The Snyder Group: Recycling for the Future … And the Past

Ensuring its future viability and preserving tradition are complementary priorities at this Pittsburgh-area scrap processing company. 

Elise R. Browne is editor of Scrap Processing and Recycling.

True to its motto, the Snyder Group is "Recycling for the Future." But while the firm--comprised of Assad Iron & Metals Inc. (Brownsville, Pa.), Heidelberg Metals Inc. (Heidelberg, Pa.), and Barney Snyder of Ohio Inc. (Dillonvale, Ohio)--keeps a close eye on tomorrow, it hasn't lost sight of its roots.

Balancing the future with the past seems to stem from the outlook of its owners, the Snyder family. Company Chairman Barney Snyder, who began his career in the scrap business in 1940, peddling ferrous and nonferrous metals from a pickup truck, has always been known as a risk taker, acquiring (and sometimes selling off) scrap plants, a machine shop, an auto parts store, and other businesses throughout the years. Yet you need spend just five minutes with him to realize how much importance he puts on tradition, particularly the family tradition.

His sons (four of the five are part of the company) have much the same attitude. James, the oldest son and Snyder Group president, recalls the guiding principles his father taught him about business: "work real hard every single day of your life," “work together as a family," and “remember that anything is possible." He and his brothers appear to live by those lessons.

Another of Barney's scrap business fundamentals, however, has been modified in recent years. "Dad brought us up with the saying 'You can't do business from an empty wagon,"' James says, so the company always stocked up on inventory, buying scrap in down markets and holding it until prices moved up. "In the past, that worked for us," says the past president of the Institute of Scrap Recycling Industries's (ISRI) Pittsburgh Chapter, "but we've changed our philosophy in the last five years. We've changed from being market players to being manufacturing facilities--things that come in go right back out."

He identifies a few basic reasons for this shift: Market changes are much more gradual than they used to be, the competition for scrap is keener than ever, the costs of doing business are so much greater, and increasing the size of its operations (the company now ships more in a day than it shipped in a month only 15 years ago) necessitated updated strategies.

Breaking from this tradition has left the Snyders feeling "very naked," James says. "But we've learned that the world doesn't end because of having less inventory ... that you only need a little inventory to do a lot of business." One of the ways the Snyder Group has done a lot of business while keeping its inventories low has been to form "partnership arrangements" with a number of its consumers, whereby both sides agree to sell or buy a certain amount of scrap for a set price every month.

The company also tries to upgrade--or, as one of the vice presidents, Ken Puckett, calls it, "put to its correct use"--every piece of scrap it buys, going as far as to examine certain scrap generators' purchase orders for metal in an effort to identify the ideal scrap consumers. This translates not only to premium selling prices, but also to a larger potential consumer base, including mills and foundries that might otherwise be inclined to use virgin materials to obtain the elements needed to make specialty grades. It also means that the two people who purchase scrap for all three facilities-Dan Snyder and Ken-can sometimes offer suppliers a better price than other processors for materials that can be upgraded.

The partnership arrangements and the decision to upgrade whatever it can are both Possible at least in part, Ken says, because management understands how important quality is and is dedicated to doing things consistently and right."

This is apparent in a number of progressive Snyder Group policies. For one thing, half of its Brownsville plant's 10-plus acres are paved (the other half is expected to be hard surfaced by the end of this year), as is a third of the 7-acre Heidelberg facility and a quarter of the Dillonvale plant (which sits on 6 acres), so scrap is kept as clean as possible. In addition, the company has a mobile spectrometer in Brownsville that allows it to analyze the exact makeup of its scrap and submit the equipment's readouts to consumers.

Both the paving and the spectrometer purchase represent significant expenses for a firm that doesn't specialize in stainless or special metals, but ones that James says the company invested in for the long term. "We are not shortsighted," he says. "We want to be here tomorrow, next month, next year, and 20 years from now." Furthermore, he believes, "These things are just like a crane: They cost a lot of money, but they pay you back day in and day out.”

Its dedication to quality control is also evident in the company's policy of sending its employees-from crane operators to office managers-to visit some of the mills and foundries that consume its scrap and hear those consumers' views of quality. Another example is a system in use at one mill whereby every shipment is evaluated and a rating card is returned describing any problems with the material. "When we get them, we take those cards very seriously," James notes. "We show them to the foreman, to the crane operators, to the fellows working in the yard. ... They know we don't like to get them."

