Ready for the Next Century

November/December 2014

Over four generations and 100 years, the Indianapolis-based J. Solotken & Co. has persevered, company leaders say, by adapting to changing markets and building on its reputation for service.

By Diana Mota

The 42 employees of J. Solotken & Co. (Indianapolis) grade, sort, and process about 23,400 mt of metal a year, resulting in 4,000 different grades of finished goods. Over the past 100 years, as dozens of other Midwestern scrap companies have merged, been acquired, or left the business, Solotken has thrived, as evidenced by its $4.5 million investment in a new scrap processing facility it moved into in March 2010. The company has kept itself relevant and successful across a century—and four generations of family leadership—by adapting to new market opportunities while building on the founder’s values of faith, family, and service, say Joseph Alpert, president, and Brian Nachlis, vice president, the third- and fourth-generation owners. 

Starting from Scratch

The company got its start in 1914, when Jacob Solotken left Russia at age 15 and followed his older brother to Indianapolis. With only a fourth-grade education, Jacob supported himself by peddling recovered paper, cartons, and rags. “He didn’t have the money to purchase metal,” his grandson, Joseph Alpert, points out. Using a horse and wagon, Jacob would travel the countryside, collecting material from farmers and other small businesses. Whatever he collected he would sell that same day so he would have money to do business the next day. He’d work from 4 a.m. to 8 p.m. every day and study English at night. In 1920, he purchased a small garage he could use as storage and processing space. “It was all my grandfather could afford,” Joseph says.

After Jacob married in 1922, his wife, Sara, helped in the business, which continued to grow, hitting three major milestones in the late 1930s. In 1936, J. Solotken & Co. moved to a “new” building—constructed in 1888—that eventually grew to encompass nearly 200,000 square feet of processing and storage space. The following year, Sara’s brother-in-law, Leo Selig, joined the company. In 1938, Jacob and Sara’s son-in-law, Harry Alpert, joined the firm as well.

Harry thought his involvement in the family business would be a temporary measure, explains his son, Joseph. Then age 25, Harry had an undergraduate degree in accounting from Butler University (Indianapolis) and a graduate law degree from Indiana University (Bloomington). He intended to work at J. Solotken & Co. only until he could build up his own tax law practice, Joseph says, but in the middle of the Great Depression, it was a struggle. “He had clients, but none of them could pay.” He ended up staying with the firm for 57 years, gradually becoming a prominent figure in its growth and success. “When my father joined the company, everything went to a higher level,” Joseph says.

By the time Harry and Leo joined the company, Jacob Solotken had become a savvy businessman. He would spend an hour on the phone once a week, and “he’d buy enough material to keep the company busy for the next two weeks,” says Joseph, who began learning the scrap business as a child at Jacob’s side. “I idolized my grandfather,” he says. Jacob, Leo, and Harry together led the company for more than 20 years, until Jacob’s death in 1959.

Despite Joseph’s fondness for his grandfather, his joining the family business was not a certainty. As a teenager, he briefly considered becoming a rabbi, he says. “Once I decided not to pursue the rabbinate, it was a no-brainer,” he says, to work for J. Solotken & Co.—he never considered doing anything else. But there was still one obstacle: “My dad didn’t want me to start in the family business,” he says. “He told me to go get a job. He said, ‘Before you’re a boss, you’re going to not be a boss.’”

After Joseph earned an undergraduate degree in history from Indiana University and an MBA from the Wharton School of the University of Pennsylvania (Philadelphia), he joined Philipp Bros., an international trading firm in New York, working there in the scrap traffic department and trading fishmeal from 1963 to 1966. “Scrap was about 5 percent of their business, but they were double the size of any other exporter or importer,” he says. He then worked for Manufacturers Hanover Trust Co., a major New York bank, handling short-term investments for corporate accounts before returning to Indianapolis to join J. Solotken & Co. in 1969.

Joseph worked with his father, Harry, for 26 years. He now calls Harry the “Bobby Knight of scrap”—a reference to the famed Indiana University basketball coach’s winning ways, but also his combative personality. Harry “was a tyrant and a perfectionist,” Joseph says. “I was fired every evening and rehired every morning.” But their relationship improved over time, he adds. “Although Dad and I had a tumultuous start, we grew close. When I was 40, he was an idiot; when I was 60, he was a genius.” Harry retired in 1995 and died at age 91 in 2004.

