Progress at a Small Town Plant

Kenneth Swenson knew nothing about the scrap business when he launched Swenson Metal Salvage 17 years ago. His “small town scrap plant” has thrived, though, thanks to his savvy business sense and keen understanding of the new challenges facing the scrap industry.

His father came to him and said, "I know of a little scrap plant for sale. It might be a good business opportunity. I need a scrap supply for a little foundry I'm starting, and I think the businesses might work well with each other."

Swenson knew nothing about the scrap processing business but, as he says, "I was hungry to get into the business world, and this was an available opportunity."

The scrap plant, located near Swenson's hometown of Springville, Utah, had been closed for three years, and its owner, Frank O'Brien, was getting on in years and wanted to sell. His asking price of $185,000 was far too much for a poor college student. But O'Brien liked Kenneth Swenson, so he signed over a crane for Swenson to leverage at the bank for $50,000 of working capital. O'Brien received a $35,000 downpayment, and Swenson Metal Salvage Inc. was launched with the remaining $15,000. "It was one of those seize-the-moment opportunities," Swenson says, "so I jumped in and bought it."

O'Brien tutored the fledgling Swenson for two months about the different grades of scrap, helping him adjust to the new business. Swenson's first big decision was to change the company's focus. The company used to demolish old sugar plants and process the scrap steel, but Swenson decided to develop it as an industrial plant pickup service. "Every potential customer was already someone else's customer, so that made it pretty hard," he says. "We had to beat the brush to form a customer base."

Despite the initial hardships--and Swenson's own second thoughts--his timing couldn't have been better, for 1974 and 1975 were some of the best years for the scrap business. "We got into the business at an unusually opportune time," he says. "We were able to take advantage of the very good market conditions for our first couple of years of business."

Swenson's father closed his gray-iron foundry in 1978 and has since been working as a scrap buyer for his son's operation, now in its 17th year. Looking back, Swenson says, "It was a once-in-a-lifetime deal. It was a good opportunity for me. It got me into the business."

Enjoying a Small-Town Focus

Swenson Metal Salvage is the only scrap processor in Spanish Fork, Utah (population 12,000), which is located 50 miles south of Salt Lake City. Swenson, who has lived and worked in Utah all his life, humbly refers to his company of 20 employees as a "small town scrap plant," but he appreciates being small.

"We're a small enough operation that I spend my days doing a little of everything," he says. In the morning he outlines the day's activities and goals. Midmorning he reviews faxes, studies the markets, and reads publications. In the afternoon he calls customers or visits their plants. He also assists with the company's accounting and sometimes operates the scales and pays customers. "Nothing is ever the same," he says. "Every day is a new battle."

Swenson also enjoys being close to his main consumers-Geneva Steel (15 miles away), Pacific States Cast Iron and Pipe (7 miles away), and Nucor Steel (110 miles away). However, he points out, "in a town of 12,000 there's not a lot of scrap generated. We have to go outside of our town to find enough scrap to process." Even so, he rarely has to search outside the South Utah County area for material.

The ever-changing nature of the scrap business fascinates Swenson, and he delights in the social, familial nature of the work. "It's a very people-oriented business," he says, "and I like to meet and talk with people while doing business. It's also a very deal-oriented business. Nothing is cut-and-dried. There are variables in every situation, and it's fun to work within the parameters of those variables."

Though small, Swenson Metal has grown substantially since its salad days of 1973. Under O'Brien's direction, the plant used to process and ship 300 tons in a good month. Now the company ships that quantity in three days. "We have a company saying--'A hundred tons or bust,'" Swenson explains. "Our goal is to process and ship 100 tons a day." The company mainly processes No. 1 and No. 2 steel scrap, as well as approximately 50,000 pounds of aluminum beverage cans per week.

The company has also grown in terms of equipment. All the original equipment is long gone. The single crane used in 1973 has been replaced by five hydraulic cranes. "Good equipment makes more money than it costs," Swenson says. "We've tried it the other way. Buying new equipment is certainly worth the expense."

