Colmar--Clean Image

Features - Scrap Industry News

Texas Metals & Recycling seeks to increase the profile of the recycling industry.

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March 28, 2006

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Wayne Lanham

When Wayne and Terri Lanham purchased Texas Hide and Metal Co., they had no idea what lay ahead of them, namely the difficulties associated with uprooting an established business and moving it to a new facility five miles away. While the process may not have been entirely smooth, the result is something that the Lanhams can be proud of.

Most family-owned scrap yards are long-standing institutions passed down through the generations, but the Lanhams had no prior experience in the scrap metal recycling industry prior to establishing Texas Metals & Recycling Co. Instead, the couple stumbled into the business by virtue of proximity.

PUTTING ONE AND ONE TOGETHERWayne’s father Steve, who worked as a newspaper production manager, saw an opportunity in the scrap paper generated by his employer. Stricken by the entrepreneurial spirit, he called on Wayne, who had been working in ranching after graduating from Texas Tech with a degree in agriculture economics, to join him in the proposed paper recycling venture. The duo established RWL Recycling Inc. in September of 1987, and Steve still serves as operations director for the company.

While working to establish the name and reputation of his company, Wayne also began putting down roots in Abilene, marrying Terri in 1990. Terri, a graduate of Tarleton State University with a degree in computer sciences, immediately joined the family business, serving as the bookkeeper for RWL Recycling. It was not long after they settled in as man and wife that Wayne and Terri partnered on another venture.

In 1991, RWL Recycling’s accountant told the couple about Texas Hide and Metal Co., a scrap yard that was established in 1909. The company’s owner, also a client of the accounting firm, expressed an interest in exiting the business. Although Wayne and Terri had not articulated an interest in expanding their business prior to that time, the accountant approached the couple with the acquisition opportunity. After some deliberation, Wayne and Terri executed an asset purchase of Texas Hide and Metal in the summer of 1991, forming Texas Metals & Recycling Co.

Wayne says he is pleased with their decision to expand into the metals recycling industry because it gives them an opportunity to benefit from the stronger of the two markets. "When certain items in paper are hotter than certain items in metals, we are able to shift our focus to where the hot item is and hopefully capitalize on the markets more by doing that," he says.

While Wayne says that west Texas is not home to many paper recyclers, the competition is stiffer on the metals side of the business. Texas Metals differentiates itself from larger scrap dealers in the area by providing consummate customer service and a top-notch facility. "We have a competitor that is five or six times larger than us up the road," Wayne says. "What is going to make us different is our customer service and our facility."

An Indisputable Ally

Wayne Lanham, owner of Texas Metals & Recycling of Abilene, says that when the rush of 2004 hit the metals industry, his company was grounded until it purchased a stationary Colmar 6200-800 shear/baler.

"It was all we could do to unload people some days," he says of his operation prior to the addition of the Colmar unit.

Wayne says the 6200-800 produces ferrous bales with "great density" that the company sells directly to area steel mills. The unit has also helped the company reduce the amount of time it spends loading vehicles by two-thirds.

For a man who describes himself as "pretty particular" when it comes to equipment, Wayne has been pleased with the performance of his Colmar shear/baler. "I would definitely look at one of their shears again. Originally, people talked about it being a throw-away shear," he says. "At this point, I don’t see that being the case."

Wayne first became acquainted with Colmar’s equipment at the Institute for Scrap Recycling Industries Inc. (ISRI) Annual Convention in 2004. In July of that same year, Frank Baker, Colmar’s sales manager for the South Central region of the United States, phoned Wayne to let him know that he had a shear/baler available from a sale that fell through. "He said he could deliver it to me as soon as we made the deal," Wayne says. "I put down a refundable deposit and they gave me 10 days to do my homework."

After some comparison shopping, Wayne decided to go for it. "I decided it was a good purchase. I saw what it would do for the dollars that it cost vs. competitive machines and decided that it was a good value for what they were selling it for."

In addition to the stationary shear/baler’s performance, Wayne has also been pleased with the service and support Wheatfield, N.Y.-based Colmar USA provides. "It has been impeccable," he says. "I haven’t had any issues."

Wayne continues, "Even after the warranty expired, they have gone above and beyond and taken care of some things that, in my opinion, they didn’t have to."

Both Texas Metals and RWL Recycling are located along a Texas state highway on the same five-acre site. Wayne and Terri bought the site in 1995 and relocated the paper recycling operation there immediately. The metals operation moved there in 2002 and involved considerably more work, Wayne says.

ESTABLISHING A NEW IMAGE

"Relocating the scrap yard has been our biggest challenge," Wayne says. With only 90 days to relocate to the new yard, which was five miles away, the company sold as much material as it could in preparation for the move.

"It was close getting that done," he says of moving the established yard within the time frame provided. "Logistically, it had been a scrap yard since 1942. We tore it down 60 years to the month that it was built."

Wayne and Terri set up their new facility so that the buildings housing RWL Recycling and the nonferrous portion of Texas Metals are located on the perimeter of the site. The ferrous yard is at the back of the location, out of view from the public.

"We did that intentionally," he says of their decision to locate the ferrous operation away from public view. "We wanted to give a different perception of the industry," Wayne says. "Most scrap yards you go by, you see huge piles of material, and it is kind of an intimidating, daunting thing. I don’t want people to see that. I want them to see a nice facility."

And that’s exactly what they see at Texas Metals. Incoming traffic flows in one direction along wide, paved roads to allow easy and orderly movement through the yard. Wayne and his 10 employees also make an effort to keep piles to a minimum, quickly processing incoming scrap metals and sending them off to their consuming destinations. The company sells its ferrous scrap directly to three or four steel mills and its nonferrous material to brokers and large scrap dealers, though most of the red metals it handles stays within Texas, Wayne says.

Having the right processing equipment plays a vital role in Texas Metals’ success. "Every month we try to sell what we buy, in general. That way you don’t get caught with these wild swings."

Texas Metals processes 800 to 1,000 tons of material monthly primarily using its Colmar 6200-800 shear/baler and keeps material moving with two scrap handlers.

When the Lanhams bought the Texas Hide and Metal Co. in 1991, the newest piece of equipment was a ’74 pickup and the newest crane dated back to 1969, Wayne says. "We were 25 years behind in terms of equipment." They have slowly been upgrading and adding equipment throughout the years.

"It’s still a work in progress," Wayne says of Texas Metals. "We add a little at a time and go to the bank for financing. That allows us to keep operating capital around. I’d rather borrow money on equipment than on operating expenses."

GROWING A LEGACY

The Lanhams are focused on creating a clean image for Texas Metals & Recycling and on establishing a business their two children, 11-year-old Megan and 7-year-old Justin, will be happy to own one day.

"We are somewhat unique in the industry in that you don’t find too many first-generation scrap yards," Wayne says. "We didn’t get any of the goodies that passing it from one generation to the next allows." They didn’t inherit the potential liabilities, either. "We have got a fresh facility and practice all the safe operating and environmental guidelines," he adds.

Wayne credits Texas Metals’ success to his ability to stay abreast of the market and his company’s inventory. "Knowing what you have and what it is worth at any point is very important," he says. To accomplish that, the company uses a software program to track its inventory.

Texas Metals also sells new steel and so has the benefit of seeing both sides of the ferrous market. "The demand for the finished product is strong," he says. "Fab shops are booked through the year. I’m cautiously optimistic that the ferrous side will stay strong in the first half of the year based on new steel sales."

As for his secondary mission of raising the reputation of the scrap recycling industry in the eyes of the public and the profile of Texas Metals in particular, Wayne says, "It’s time people know that we are a vibrant and colorful industry."