Past President for a term of one year.

• Tom Huth of Allshred Services, Inc. in Toledo, OH was appointed by the Board of Directors to serve a one year term as Secretary.

Directors elected this year are: • Bruce Andrew of Shred-it in Oakville, ON • R. Stephen Richards of Richards & Richards in Nashville, TN Mr. Andrew and Mr. Richards will serve two year terms.

Continued on next page

NAID provides independent service providers with tools and programs that allow them to compete on an equal footing with any other service provider in the world.

There is only one catch!

They only work when you use them. www.naidonline.org

20 Security Shredding & Storage News. March / April 2011

• Customer Employee Training Program and Video • FACTA Brochure • Red Flags Brochure • Why Shred? Brochure • HIPAA/HITECH Brochure • Electronics Destruction Brochure • Benefits of Outsourcing Brochure • Certified Secure Destruction Specialist Accreditation Program • NAID AAA Certification • Compliance Toolkit and Training • Annual Conferences • Free Webinars • Articles on Timely Industry Issues • Government Affairs Initiatives • National Advertising Campaigns • State-of-the-art Contracts and Sample Business Documents • Professional Counsel on Industry Questions • Ethics Resolution and Enforcement • Doctors’ Office Marketing Program

In the News Continued from previous page Beginning this year, the Board of Directors will also have three dedicated seats representing each of NAID’s regional chapters. The following individuals have been elected by their respective chapters to represent their region for a term of two years, beginning in March 2011.

• Van Karas of Shred-X Document Destruction in Yatalda, QLD, representing NAID-Australasia • Dave Carey of Iron Mountain Secure Shredding in Scarborough, ON, representing NAID-Canada • Yarom Ophir of Katana SA in Geneva, Switzerland, representing NAID-Europe They join the 3 current Directors, each of whom has already served one year of the two-year terms they began in 2010: • Guy Appelman of Black Dog Shredding in Albuquerque, NM • Les Etscheidt of Document Destruction and Recycling in Cedar Rapids, IA • Lloyd Williams of Shredall, Ltd. in Nottingham, England

Joe Roberto of Shred Tech is currently in the midst of a two year term, having been elected in 2010 as the Vendor Liaison to the NAID Board of Directors.

NAID Chief Executive Officer Bob Johnson is a standing member of the NAID Board of Directors.

Would you like more information about the products or services advertised in this publication?

solutions@alleghenyshredders.com www.alleghenyshredders.com

Simply complete the form located between pages 12 & 13 and fax it to us today at 440-257-6459.

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Security Shredding & Storage News. March / April 2011 21

Product/Equipment Profiles

Waste Revolution Inc Introduces the E-Nihilator (ENP-1)

Jake, Connor & Crew Introduces “Ergonomic Line” of Products

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“D

he E-Nihilator is an affordable, compact and portable Hard Drive Shredder. Model ENP-1, dubbed “The E-Nihilator”, is a convenient, economical shredding solution for hard drives, CDs/DVDs, tapes, cell phones and other media storage devices. Providing high-capacity shredding in a quiet, compact footprint—the ENP-1 measures only 38” wide, 25” deep and 44” high, making it one of the smallest on the market-- the shredder is ideal for office settings and features all steel construction, a powerful 3 HP motor, and heavy duty casters for easy mobility, or can be loaded onto a truck for shredding anywhere on demand. The shredder is designed for minimal noise, vibration and energy consumption, while capable of shredding up to 6 hard drives per minute. The ENP-1’s feed opening can accept devices up to 5 ¾” wide, and the dual forward/reverse cutter motions quickly and automatically clears jams minimizing any downtime. Safety features include key-locked power controls and storage bin to prevent unauthorized use or access, and an emergency shut-off button.

For more information contact Waste Revolution, Inc. at (888) ewaste-8 or visit www.wasterevolution.com.

Vecoplan, LLC - VST-42e Mobile Document and Product Destruction System

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he Vecoplan VST-42e mobile document and product destruction system employs a compact, yet powerful, PTO driven, 180kVA generator to power its shredding system. But the real revolution is in this shred truck’s breakthrough technologies. Innovative features such as its QuickLink™ Plug and Play Docking Technology, its TaskMaster™ Application Management System, its MEGA throughput capability, and its many inherently Green aspects make Vecoplan’s VST-42e a State-Of-The-Art mobile shredding technology! Plus – Vecoplan’s unsurpassed Rapid Deployment™ 24-Hour Service Guarantee backs the VST-42e.

For more information contact Vecoplan at 336-861-6070 or info@vecoplanllc.com or visit their website at www.VecoplanLLC.com.