Swenson has managed to keep his company growing by following two edicts: Never run out of cash and never pass up a good deal. "We always stay in a strong cash position," he elaborates. "We have found we do much better not borrowing and paying interest on loans. This way we can take advantage of deals or other opportunities that come up."

Promoting ReMA and Recycling

Swenson reels back to recall that his company became a member of the association in 1975, and since then he and his wife have been active participants in the Rocky Mountain Chapter. "I try to stay well-informed," he says. "We never miss our chapter meetings."

Swenson extends his involvement into the community, promoting recycling in general and the scrap industry in particular. In addition to being a member of the city council for his hometown of Salem City, Utah, he sits on the city's chamber of commerce and is vice president of the South Utah County Solid Waste District, which monitors the area's solid waste programs. He sees himself as "a novice liaison between the industry and the general public, " and he has found that serving on these municipal groups has helped him understand the local government's perceptions and positions toward recycling and the scrap business. "Being a part of these committees puts me in a position to speak up for recycling and at least make people more aware and more informed when questions arise," he says.

He remembers one recent chamber of commerce meeting in which a woman stood up and said, "I've been reading about recycling in the newspaper, and we have absolutely no one here in town that recycles. I think we should do something about that."

Swenson laughs and says, "That was a good opportunity for me to explain what Swenson Metal has been doing for 17 years, what the company before us had been doing for 30 years, and what our industry has been doing for 100 years."

In municipal meetings, Swenson has found that curbside recycling has become a buzzword, but people don't truly understand the recycling process. "There are people out there who think that recycling is new and that prior to this year, or prior to Earth Day, nothing was being recycled, that everything was going to landfills. It's important for ReMA members like myself to be in public forums to tell people our story and let them know that recycling is not new."

As a roving community educator, Swenson talks with civic groups, showing them the ReMA videotape, "Scrap: The Supernatural Resource." The company supports Boy Scout troops and encourages groups to tour the scrap yard. "Scouts love this place," he says. "We ask them what they think we do with this stuff. Very few of them understand recycling. Most of them think we process the stuff to make it more convenient to go into a landfill." Most of the kids are more curious to know if the large magnets will lift them off the ground by their hardhats.

Looking Into the Future

Swenson has a vision for the future of Swenson Metal, and it includes postconsumer recyclables such as glass and plastic. These materials will soon be added to the list of items handled, making the company the first in its county to handle materials other than paper and metal.

Recycling metals will no longer be enough, he claims, if scrap processors wish to remain the major recyclers in their cities and communities. "For us to survive in this business we need to do what's asked of us, he says. "We've got to be self-mandated to handle plastics and glass, even if it's at a break-even point, just so our company names continue to be associated with recycling in our areas."

For many scrap plants, this will mean a literal cleaning up of their act. "Scrap plants are generally perceived by the public as scary, dirty, dingy places that people would rather not be associated with," Swenson explains. "What we need to do is present nice-looking, clean, sanitary recycling facilities." If scrap processors fail to step into this recycling niche, municipalities and other private companies surely will, he predicts.

"Most scrap locations are not the sort of place one's wife wants to drop off her cans on the way to the beauty parlor," Swenson says. "We need to make it just as inviting to drop off recyclables as it is to go grocery shopping or take the kids to school."

Swenson welcomes these new challenges to the scrap industry, viewing them as opportunities for personal and corporate growth. With the availability of some materials diminishing and public perception of the scrap industry widening, Swenson believes that scrap processors are in the driver's seat to enjoy the prosperity of the environmentally focused 1990s. "I don't think there's a better business to be in," he says. "Even with the environmental concerns, there are always going to be people in this business. And our intention is to be one of them."

Looking back on his college days, Swenson has to laugh about how life turned out. "A month before I bought the business I would have never dreamed in my wildest dreams that this would be the business I would spend the rest of my life in," he says. But he has no regrets.