Management doesn't just show workers what they've done wrong, however. Educating them (and, in turn, asking them to teach suppliers) about why some things can pose difficulties and giving them the right to turn away problem scrap are also important parts of the equation.

This reliance on and authority given to its employees (there are approximately 80 throughout the organization) is possible, says Chuck Snyder, a vice president, because the company "lets everyone know where they stand. " As the manager of the Heidelberg plant, Chuck keeps his facility's workers informed of short-term and long-term goals, legal concerns, and more by spending every Monday morning before the workday starts in the locker room. "I try to make it a family atmosphere, " he says, "and let them know we're all in this together.

"Our people have always been very, very important to what we do, because they're on the front line every day," James adds. "They depend on us to bring them work and we depend on them to get that work back out." To help show them how vital they are, the Snyder Group shares its profits with its employees.

Apparently, employees do feel appreciated: At the Brownsville plant, for example, which the company purchased 18 years ago, the average employee has worked there for 12 years, according to James.

Keeping up with the times and allowing employees to take responsibility seem to be part of the Snyder family tradition. Barney's sons and other members of the management team continually refer to the fact that he has never stood in any of their ways in establishing new ways of doing business. "We've prospered because of Barney," Chuck says. "He lets us just take the ball and run with it."

Now that James has taken over primary responsibility for the company, they have much the same to say about him. Keith Miller, operations manager for Brownsville, believes that part of what sets the Snyder Group apart from other scrap processors and helps the company to grow is "the willingness of James to allow us to do some of the things we do in the plants." Adds Ken, who serves as treasurer of ReMA's Pittsburgh Chapter: "A trait that Barney passed on to James very well is the willingness to put his money where his mouth is--to not only come up with good ideas, but say 'Let's do it.'"

Because the firm is "involved in so many projects not everyone is aware of," according to James, the company's management team (which numbers 11) meets over dinner once a month to discuss exactly what the company has been and will be doing. It doesn't replace the daily contact they have with each other; it simply provides a relaxed forum for talking over a variety of issues.

A two-and-a-half-year-old networked computer system also helps keep employees informed of transactions at all three facilities. In fact, says James, "The computer more than anything else has given us the information we need in order to grow."

His strong convictions about the system's importance are evident in a number of company decisions. Perhaps the most striking example is that the firm hired a full-time employee--John Rice, who now serves as the Brownsville facility's office manager--to purchase the equipment, write all of its programs, and update those programs as necessary.

Being a family business means a lot to the Snyders: "Dad didn't encourage us to join the business, " James says. "There was never a question of what we would do." That doesn't negate the importance of the company's nonfamily managers, however. "Being family oriented sometimes limits you," James asserts, since relatives "can't always do the things that need to be done and represent you in the way you want to be represented. ... In order for us to be here in the next century, we can't rely solely on family to guide us." Besides Ken, Keith, and John, those nonfamily managers include Phil Sebulsky, the vice president responsible for the Dillonvale plant, and Bill Bommer, who ran a government-operated municipal recycling center in Ohio for five years before joining the Snyder Group in January.

All of Bill's responsibilities have yet to be formulated, but his experience with plastics, glass, and paper likely will be put to use in the company's growing nonmetallic business. The firm has always handled ferrous and nonferrous scrap (the latter now accounts for 30 to 35 percent, by value, of the business) but began adding nonmetallics to its list of materials handled two years ago, currently shipping approximately 2,000 tons per year of glass bottles and smaller quantities of corrugated containers, polyethylene terephthalate soda bottles, and high-density polyethylene jugs.

The company obtains most of these items, as well as steel and aluminum cans, from municipal collection programs in the area. Pennsylvania law now requires source separation of recyclables in communities of 10,000 or more and in September will expand that mandate to include all communities of 5,000 or more. In 1989, a year before the law took effect, the Snyder Group arranged a recycling program for Bethel Park, Pa., a community (like the company's scrap plants) near Pittsburgh. Because James also owns a waste hauling enterprise, he was not only able to arrange everything from collection to marketing, but also was able to use his four years of experience with waste to round out his lifelong knowledge of scrap.