Allegheny Shredders Introduces Free 20-page Buyers Guide on Destruction Equipment

A

llegheny Shredders recently announced the release of a free 20-page “Buyer’s Guide” for those in the market for a high capacity shredder or other information destruction equipment.

The guide, “How to Avoid the 5 Most Common Mistakes in Buying Information Destruction Equipment” is full of practical information that can help you save money from the initial purchase cost through the life of the equipment.

According to Allegheny, their “Buyer’s Guide” provides an overview of shredding equipment basics, claiming the booklet steers you away from pitfalls such as buying the wrong type or size of shredder; coaches you on how to evaluate the quality of the shredder you’re considering; and shows you how to plan for present needs as well as the future growth of your business.

For a free copy, contact Allegheny Shredders at 800-245-2497 or solutions@alleghenyshredders.com or visit www.alleghenyshredders.com.

22 Security Shredding & Storage News. March / April 2011

river Friendly”, Jake, Connor & Crew’s newest innovation is our exclusive “Ergonomic Series” of consoles, bins and accessories. One such unit is our “e2Console” which is approximately 25% lighter than many similar consoles offered today, while still constructed with the same quality expected of our products. Made with our exclusive glue and dowel assembly, metal piano hinge, and solid wood construction, and optional handle, the “e2Console” is an easy console for your drivers to transport and service, while still offering the security demanded of our industry today.

Proudly celebrating our 15th anniversary, Jake, Connor & Crew is one of the world’s largest manufacturers of containers for the document protection industry.

For more information on Jake, Connor & Crew products and accessories please contact us at sales@jakeconnorandcrew.com or at 519-576-9865.

New Vecoplan Shredders Unveiled at NAID 2011

V

ecoplan recently introduced their new line of plant based security shredders at NAID 2011. This new line of shredders continues to offer all of the standard features and benefits that customers have come to expect from Vecoplan. One pass crosscut consistency with the ability to change particle size and thereby security levels, through quick, easy and inexpensive screen changes. The ability to shred, not only paper, but virtually anything including credit cards, audio/video tapes, CDs, DVDs, circuit boards, computer hard drives, cell phones, blackberries, other electronic devices, textiles, shoes, and wood. Counterfeit, obsolete, expired, and defective products, experimental prototypes, manufacturing rejects, contraband, and returned items can all be securely destroyed with a Vecoplan shredder.

For more information contact Vecoplan at: 336-861-6070 or info@vecoplallc.com or visit their website at www.VecoplanLLC.com.

Eddy Current Separator Launched by Bunting® Magnetics

B

unting ® Magnetics Co. has designed and created a new Eddy Current Separator (ECS) as part of our expanding Material Handling product line. Our ECS product features an innovative rotor which maximizes gauss intensity on the belt surface and provides excellent separation of non-ferrous materials.

“This addition to our product offering gives us the ability to provide complete systems for recycling operations around the world. Beginning with our powerful magnetic separation equipment, Bunting® now offers a diverse lineup that includes magnets, metal detectors, conveyors, magnetic pulleys and more,” stated Robert J. Bunting, the company’s owner and Chief Executive Officer.

One of the key design features of the Bunting® Eddy Current Separator is how easy it is to maintain. Our efficient design includes a drop down side panel which can easily be lowered by one person for a quick and easy belt change.

Bunting® ECS units are available in 24”, 36”, 48” and 60” widths and 96” long.

For more information visit www.eddycurrentseparation.com; call 800-835-2526 (US & Canada) or 316-284-2020; or e-mail to bmc@buntingmagnetics.com.

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• ½ the cost of a shredder with lower maintenance costs and a higher production capacity • Completely scours information to illegibility • Renders electronic components unusable and unrecognizable • Four-way reversible steel hammers crush and shatter the material • Interchangeable screens guarantee a properly-sized end product • Liberates components for easy separation and recycling • Pulverizes hard drives, printed circuit boards, CDs & DVDs, cellular phones and more

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Security Shredding & Storage News.March / April 2011 23

Leader of the Pack for 15 Years

IntegrIty

Our manufacturing process and commitment to service excellence provides you with unparalleled document security and purchase confidence.

SecurIty

We manufacture containers specifically designed and engineered for the document destruction industry.

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now available our newest line, a Driver Friendly “ergonomic Series” of consoles, bins and accessories.

Join us May 10-12 at the 2011 PRISM Conference. Stop by Booth #408.

www.jakeconnorandcrew.com A portion of our after-tax profits are donated to The JAKE Foundation, a charitable fund that supports animal and children’s causes worldwide.

All Jake, Connor & Crew consoles are CARB II compliant.

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