Joseph also worked closely with Leo Selig, whom he calls his uncle. Harry and Leo were from separate generations but only about five years apart in age, he explains, making them seem more like brothers. Leo was perhaps the most heavily involved of all the Solotken leaders in the scrap industry trade associations. In 1960-61, he served as the final president of the National Association of Waste Material Dealers (New York) and the first president of that association under its new name, the National Association of Secondary Material Industries. He also was on the boards of the Indiana Chapter of the Institute of Scrap Iron and Steel and the Mid-West Scrap Dealers Association. (NASMI and ISIS were two predecessors of ISRI.) The company’s leaders have a long history and tradition of serving the local ReMA chapter in Indiana, Joseph and Brian say. Joseph formerly served on the board of the National Association of Recycling Industries (the name NASMI adopted in 1974). Leo retired in 1989, after 52 years with the company.

Just as Jacob Solotken worked with his son-in-law, Harry Alpert, Joseph now works with his own son-in-law, Brian Nachlis. When he became part of the family, Brian had been working as a hospital administrator, but he began to find that work unfulfilling, he says. Joseph suggested he give the scrap industry a try, so he took a week’s vacation in 1998 and spent it at the scrapyard. “My first reaction was that it was a faster pace, more dynamic, and different every day,” he says. “I also felt I could make a difference at the company.” He joined J. Solotken & Co. soon after, becoming the catalyst for another period of dramatic change.

“In the past 16 years, we’ve advanced into the modern age of scrap,” Joseph says. When Brian started, the company had one computer for e-mail, a bookkeeper who kept ledger books by hand, and a handwritten inventory system that spanned three notebooks. “It would take two weeks to do end-of-month financial statements,” Brian says. Today every desk has a computer, and the company’s computerized bookkeeping and inventory system uses bar codes for inventory tracking. Brian also played an instrumental role in the company’s relocation in 2010. “We wouldn’t be in this building if it weren’t for him,” Joseph says. The two have a clear division of labor: Joseph markets scrap, and “I manage the company,” Brian says. “I oversee everything—from buying scrap to maintaining relationships with industrial accounts to managing personnel.”

The Constant is Change

Though the company’s core values have remained the same, J. Solotken & Co. today bears almost no resemblance to the J. Solotken & Co. of 100 years ago, Joseph and Brian say—and that’s one reason the company has survived. Knowing when to shift direction is a key component of longevity, they say. Success is “about taking advantage of opportunities when they’re presented to you,” Brian says. “Sometimes the business goes where customers need us to go. … Customers ask, ‘Do you handle X?’ I say, ‘We might not do that, but we can.’ And now we do.”

Take the commodities the company processes, for example. Jacob Solotken primarily handled textiles and fiber. When the Wool Products Labeling Act of 1939 took effect, which mandated labeling garments with their textile content and source, “that totally changed my grandfather’s business because American housewives wouldn’t buy a garment with used wool,” Joseph says. The domestic market for used textiles disappeared, he says, and in Indianapolis, without a seaport nearby, “we couldn’t compete” in the export market. By 1959, the company had stopped buying rags altogether.

Harry Alpert devoted most of his career to recovered paper, which the firm solicited from printing companies, newspapers, and public school drives. “We began grading and processing paper in the late 1950s,” Joseph says, using the same space and equipment the company had previously used to grade and process rags. “We made 150 different grades.” Leo Selig, meanwhile, handled the scrap metal. In 1975, Harry sold the scrap paper business to Clevepak Corp., now a part of Rock-Tenn Co. (Norcross, Ga.), and the company began to focus solely on nonferrous metal. Joseph says he did not have an affinity for the paper business, and the metal business was continuing to grow.

Harry “never really got into metal,” Joseph says, and he became more of an administrator for the remainder of his time with the company. Joseph, however, was drawn to metal, which is all that Solotken deals in today. For the past 10 years, it has produced aluminum and copper briquettes as well as bales and bundles of other nonferrous materials. The firm also has grown into purchasing steel from industrial sources. Of the 23,400 mt of material the company handles a year, a little more than half of it is steel, followed by aluminum, stainless, copper, brass, high-temperature alloys, and more.

Over the years, Solotken also has expanded its purchasing base. From the 1940s to 1980, the company was a wholesaler, buying material from smaller dealers throughout Indiana, Brian says. “It was Joe’s idea or foresight, [when] he saw smaller dealers being bought up or getting larger,” that to advance the company “we needed to look into industrial accounts.” The firm purchased its first roll-off container in 1978 and now has hundreds of them. “It was a shift in how we did business,” Brian says. “We didn’t solely rely on dealers. We were expanding [by] serving accounts and building relationships.”

