SCRAP COMPANY OF THE YEAR: SMALL/MIdSIZE

2014
WINNER
SCRAP COMPANY OF THE YEAR: SMALL/MIDSIZE COLUMBUS SCRAP MATERIAL
One of South’s largest processors poised for growth
48 American Metal Market
several members of CSM’s executive team.
Representatives of Trivest were in New
York just a month after the transaction to
see the company receive AMM’s award as
Scrap Company of the Year: Small/Midsize.
The company’s growth over the past two
decades was driven by its ability to build on
‘Our approach has been to
have a yard service an 80to 100-mile radius, so we are
seeking locations outside
areas we already serve.’
—Robert Craig, Columbus Scrap Material
existing long-term partnerships, referrals
and establishing new relationship. The plan
now is to expand throughout the South with
new scrapyards and by completing targeted
add-on acquisitions. In addition to being
operations and leadership.”
Beyond ferrous scrap—including stainless—CSM handles aluminum, copper,
brass, nickel, high-temperature and special
metals, tin, zinc, plastic and paper. CSM
supplies materials directly to local foundries, steel mills, specialty mills and smelters.
The close proximity to key customers allows CSM to purchase large quantities of
scrap and to identify additional value-added
opportunities with them. The company has
designed and installed customized metal recycling programs for suppliers in an effort
to secure long-term customer relationships.
These programs allow CSM to pay fair
prices for material while balancing the value
proposition to customers and consumers.
The strategy appears to be working: the
company has retained at least 95 percent of
its top 20 customers each year over the past
five years.
The growth may seem inexorable in
hindsight, but the path was not so obvious
PHOTO: Columbus Scrap Material Co. Inc.
C
olumbus Scrap Material Co. Inc.
(CSM) is a fast-growing ferrous and
nonferrous metal recycler with five
facilities in the South. Its suppliers range
from Fortune 500 manufacturers to regional
and local businesses to daily peddlers, and
its consumers include a wide range of foundries and steel-processing facilities.
The Columbus, Miss.-based company’s
business model is driven by value-added
programs and services, including logistics
management, materials sorting, cutting, baling and upgrading material.
“Out of our five operations, three are
strictly industrial,” CSM president Robert
Craig said. “That means they do not process
obsolete grades and do not accept material
from the public. More than 90 percent of the
company’s volume is high-grade industrial
material. Our material flows are very consistent and are composed of high-quality, clean
material.” CSM’s five operations handle a
total of 15,000 to 18,000 tons per month.
The company, one of the South’s largest
privately held processors and distributors of
scrap and secondary metals, was founded in
1956 by Henry Weiss. Gregg Rader joined
Weiss in 1991 as vice president of operations and later married Weiss’ daughter, Welissa. The couple purchased the company
from Weiss in 1996 and have grown the
business from revenue of $3 million in 1996
to almost $100 million today. Rader’s goal is
to grow the business to $200 million.
Under Rader, the company has expanded from its original site in Columbus, for
which the company is named, to two other
facilities in the Magnolia state—Southern
Scrap of Meridian LLC in Meridian and
Tri-State Recycling LLC in Iuka—and two
operations in neighboring Tennessee: Memphis Industrial Scrap Recycling and Tennessee Scrap Recycling in Chattanooga. Using
a fleet of trucks, box containers, rail cars
and barges, it stretches across the southern
United States.
Miami-based investment firm Trivest
Partners LP recapitalized CSM in May after a year of discussions, retaining management, staff and operations. The transaction
with Trivest allowed the Raders to retain
ownership and expand ownership to include
a hotbed of electric-arc furnace operators,
the Southeast continues to take share from
other manufacturing regions.
“The scrap industry has been in consolidation for years,” Craig said. “Our regional
approach has been to have a yard service
an 80- to 100-mile radius, so we are seeking to grow in locations outside areas we
already serve. We would be willing to build
greenfield operations, but our preference is
to buy existing operations with good quality and solid environmental performance.
We would buy the business, but maintain
August | September 2014
from the outset, Craig said. “I joined the
firm late in 2004, when Mr. Rader had just
two yards. We did a lot of soul-searching
and prayed to the Good Lord for guidance
on how to grow the business. But in the end
it was not so difficult. We have a small leadership group. We sit around a table and talk
and make decisions.” That approach has
resonated with the operations that CSM
has acquired so far, with the new ownership
adamant about supporting the continuation of the business model.
Gregory DL Morris
www.amm.com