September/October 1998
With a solid footing in wire chopping, ferrous and nonferrous scrap processing, and new steel distribution, Shine Bros. Corp. is one small-town recycler with a big scope.
By Kent Kiser
Kent Kiser is editor of Scrap.
Toby Shine likes to describe his scrap processing company, Shine Bros. Corp., as a small, country yard with a small-town atmosphere. And in some ways, it is.
The firm is certainly located in a country setting. It was founded and is still headquartered in Spencer, Iowa, a Main Street U.S.A. town of 11,000 in rural northwestern Iowa surrounded by amber-topped oceans of corn and green seas of soybeans.
And it does have a small-town feel in that, as in small towns everywhere, everyone at the company seems to know everyone else—including their spouses and kids—and is friendly with one another.
But Shine Bros. is hardly small when you consider that it owns or jointly operates five scrap processing plants in three states and is ranked among the nation’s top-five wire choppers. Nor does the 96-year-old company think or operate on a small scale when it comes to its equipment, team management approach, quality and environmental practices, customer service philosophy, and much more.
Seems the only genuinely small aspect of Shine Bros. is its ego.
The Train to Spencer
For the story on how Shine Bros. set up shop in Spencer, you can ask Toby’s father, 89-year-old Ben. As he tells it, Russian immigrant Sam Shine and his wife—Ben’s parents and Toby’s grandparents—and Sam’s brother Harry began their new life in Chicago but heard Iowa held great opportunities. So they took a train as far as their money would take them into Iowa, which turned out to be Spencer.
The local banker lent Sam and Harry money to start their scrap business, and Shine Bros. Corp. was born in 1902. They opened shop on a small plot on Grand Avenue downtown, then went calling farmhouse to farmhouse in a horse-drawn wagon, peddling and trading virtually anything of value—pots and pans, feathers, hides, furs, wool, and scrap metal. On these rounds, which soon included young son Ben, Sam would always bring candy for the kids of the families he visited. “His philosophy was, “If ma and the kids like you, then you can do business with the old man,’” Ben recalls.
Ben joined his father and uncle full-time in the business around 1942 and soon had ambitions to expand the operations. Sam told him that if he ever moved the company off Grand Avenue, he’d go broke. But Ben did it anyway, moving the firm in 1948 to a 38-acre site about a half mile off the main street. Far from going broke, the company thrived.
In the 1940s and 1950s, Toby would follow his dad around the scrap plant, accompany him in the firm’s pickup truck, and help out on weekends and summers throughout high school and college. Among his duties, he’d salt beef and hog hides and pack wool bags. At 16, he was thrilled to be able to drive a pickup from gas station to gas station, picking up batteries. While his older and younger brothers pursued careers in teaching and law, respectively, he followed in his dad’s scrap footsteps. He especially loved—and still loves—the trading aspect of the business, the art of putting together a deal that makes both the buyer and seller happy.
Toby joined Shine Bros. full-time in 1960, the same year the company entered the new steel distribution business. Around 1965, the company stopped handling hides and, by the end of the 1970s, had phased out its large wool business. The firm’s focus was then squarely on scrap metal, particularly nonferrous.
In the mid-1980s, the Shines made an important decision about the company’s direction: “For us to stay competitive in the business, we decided that wire chopping was the smart way to go,” says Toby, now company president. The firm already handled a substantial quantity of wire, which it was burning. Wire chopping allowed it to upgrade the material as well as handle a greater volume.
Today, wire chopping accounts for about 60 percent of the Spencer plant’s business, with 30 percent devoted to ferrous scrap and 10 percent to new steel.
Not bad for a small, country scrap yard.
Far from being a one-plant operation, Shine Bros. has gradually expanded to own or jointly operate four other scrap plants. The company, in fact, was into consolidation “long before it became popular,” Toby notes.
In 1984, the firm made its first acquisition, buying Shapiro Iron & Metal in Worthington, Minn., and renaming the operation Shine Bros. of Minnesota.
The company’s next move came in 1988 when it teamed with Sioux City Compressed Steel Co. (Sioux City, Iowa) to found TJN Enterprises Inc., a new 4-acre full-service scrap facility in Sioux Falls, S.D.
Shine Bros. then followed that joint venture with the acquisition in 1995 of Estherville Iron & Metal Co., a 2-acre facility in Estherville, Iowa, owned by the Wycoff family. (One of the owners, Dan Wycoff, now serves as ferrous manager for Shine Bros. and its other operations.)
And in early 1998, TJN Enterprises purchased Watertown Iron and Metal Co. (Watertown, S.D.). In contrast to Shine Bros.’s Spencer facility, its other four operations focus primarily on ferrous scrap, which accounts for about 70 percent of their business.