Reinventing the Physical Plant

The company’s biggest change, Joseph and Brian say, was its March 2010 move from the building it had occupied for the previous 74 years, near downtown Indianapolis, to its current location a few miles east of the city. The old building consisted of a maze of work areas spread out over the three floors and a dirt basement. “It was the scariest place in the world,” says Ron Ball, the shipping supervisor, who has worked at Solotken for 30 years.

The setup made processing a challenge, Brian says. The old building had two Economy Baler Co. upstroke pit balers the company had installed in 1948. To make a bale, workers would ride up and down in an old freight elevator—which broke down frequently—to gather material, throw it in the pit, push a button to compact the material, and tie it by hand. “It took five times as long to make a bale of aluminum siding” as it does now, Brian says. And because the equipment was so old, whenever it broke down, they would have to search for parts.

Over a 15-month period, Solotken acquired and renovated the former metal-fabricating facility of the Frank E. Irish Co. “We took out the heating system and replaced it with radiant heaters over work areas,” Brian says. Given the building’s 40-foot ceilings, “it didn’t make sense to heat the whole place,” he explains. The company also replaced the existing light fixtures with energy-efficient models and installed new fire suppression and security systems. Physical changes to the space included adding three receiving docks and an additional overhead door. The facility has drive-through access for easier loading and unloading in all types of weather, two indoor scales for weighing containers, and an outdoor truck scale. A half-dozen employees weigh, inspect, and sort material as it arrives. If it doesn’t need processing, it goes directly into inventory, Brian says. Some materials, such as steel, “are weighed and then go right back out.”

The new facility “completely changed how we operate,” Brian says. At 150,000 square feet, including 10,000 square feet of office space, it’s about half the size of the previous building, but it’s more efficient, he and Joseph say. “It’s not the size; it’s the configuration,” Brian points out. “We now have defined areas of processing.” The processing equipment includes three D&J AR-15 briquetters, four shaker tables, and a conveyor-fed, automatic Nexgen Galaxy two-ram baler. Instead of packing and hand-tying 500-pound bales, the employees now are creating 50-pound briquettes and 2,000- to 5,000-pound, machine-tied bales, Brian says. In the far corner of the facility sits Solotken’s newest acquisition, a bright green Guidetti wire chopping system, consisting of a PMG 900 preshredder and a WIRE 2000 Professional Series module, which strips, granulates, and sorts copper wire.

The firm’s assortment of equipment has certainly grown since the early years, Joseph says. When Solotken purchased its first lift truck, in 1956, “it was a major investment,” he recalls. “We kept rebuilding it. Now we have six of them.” Driving the equipment purchases, Brian says, is the realization that “we were paying people to process scrap for us, so why not do it ourselves? If you don’t find a way to serve your customers, someone else might. … We carefully consider the capital expenditures we make,” he adds. “We’ve calculated investments and made decisions about where to take the company.”

The new configuration and newer equipment allow the company to process about 60 percent more scrap, he says. “That means we can be competitive in what we pay for scrap.” Brian recalls wondering whether they’d be able to fill the plant with scrap or whether they should rent out a portion of the building. Now, he says, he finds himself wondering whether it’s time to blow out the back wall and expand.

The company also has upgraded its transportation fleet. “We had trucks in the shop more often than they were on the road,” Joseph says. Now it has three roll-off trucks, two tractor-trailers, and a 24-foot box truck that cover a 200-mile radius for pickup services and up to 250 miles for deliveries. “Most deliveries go out in common carriers,” however, Brian says.

Finding their Niche

The duo considers purchasing, grading, and processing industrial and wholesale scrap metals at competitive prices the firm’s forte. “We have a passion and enthusiasm for what we do,” Joseph says. The company looks for areas where service is lacking, such as with high-temperature alloys and tool steel. “It takes a lot of time to sort. You have to test each individual drill bit. But no one else is doing that,” Brian notes.

The process starts with the scrap supplier. “Without the inflow of scrap, there would be no business,” Brian says. “You can’t tell your supplier that you won’t take something, or they will go somewhere else. You have to be a market for them. We have some grades that don’t move; we have some grades that move every week.” The firm provides scrap pickup and delivery services, providing its customers with roll-off containers, Gaylord boxes, or custom-made containers. It also offers consulting and brokering services for all grades of scrap metal and specialty items, and it will work with suppliers to streamline scrap collection and segregation. “Our profit depends on our buying prudently,” Joseph says. “We can set prices at which we buy, but we don’t really have great control over prices at which we sell.”

