In a service business, if you don’t supply service, you don’t stay in business,” says John Ockenfels, President of City Carton Co., Inc. It is this philosophy that guides the 31- year-old Iowa-based company.
“Service, not ownership, is what we as individuals do,” adds John. “We don’t say we own City Carton, we say we run it.”
The “we” is the five Ockenfels brothers: John; Andy, Vice President of Operations; Mark, Maintenance Manager and EWI Equipment Company Manager; Tim, Plant Manager of Muscatine and Mount Pleasant; and Chris, Plant Manager of Document Destruction and Recycling Services (DD&RS) of Cedar Rapids, another subsidiary of City Carton Co.
The Ockenfels’ staunch commitment to servicing their clients’ needs has its roots in a smaller company – Ockenfels Transfer – started by their father Mort in Iowa City in 1964. This small company spun off City Carton Co. in 1967. The five brothers all grew up baling paper using an Economy up-stroke model 172 baler, which was built in 1935. Andy laughs as he recalls, “Chris had a Gaylord box as a playpen.”
Mort had a contract to dispose of old corrugated cartons (OCC) from the local Procter & Gamble Co. manufacturing plant. The good boxes were rebundled and sold to brokers. This is how the name City Carton was developed. Boxes that couldn’t be sold were baled and hauled to Peoria, Ill., where they were sold to Erlichman Co. for recycling. Ockenfels Transfer backhauled foundry wire to help pay for the trip.
OPERATIONS EXPAND
A key impetus to growth came from an unusual source – the Boy Scouts. Shortly after Mort put in that first baler, the local Boy Scout troop asked City Carton if it would buy newspapers. “We found that we could bale the newspapers,” says Andy. This started the company looking at additional processing and baling opportunities. In 1974, the operation expanded when City Carton brought the total to 12,000 square feet of space.
“One of the things that’s interesting is that the name ‘City Carton Co.’ doesn’t tell that we recycle,” says Andy. “We’re proud of the name. We’re not going to change it. Area businesses know who we are.”
What they are is a regional service company employing 145 people with six production plants in Iowa City (also the corporate headquarters), Cedar Falls, Mount Pleasant, Cedar Rapids, Davenport and Muscatine – all in eastern Iowa. Each of these facilities has production balers and support equipment. City Carton also owns a 50% stake in Greenfield Energy located within City Carton. Greenfield Energy produces fuel cubes from non-recyclable paper products. In addition, City Carton acquired EWI Equipment Co. in March 1995 and DD&RS in February 1996 (please see box above).
PAPER AND THEN SOME
Currently, City Carton processes more than 160,000 tons of material through its various operations. The company uses a fleet of more than 250 semi trailers and 30 trucks and tractors to bring paper from its customers to one of its plants for sorting and baling.
Each of the six plants buys from industrial, commercial and community generators generally within a 75-mile radius. City Carton supplies customers with trailers at no charge. When a trailer is full, the company exchanges it for an empty one.
“As an added service, each of the six plants picks up bales from generators, such as supermarkets, K-Marts and Wal-Marts,” says Andy.
“Every Wal-Mart bales on-site,” adds John. “We have the contract to do this service for all the Wal-Marts in Iowa.”
At all the plants the paper is sorted by grade. City Carton uses mostly two-ram auto-tie equipment such as the HRB-8 and International Press & Shear 1288 balers. In the Davenport plant it uses the AMBACO 8043H horizontal baler.
Andy also notes that in the past ten years the company has bought hundreds of tons of materials including tin and steel cans, plastic and glass from curbside collections. “We don’t have the luxury of saying we just recycle paper,” says John. “One way or another these materials wind up in our plants.”
Andy points to the new directions the company has taken. “We’ve gotten into specialized office paper recycling,” he says. “And we’re getting into post-consumer plastics and other non-paper grades to a greater extent.”
Keeping with its service-oriented focus, City Carton takes pride in the fact that not only is it able to service the big accounts such as Procter & Gamble Co., but the smaller ones as well. “When a customer says it has material, we say ‘we can handle it,’” says Andy. “We always ask customers what they want us to do, then we work out a program for them.”
Several of City Carton’s larger customers want the company to handle its recycling and waste hauling needs. Although City Carton is trying to stay out of waste hauling, it does have side agreements with trash haulers to take customers’ trash to landfills. Again, the emphasis here is on customer satisfaction.
“We have a lot of long-term customers,” says Tim. “Many have become personal friends.”
Chris emphasizes that City Carton pays its customers promptly. He notes that this policy bonds the relationship between the company and its customers.
“We put checks in the mail on the tenth of each month,” says Chris. “There is a fear by some in this industry of not getting paid. We have the reputation of paying promptly.”
UP AND RUNNING
Another way City Carton services its customers is through its equipment division, which was expanded by the EWI Equipment Co. acquisition. These companies buy, sell, lease, repair and service equipment from many manufacturers.
“We have a very qualified team of maintenance staff that maintains and rebuilds our fleet and production equipment to keep it all operating at peak performance,” says Andy.
City Carton’s maintenance staff not only services their own equipment, but that of its customers as well. Chris recalls that City Carton was able to replace one customer’s baler within a day. “We typically rebuild our own production equipment by shutting down on Friday and being back in operation by Sunday,” he says.
John also points out that City Carton designs some of its own equipment. A specialized guillotine shear was designed to split rolls of paper, which can then be baled more easily and cheaply.
SELLS TO PAPER MILLS
City Carton sells to large and small paper mills alike. “City Carton is able to set up and meet the requirements of individual mills,” says Andy.