Kenneth Swenson knew nothing about the scrap business when he launched Swenson Metal Salvage 17 years ago. His “small town scrap plant” has thrived, though, thanks to his savvy business sense and keen understanding of the new challenges facing the scrap industry.

His father came to him and said, "I know of a little scrap plant for sale. It might be a good business opportunity. I need a scrap supply for a little foundry I'm starting, and I think the businesses might work well with each other."

Swenson knew nothing about the scrap processing business but, as he says, "I was hungry to get into the business world, and this was an available opportunity."

The scrap plant, located near Swenson's hometown of Springville, Utah, had been closed for three years, and its owner, Frank O'Brien, was getting on in years and wanted to sell. His asking price of $185,000 was far too much for a poor college student. But O'Brien liked Kenneth Swenson, so he signed over a crane for Swenson to leverage at the bank for $50,000 of working capital. O'Brien received a $35,000 downpayment, and Swenson Metal Salvage Inc. was launched with the remaining $15,000. "It was one of those seize-the-moment opportunities," Swenson says, "so I jumped in and bought it."

O'Brien tutored the fledgling Swenson for two months about the different grades of scrap, helping him adjust to the new business. Swenson's first big decision was to change the company's focus. The company used to demolish old sugar plants and process the scrap steel, but Swenson decided to develop it as an industrial plant pickup service. "Every potential customer was already someone else's customer, so that made it pretty hard," he says. "We had to beat the brush to form a customer base."

Despite the initial hardships--and Swenson's own second thoughts--his timing couldn't have been better, for 1974 and 1975 were some of the best years for the scrap business. "We got into the business at an unusually opportune time," he says. "We were able to take advantage of the very good market conditions for our first couple of years of business."

Swenson's father closed his gray-iron foundry in 1978 and has since been working as a scrap buyer for his son's operation, now in its 17th year. Looking back, Swenson says, "It was a once-in-a-lifetime deal. It was a good opportunity for me. It got me into the business."

Enjoying a Small-Town Focus

Swenson Metal Salvage is the only scrap processor in Spanish Fork, Utah (population 12,000), which is located 50 miles south of Salt Lake City. Swenson, who has lived and worked in Utah all his life, humbly refers to his company of 20 employees as a "small town scrap plant," but he appreciates being small.

"We're a small enough operation that I spend my days doing a little of everything," he says. In the morning he outlines the day's activities and goals. Midmorning he reviews faxes, studies the markets, and reads publications. In the afternoon he calls customers or visits their plants. He also assists with the company's accounting and sometimes operates the scales and pays customers. "Nothing is ever the same," he says. "Every day is a new battle."

Swenson also enjoys being close to his main consumers-Geneva Steel (15 miles away), Pacific States Cast Iron and Pipe (7 miles away), and Nucor Steel (110 miles away). However, he points out, "in a town of 12,000 there's not a lot of scrap generated. We have to go outside of our town to find enough scrap to process." Even so, he rarely has to search outside the South Utah County area for material.

The ever-changing nature of the scrap business fascinates Swenson, and he delights in the social, familial nature of the work. "It's a very people-oriented business," he says, "and I like to meet and talk with people while doing business. It's also a very deal-oriented business. Nothing is cut-and-dried. There are variables in every situation, and it's fun to work within the parameters of those variables."

Though small, Swenson Metal has grown substantially since its salad days of 1973. Under O'Brien's direction, the plant used to process and ship 300 tons in a good month. Now the company ships that quantity in three days. "We have a company saying--'A hundred tons or bust,'" Swenson explains. "Our goal is to process and ship 100 tons a day." The company mainly processes No. 1 and No. 2 steel scrap, as well as approximately 50,000 pounds of aluminum beverage cans per week.

The company has also grown in terms of equipment. All the original equipment is long gone. The single crane used in 1973 has been replaced by five hydraulic cranes. "Good equipment makes more money than it costs," Swenson says. "We've tried it the other way. Buying new equipment is certainly worth the expense."

