The American Way

While American Shredding, based in Reno, Nev., was incorporated in 2005, the principals behind the company are long-standing members of the

American Shredding grew out of The Sutta Co., a full-service recycling company based in Oakland, Calif. Steve Sutta founded The Sutta Co. after the paper recycling plant that he co-founded in Emeryville, Calif., in 1975 was sold to Weyerhaeuser. The Sutta Co.’s pedigree in the information destruction industry extends more than two decades to 1982, when the company began destroying confidential information for IBM.

Steve Spence, who serves as the director of operations for American Shredding, joined forces with Sutta in the early 1990s, after logging time in the forestry and paper recycling industries. "My primary role is locating the real estate and setting up the plants," Spence says of his position with American Shredding.

American Shredding’s other principals are Mike McQuillen, Rob Vincent and James Bell. Combined, these men have more than 150 years of experience in the information destruction and recycling industries.

Though paper may be a common denominator, The Sutta Co. and American Shredding do not share physical space. Instead, American Shredding’s three secure information destruction facilities in Reno, Salt Lake City and Las Vegas are located and maintained separately from The Sutta Co.’s seven recycling facilities.

Spence is quick to emphasize that recycling alone does not ensure the secure destruction of documents, adding that there is a distinct difference between baling unshredded material within an unspecified time frame and shredding documents within a day or two of receiving them. That difference comes down to a well-defined chain of custody.

"We are also the only destruction company in this area that offers a complete chain of custody—from the source to the end user of the scrap paper, plastic or metal," Sutta says.

Spence says existing legislation needs to offer stricter language when it comes to chain of custody requirements. "Legislation needs to say that there needs to be a tight chain of custody," he says.

Sutta adds, "There needs to be enforceable legislation that protects data for consumers and businesses. There are a lot of laws in place, but no one seems to take them too seriously. We have spoken with some of the responsible parties in our markets, and no agency is willing to take the lead on this issue."

Sutta says American Shredding double shreds all the material it destroys—both on site and off—to ensure no data can be read. "No company in either Utah or Nevada is offering that type of complete shredding for data or product information," he says.

Spence says each of American Shredding’s plants is equipped with two shredders—a 100-horsepower unit and a 75-horsepower unit from Ameri-Shred, Alpena, Mich.— to cross-directionally shred incoming material. The company has opted for a final particle size that is smaller than the 5/8-inch industry standard as a way to distinguish itself from its competitors, according to Spence and Sutta.

While Spence notes that a smaller particle size comes at a reduction of capacity, he says presenting material correctly to the shredder can reduce this decrease in throughput.

Purchasing shredders of this size also indicates to American Shredding’s clients that the company is serious about what it’s doing, Spence says. "When people do a facility tour, they are astounded at the volume of paper going into our shredders," he says. Sutta adds that the company shreds more than 250 tons of material per month.

American Shredding also differentiates itself from its competitors by its willingness to take on challenging product destruction jobs, according to Sutta. "We pride ourselves in our ability to provide custom solutions to difficult situations," he says. "We have the vision and access to capital to adequately fund and implement unique solutions to destruction and recycling situations. Whether it’s destroying memory chips, poker chips, hard drives or paper, we have the experience and the equipment to get the job done in a cost-efficient, effective manner."

Sutta continues, "We specialize in finding homes for hard-to-recycle materials, such as certain types of plastics and paper. We have found end users that can use shredded self-stick labels, materials contaminated with plastics or plastic containers that were used to store solvents or other chemicals."

The challenges associated with product destruction, which makes up roughly 20 percent of American Shredding’s business, keep things interesting, Spence says.

While American Shredding strives to recycle everything from its product destruction jobs, economics play a factor, he notes, as do the parameters of the job. For instance, when the company was contracted to destroy some knock-off police jackets, the client insisted that the jackets remain in their individual plastic bags during destruction, rendering the resulting material too difficult to recycle, Spence says.

In most cases, however, American Shredding designs its destruction processes to maximize the value of the recycled end products, Sutta says.

In addition to offering destruction services, American Shredding and its parent company The Sutta Co. also provide paper brokerage services, handling more than 40,000 tons per month of material. The company can use its volume and marketing expertise as leverage, Spence says, helping to realize favorable pricing for the material it brokers.

American Shredding also offers security audits to its information destruction clients. In many cases, Spence says the company recommends the discontinuation of office paper recycling programs in favor of shredding all paper documents. "All of the paper we shred gets recycled, but you are adding tremendous security to the program," he says. "The liability is so huge compared to the cost associated with document destruction."

Spence adds that economies of scale usually reduce the per-unit costs for American Shredding’s clients. "If you pull a truck up and pick up 200 pounds of material vs. 600 pounds of material, your cost will be about the same," he says. "We won’t charge you three times the amount."

While medical, legal and financial institutions make up a healthy percentage of American Shredding’s customer base, Spence says all businesses can benefit from contracting with a secure destruction services provider.

American Shredding’s efforts to differentiate itself from other information destruction companies in its operating regions are critical, especially in light of the low barriers of entry that exist in the information destruction industry and the less-than-reputable companies that claim to offer security despite their steeply discounted prices. Perhaps for these reasons, Sutta and Spence say market conditions are very good in American Shredding’s operating regions.

While Sutta says American Shredding’s operating regions are competitive, he adds that the company’s focus on providing custom solutions to specific information destruction problems helps to give the firm an advantage, as do the years of experience the principals have in the destruction and recycling industry.

"I’ve been in the recycling and destruction business for more than 33 years," Sutta says. "The markets and challenges keep changing. The people are the most important element in business. The sophistication of the present group has advanced significantly in the past 10 years. Consequently, the customer is receiving much better service at lower prices."

Spence says market conditions are good, thanks to a growing awareness of regulatory requirements, though he does acknowledge that competition has led to a downward trend in pricing in the last couple of years. American Shredding has not felt pressure to drop its prices in an effort to attract new clients, however. "We are not afraid to walk away from a job," he says.

While a number of companies are expanding their service offering to include information management and records storage as well as information destruction, Spence says American Shredding is not interested in expanding in these areas, noting that the company’s expertise lies in setting up secure facilities for information and product destruction. However, that doesn’t mean American Shredding isn’t looking for growth opportunities.

"We are always looking for opportunities to grow," Sutta says. "For example, we are expanding our recycling operations at our destruction plants in an effort to service the demands of our clients." He adds, "If there are opportunities in other states or locations, we certainly will examine and consider them." n

The author is editor of Secure Destruction Business and can be contacted at dtoto@gie.net.