A Midwest Work Ethic
In Toby’s view, Shine Bros. has built itself up through a combination of hard work and luck. His work philosophy is simple: The harder you work, the luckier you get. And he surely sets the standard, arriving at work around 5 a.m. and putting in a 12-hour day. Then it’s off to what he calls his second job—managing an affordable housing development that he and his wife Sylvia have built in nearby Lake Okoboji. While this work schedule may be daunting to some, it’s nothing extraordinary to Toby, who says, “All of our staff has that work ethic. We get in, get our jobs done, and do what we have to do.”
This hard-work mentality is what he dubs the “Midwest work ethic.” As he explains, “Living in the heartland, we have some great assets and they’re called employees. Our employees have a great work ethic. They’ll give you a good day’s work for a good day’s pay.” And, in his view, this “will outweigh any advantage anybody has over us anywhere else.”
Greg Vaughn, general manager, couldn’t agree more. “When we have even the worst winter, we have a full staff here, and when they show up for work, they’re ready to work,” he says. “They realize that if Shine Bros. succeeds, they succeed.” In fact, notes Dan Wycoff, “We’ve got workers who don’t know when to quit.”
One factor that contributes to this work ethic is that every one of the firm’s 110 employees is part of the decision-making process. Toby says that the company’s philosophy has always been to listen to its employees and give them a chance to suggest ideas and change things for the better. For example, when the firm bought its second wire preshredder, an employee noticed that the manufacturer had improved on the previous model. The employee then recommended upgrading the old preshredder to match the features of the new machine. Shine Bros. took his advice. In another example, Dan came up with the idea to acquire Watertown Iron and Metal, which the company did through TJN Enterprises.
Aside from boasting about his staff’s Midwest work ethic, Toby also prides himself on the firm’s small-town atmosphere. “When any of us walk around the yard,” he says, “every employee knows us and we know them. We know their spouses and kids.” That kind of personal relationship helps create a unified, devoted work force—a workplace family, if you will. For Toby, Shine Bros. is truly a family affair, with his dad still stopping in regularly to check out things and his older daughter Keven serving as the company’s human resources manager.
Shine Bros. has always felt an obligation to treat its family of employees well. “We knew years ago that we had to have good employees, and we’ve tried to make this company a pleasant, rewarding place to work,” Toby says, pointing to the firm’s competitive wages, attractive retirement package, and other benefits. Once a year, the firm also brings its corporate family together at a gala holiday party in its Spencer new steel warehouse, an event that attracts 600 people, including employees and their families, suppliers, and consumers. “We’re a family-oriented business,” says Greg. “The family is the nucleus of our business and because of that we’ll do what’s necessary to see to it that the family is taken care of for each of our employees.”
These efforts to build a community among employees, managers, and customers complements the Shine family’s personal involvement in the Spencer community. Over the years, Toby has served two terms on the Spencer City Council as well as a three-year term on the Small Business Advisory Council of the Chicago Federal Reserve Board. His wife Sylvia and a friend renovated the historic Tangney Hotel in downtown Spencer to not only save the building, but also the 60 jobs that went with it. Then there’s the affordable housing development on Lake Okoboji that Toby and Sylvia developed, where some of Shine Bros.’s employees live. For these and other reasons, everyone around Spencer seems to know the Shine name. One employee at a local bakery says about Toby, “He’s made quite a dent in this town.”
Toby has also extended his involvement to the scrap industry’s trade associations, climbing the ranks of the Northwest Chapter of the Institute of Scrap Iron and Steel—an ReMA predecessor—as well as having served as chairman of the ReMA wire choppers committee and on the association’s board of directors. Further, Toby has been politically active for ReMA on the grass roots level, helping recruit cosponsors in Iowa and South Dakota for the association’s Superfund amendments. In addition, Toby continues to serve on the board of the National Association Supply Cooperative—better-known as Nasco-op—the industry’s equipment and supply co-op.
Equipped for Service
In whatever ways Shine Bros. is small, it’s big in one crucial area: efficiency. “We may be in a small town, but we have the efficiency of a large company,” says Greg, asserting, “We spare no expense in making our operations more efficient.”
Most of that expense is in buying the best and brightest equipment. The truth, Toby laughs, is that “unfortunately there isn’t a piece of equipment in the world I don’t like.” Then he adds more seriously, “We’re continually adding equipment, and we’re not afraid to take a gamble on new equipment.” Shine Bros., for instance, reportedly installed the first French-made MTB wire preshredder ever used in the United States. These preshredders process wire into small pieces that can be easily and efficiently granulated by the firm’s wire chopping lines.
Shine Bros. reaps many benefits by constantly upgrading and adding to its equipment. For one, better equipment “creates easier, safer, and better jobs for our employees,” Dan says. Having the best equipment can also give the firm a competitive advantage in this age of larger competitors, he adds. New, more efficient equipment also enables the company to process material faster and less expensively. In its wire chopping lines, in particular, better equipment helps it achieve higher recovery of metal and produces a higher-quality product. In short, top-notch equipment gives Shine Bros. the ability to deliver the best product and service possible for its suppliers and consumers—and generate the highest return for itself.