Swenson has managed to keep his company growing by following two edicts: Never run out of cash and never pass up a good deal. "We always stay in a strong cash position," he elaborates. "We have found we do much better not borrowing and paying interest on loans. This way we can take advantage of deals or other opportunities that come up."

Promoting ReMA and Recycling

Swenson reels back to recall that his company became a member of the association in 1975, and since then he and his wife have been active participants in the Rocky Mountain Chapter. "I try to stay well-informed," he says. "We never miss our chapter meetings."

Swenson extends his involvement into the community, promoting recycling in general and the scrap industry in particular. In addition to being a member of the city council for his hometown of Salem City, Utah, he sits on the city's chamber of commerce and is vice president of the South Utah County Solid Waste District, which monitors the area's solid waste programs. He sees himself as "a novice liaison between the industry and the general public, " and he has found that serving on these municipal groups has helped him understand the local government's perceptions and positions toward recycling and the scrap business. "Being a part of these committees puts me in a position to speak up for recycling and at least make people more aware and more informed when questions arise," he says.

He remembers one recent chamber of commerce meeting in which a woman stood up and said, "I've been reading about recycling in the newspaper, and we have absolutely no one here in town that recycles. I think we should do something about that."

Swenson laughs and says, "That was a good opportunity for me to explain what Swenson Metal has been doing for 17 years, what the company before us had been doing for 30 years, and what our industry has been doing for 100 years."

In municipal meetings, Swenson has found that curbside recycling has become a buzzword, but people don't truly understand the recycling process. "There are people out there who think that recycling is new and that prior to this year, or prior to Earth Day, nothing was being recycled, that everything was going to landfills. It's important for ReMA members like myself to be in public forums to tell people our story and let them know that recycling is not new."

As a roving community educator, Swenson talks with civic groups, showing them the ReMA videotape, "Scrap: The Supernatural Resource." The company supports Boy Scout troops and encourages groups to tour the scrap yard. "Scouts love this place," he says. "We ask them what they think we do with this stuff. Very few of them understand recycling. Most of them think we process the stuff to make it more convenient to go into a landfill." Most of the kids are more curious to know if the large magnets will lift them off the ground by their hardhats.

Looking Into the Future

Swenson has a vision for the future of Swenson Metal, and it includes postconsumer recyclables such as glass and plastic. These materials will soon be added to the list of items handled, making the company the first in its county to handle materials other than paper and metal.

Recycling metals will no longer be enough, he claims, if scrap processors wish to remain the major recyclers in their cities and communities. "For us to survive in this business we need to do what's asked of us, he says. "We've got to be self-mandated to handle plastics and glass, even if it's at a break-even point, just so our company names continue to be associated with recycling in our areas."

For many scrap plants, this will mean a literal cleaning up of their act. "Scrap plants are generally perceived by the public as scary, dirty, dingy places that people would rather not be associated with," Swenson explains. "What we need to do is present nice-looking, clean, sanitary recycling facilities." If scrap processors fail to step into this recycling niche, municipalities and other private companies surely will, he predicts.

"Most scrap locations are not the sort of place one's wife wants to drop off her cans on the way to the beauty parlor," Swenson says. "We need to make it just as inviting to drop off recyclables as it is to go grocery shopping or take the kids to school."

Swenson welcomes these new challenges to the scrap industry, viewing them as opportunities for personal and corporate growth. With the availability of some materials diminishing and public perception of the scrap industry widening, Swenson believes that scrap processors are in the driver's seat to enjoy the prosperity of the environmentally focused 1990s. "I don't think there's a better business to be in," he says. "Even with the environmental concerns, there are always going to be people in this business. And our intention is to be one of them."

Looking back on his college days, Swenson has to laugh about how life turned out. "A month before I bought the business I would have never dreamed in my wildest dreams that this would be the business I would spend the rest of my life in," he says. But he has no regrets.