Even with that background, however, working with some of the items generated by municipal programs has been an education for the Snyder Group. For example, Ken, who worked in the scrap business for 13 years prior to joining the company 7 years ago (he was an FBI agent and a director of purchasing before starting his scrap career), had a good familiarity with the quality requirements of metal scrap, but found that glass manufacturers (there are several in the Pittsburgh area) are often “more demanding” than metal scrap consumers and require a greater degree of cleanliness.

The company is learning similar lessons about other nonmetallics. Despite any annoyances the company is having with scrap from municipal programs, according to Ken, "municipal recycling is here to stay and we plan to be a part of it.”

Approaching operating changes as learning experiences seems to be the preferred way of doing business at the Snyder Group, with the Brownsville plant used as the company's "testing ground." Although that facility remains the only one working with municipalities (it now serves six municipalities and 25,000 households) and nonmetallic scrap, other ideas introduced in Brownsville have been or soon will be instituted at one or both of the other plants.

Hard surfacing the plants, for instance, which James says not only reduces contamination of scrap, but also minimizes flat tires on equipment used in the plant and provides more comfort for hand sorters who might otherwise be standing in the mud, was begun in Brownsville. Use of street sweepers also started there and has since been initiated at the other two facilities.

Heidelberg soon will also have a nonferrous processing/warehouse building much like the one built in Brownsville in 1977. And the Snyder Group-designed aluminum sweat furnace and aluminum can sorter/baler now used in Brownsville may not be far from installation at the other plants.

Some things are still done the old-fashioned way at the Snyder Group. Most notably, perhaps, is its practice of "drop balling": 5-ton iron balls are dropped from the magnet of a locomotive crane at Heidelberg onto large pieces of blast furnace iron, breaking them up into consumable sizes.

The company's theory on buying scrap is also based on an old-fashioned principle: Put service first. "Anyone can buy scrap," Dan says. "While Price is all-important, we emphasize service." It's a way of doing business, Ken says, that "differentiates us from other businesses." And in an area like Pittsburgh, where the competition for scrap is always close by, anything that sets one processor apart from the rest could make a difference.

The Snyder Group's ability to provide special, service relies in large part on having its own fleet of 21 trucks. When a customer calls to ask the company to move its containers over a weekend because the customer is having its lot paved or having a new piece of equipment installed, for instance, the firm can send one of its own vehicles.

Although each facility in the Snyder Group maintains its own trucks and equipment, the plants are all part of one company that, if you drew a line connecting its locations, would form a triangle with approximately 50-mile sides.

It wouldn't be surprising if that line formed a square or pentagon someday. "We are always out there looking for acquisitions," James says. "If another scrap plant that fits our concepts comes on the market, we'll be right there to buy." A main criterion in fitting its concepts is a nearby location. Because the company relies on "hands-on managements," he says, it wouldn't make sense to buy a plant outside the general vicinity, although, he jokes, "There are certain times of the year when Southern California and Florida sound appealing."

The Snyder Group was built on acquisitions. Fifteen years after he started peddling scrap, Barney fell off of his truck and broke his leg. The leg never set right, so a year later, in 1956, in an effort to keep off of his leg, he bought an existing scrap plant in Burgettstown, Pa.

In 1973, Barney purchased the Brownsville facility, almost by accident. "We went there to buy a trailer and ended up buying the whole yard-all within four hours," he says. Barney and his sons thought they'd sell the facility soon after the purchase, as they had with other plants acquired through the years, but scrap kept coming into the plant and the Snyders never closed it down. The Dillonvale facility was acquired in 1979 and the Heidelberg plant in 1986. Then, in early 1989, the Burgettstown facility was closed and, soon after, the Snyder Group purchased the property ("for posterity, " James says) after years of leasing it.

Through the years, the Snyders have acquired more than scrap operations. In addition to waste hauling companies, the family owns a steel foundry (to which the scrap company is the primary supplier) and has an interest in a seafood restaurant in San Diego.

Growth has caused some pain for the Snyder Group. James, for instance, has to spend most of his time as an administrator these days, leaving him few moments to do what he really loves: working in the plant. Instead, he must be content watching the action from the huge windows overlooking the Brownsville plant from two angles in his office. And Barney laments that "the bigger the operation, the more worries and headaches you get."

For a company that emphasizes future viability like the Snyder Group does, however, these are necessary aggravations. "It's sad giving up the things you like to do the most," James notes. "But I realize that if you're not going forward--if you're not growth oriented--you're moving backward.”•