According to Greg, wire suppliers ship material to Shine Bros.—bypassing other wire choppers along the way—because “they know we’ll get the last inkling of metal out of their material and that they’ll get paid what we tell them they’ll get paid.” One way the company gets the last inkling out of scrap wire is its wet separation system, which uses water and an inclined vibrating table to separate the last remnants of metal from the plastic insulation. In the wire chopping world, suppliers have to trust their wire chopper to not only recover the most wire from their loads but also pay them a fair value for the recovered metal—and pay them in a timely fashion. In all matters of money, Toby’s goal has been to make Shine Bros “a company of its word. Our suppliers trust us to process their material, give them an honest return, and pay them quickly. I guess that’s the big asset we bring to the wire chopping business.” Or as Greg puts it, “We say what we’re going to do and we do what we say.”
Consumers have different priorities—they primarily want a high-quality feedstock, delivered on time and in the right quantity. And that dovetails perfectly with Shine Bros.’s simple philosophy: Give consumers exactly what they ordered. If they want bare bright copper, that’s what they’ll receive. If they want No. 2 heavy-melt steel, that’s what they’ll get. “We thoroughly believe that the package we present and the product within that package is the best in the industry,” Greg says, asserting that the company’s “rejection and downgrade rates have to be close to the lowest in the industry.” As proof of its commitment to quality, Shine Bros. is currently working toward ISO 9002 registration, which it hopes to achieve in 1999.
Shine Bros.’s honest, quality-conscious approach is designed to give its suppliers and consumers a “comfort level,” Toby says. And that comfort level carries over into the environmental arena. By being an environmentally sound company, he explains, Shine Bros. reassures its customers that they won’t become entangled in any environmental problems down the road. “We’ve never had an environmental problem on our properties, nor do we intend to,” Toby states.
This environmental ethic is nothing new to Shine Bros. “It’s the same way we’ve run our business forever,” Toby adds. For one reason, all who work at the firm take pride in their scenic, pastoral surroundings. “We’re very concerned about not hurting our environment. After all, we have to live here,” he notes.
While the firm’s environmental philosophy hasn’t changed, “the rules have become more stringent,” Toby concedes, asserting that “these are normal business problems you have to face and handle on an ongoing basis.” And the company has risen to the challenge. For starters, it has hard-surfaced 25 of its 38 acres (with plans to cover the rest eventually), creating a clean work environment and preventing ground contamination. The firm shreds wood pallets and uses the wood chips to create a berm between its plant and the Little Sioux River that runs nearby. It’s also building settling ponds on-site to collect its storm water runoff. In addition, since 1988, the company has aggressively sought recycling options for its wire chopping plastics, working closely with the Iowa Department of Natural Resources. Currently, Shine Bros. can boast that it recycles about 50 percent of its plastic, some of which goes into livestock bedding products. And since 1990, the firm has tested and encapsulated the wire chopping plastics it can’t recycle to make them safe for disposal.
Looking for Opportunities
You’d think that, given the massive consolidation in the scrap industry and the emergence of more scrap conglomerates, a small, country scrap yard might be a little nervous. But not Shine Bros. As a small-scale consolidator himself, Toby sees the sense behind the current mergers and acquisitions. As companies become larger, “there’s got to be some savings in terms of administration, insurance, tonnage,” he says, noting that “they’ll go through some growing pains, but I think they’ll work like a charm. It looks like it’s going to be the wave of the future.”
Despite the consolidation challenge, “we still think there’s a place out there for a small family business like ours,” Toby states. In order to remain competitive, however, Shine Bros. “must control a certain amount of material, and in order to do that we’ve tried to pick up feeder yards that fit our profile.” When he says “our,” he’s referring to himself and the Bernstein family, owners of Sioux City Compressed Steel and partners with Toby in TJN Enterprises (incidentally, TJN is an acronym based on the first names of the partners—Toby and Jack and Norman Bernstein). Toby calls Sioux City Compressed Steel his sister company and jokes that the Bernsteins and he “don’t know we’re not family.”
us to make an expansion, such as broadening our trade area,” Toby says. As such, any future acquisitions by the firm would probably be in the Midwest. “We just like the Midwest work ethic,” he says, reiterating that “the people who are involved are what make it work.”
The company’s growth philosophy is, in short, a combination of both the tortoise and the hare: “We run when we have to run, and we walk when we need to walk,” Toby says. “We’re continually looking for ways to improve our position in the scrap business and our service to suppliers and consumers.”
Then, looking across his desk, Toby asserts, “We’re just always looking for opportunities. I think that says it all about our company.” —
With a solid footing in wire chopping, ferrous and nonferrous scrap processing, and new steel distribution, Shine Bros. Corp. is one small-town recycler with a big scope.