About 95 percent of the business, by value, is domestic—primarily in the Midwest, including Ohio, Illinois, and Kentucky. But markets in other countries, such as China, India, and Pakistan, have buyers for material that has little domestic demand and otherwise might go to a landfill. “I want to find markets for unusual items,” Brian says. “I find it a challenge. We will buy unusual forms of nonferrous scrap that, because of our years of experience, we have markets [for] that I think many people don’t have.”

J. Solotken & Co.’s years of experience also have given it a reputation the company works to maintain. In this business, reputation is important, Joseph says. “It precedes you wherever you go.” His goal, he says, is “to find a buyer and deliver what they want, how they want it, when they want it, and at a fair price—and then have them come back and ask for more of the same.” Without repeat customers, “you really haven’t done anything worthwhile.”

Brian agrees that maintaining customer relationships is key. “We’ll hold inventory for customers so we’ll have it when they need it, regardless of what the market is doing,” he says. “While we might not want to sell in that market, we will sell if that consumer needs it.”

“Many of our suppliers have been with us for decades,” Joseph says. “We like to do business with people we trust.” Several are family-owned and -operated businesses themselves, Brian adds. “They understand how difficult it is to run a family business.”

“We’re going to continue to build the relationships we have and solicit new industrial sources of scrap when those opportunities exist,” Brian says. “We’ll find out what our consumers need, and we’ll go out and get it or make it.”

A Multifaceted Work Force

J. Solotken & Co. has three full-time drivers, about 10 office staff members and supervisors, and 30 metal sorters and processors. The company experiences little turnover, Brian says, which is a boon for operations. “We don’t have to spend time training new employees or micromanaging. Our employees have allowed us to continue doing business for 100 years.”

What the company does not have is a dedicated sales force, he points out. Instead, he cross-trains office staff to perform a variety of functions. For example, Brandy Wilson, the logistics coordinator, also spends time selling aluminum and stainless. Derek Crutchfield, who has been with the company for 10 years, is plant operations manager, but he also buys scrap and fills in as a driver, as needed. “I like people to be involved in all facets of the company,” Brian says, and it provides flexibility. “What we do doesn’t lend itself to [our] using temporary workers when someone is out,” he notes. “We’re too complicated. You can’t [overvalue] the importance of having people who can multitask.” Training occurs every day. “It’s not formal, but you have to educate people as much as you can about everything,” he explains, “because you might need them to do something else.”

Brian also says he believes in promoting employees from within. “The people you work with are crucial to the overall success” of the company, he says. “That’s the philosophy you have to have. You have no business without them.” Joseph agrees, and he notes that “our work force is the best it’s ever been.”

At one time, Joseph says, he thought he would end up selling the company his grandfather founded because there was no one from the next generation interested in taking over. But that changed once Brian joined J. Solotken & Co. Joseph’s pride in his son-in-law’s abilities is evident in how he speaks about him. “He’s built loyalty with our employees. He’s built loyalty with our suppliers.” He has come a long way from his days as a hospital administrator, Brian says. “I can walk through the warehouse, look at a piece of scrap, and tell you exactly where it came from. You have to know whom you’re buying from and what they’re selling.” He’s grateful that, over time, Joseph has come to trust his judgment. As Joseph puts it, “I used to say, ‘Brian, why’d you buy that?’ Next thing I know, he’s selling it.”

Business slowed during the recession that began in 2008, Joseph says, but as Brian sees it, the recession “made you look at your business and become more efficient.” The company survived the downturn without having to lay off any employees. “We have a strong balance sheet; we can withstand downturns in the market; and we’re diverse enough not to be tied to any one industry or metal,” he says.

The company’s long-range plans remain unclear. Brian has a 13-year-old daughter, Elise, and two sons, 7-year-old Harris and 3-year-old Jared. While it’s too early to tell whether that generation will take the reins, Brian says he brings the children to the facility regularly to see what he does. “You have to impart in them the excitement of it. If you don’t show excitement or interest in what you do, they have no reason to feel the same. Whenever they’re here, it’s an educational opportunity for me.”

No matter what happens, “we’re stronger than we’ve ever been,” Joseph says. It’s not enough to have existed for a century, he says. “You can have a 100-year-old company and barely be alive.” Brian agrees. “We’re not just existing. You can arguably say we’re the strongest we’ve been in 100 years.”

Over four generations and 100 years, the Indianapolis-based J. Solotken & Co. has persevered, company leaders say, by adapting to changing markets and building on its reputation for service.