The company ships to mills throughout the United States, Canada and Mexico. Four of the six plants have rail capacity to ship material. City Carton also ships overseas to countries such as South Korea and Taiwan through special brokers.
Six years ago City Carton started its brokerage division. “We go out and work with municipalities and small recyclers,” says Andy. “We buy and market material directly to the paper mills.”
City Carton, notes Andy, gives top dollar to their customers, and then sells to the mills. Although City Carton does not make as much money per ton selling to the mills in this manner, the brokerage division enables the company to be a full-service recycler.
COMMUNITY INVOLVEMENT
When it comes to community involvement, City Carton is right on the leading edge. The relationship between the company and the community is readily apparent to the observer looking at the individual plants.
“The Iowa City plant is literally a few blocks from downtown Iowa City, the University of Iowa and located on the banks of the Iowa River,” says John. “We make sure all of our facilities look good to the community. Just because we’re in the recycling business does not mean that we cannot maintain a good appearance.”
Tim adds that all of the grounds of the plants are landscaped and properly maintained.
But community involvement for City Carton goes far beyond appearances. At each of its plants the company maintains a drop-off area for newspapers, corrugated cardboard and other grades of paper, plastics and metals. “These drop off points are open 24 hours per day, and are very clean and popular in the communities,” says John.
“We also buy advertising space explaining to the community the proper ways to recycle,” says Chris. “And we do presentations along with city officials to their communities on how to maximize their recycling efforts.”
Chris points to a cooperative venture between City Carton and the city of Muscatine as an example of the company’s commitment to the communities in which its plants are located.
“At their request, we developed a full-service recycling center in their building,” says Chris. “We pay a rental fee based on production. This is an example of a private industry working with local government for the benefit of both the community and industry. We’re not competing with the city, but rather working with them.”
“This is a partnership that works very well,” says Tim. “We push partnerships.”
Being a good neighbor also means paying close attention to environmental issues. “We have developed a stormwater run-off plan as required, and have avoided installing underground storage tanks,” says John. “We have notified our customers that we will not accept any hazardous materials at any of our facilities. When we purchase any property we now do an environmental background check. We are continuously watching for problems and constantly monitoring our equipment to ensure that we do not leak oils or fuels that may create pollution.”
John adds that City is trying to change some of the public’s perception by designating recyclable commodities as “scrap” and not as “waste.” For example, scrap paper versus waste paper.
“It’s important to let the public know that we deal in specific commodities and not trash,” says John.
John points to a key piece of legislation pertaining to “superfund liability” working its way through Congress. The bill, according to John, would exempt certain recyclers from superfund violations if they sold to mills materials designated as “recyclable commodities.” Under current law, paper recyclers can be held liable for mills’ superfund violations if they sold the mills any paper. However, the other suppliers actually responsible for the pollution may not be liable because they sold the mills a new raw material for production.
MARKET FORCES
As with any recycler, City Carton is finely attuned to market forces. “We’ve been lucky the past three years,” says Chris. “We’ve been able to move our material.”
John adds that, “we ensure that everything moves out as fast as it comes in. We’re able to market it.”
For the foreseeable future John sees a drop in the demand for OCC. The demand for ledger or high-grade papers appears to be more stable. He notes that plastics have been down and will probably stay there.
LOOKING TO THE FUTURE
What’s in the future for City Carton? To understand where City Carton is going, it’s helpful to take a look at the not-too-distant past. In 1990, Mort, age 65, happily retired. Two years later five of the Ockenfels brothers bought the company.
“The transition involved a lot of discussion among family members,” says John. “This was a planned sequence of events and included input from the entire family, including spouses, key employees and outside consultants. We make decisions as a group. We can pick up the phone and hash things out.”
One of the key things the Ockenfels are “hashing out” is a controlled, constant expansion of the company. “If you’re not growing, you’re dying,” says Tim.
John adds, “we are not out to be the largest recycler in the world. We’ve declined opening plants in other states. But we’re growing at a tightly controlled rate. Guiding our concept for expansion is the philosophy that we open a plant in a community only after we have developed enough local desire for our services to ensure a good tonnage basis.”
Specifically, City Carton is building a new plant in Cedar Rapids, adjacent to the existing one. The plant will be 45,000 square feet and will have two International Press & Shear balers and a Countec sorting system. The plant, which is a $3 million investment for City Carton, is scheduled to come on-line this spring and will have four rail docks and 12 truck docks. It will be their largest and most efficient building.
Also in the works for City Carton are plans to make additions to existing offices and shops. To keep things running smoothly, the company recently installed a Wide Area Network to help connect the various plants to the main office.
Andy projects that City Carton will process 175,000 tons of material in 1998, a 15,000 ton increase over 1997.
PEOPLE BUSINESS
The Ockenfels brothers are quick to emphasize that it takes more than plants and machinery to run a successful company.
“We believe very strongly that we must provide the highest level of service and options to our customers, that our pricing must be fair for all, and that contact with our customers must be friendly and professional,” says John. “Without a doubt, in my opinion, one of the greatest strengths that we have is the teamwork of our family and employees. Each brother has different talents and interests. This, combined with our excellent team of managers and employees, allows us to be very diverse and competitive.”
“It all comes down to teamwork, from the new hire who sorts paper, all the way up to the president of the company,” adds Tim.
Andy points out that a process is in motion to bring the next Ockenfels generation into the company. This generation of Ockenfels will find that they’re part of a company built with well-deserved and well-earned family pride.
The author is editor of Recycling Today.
Sidebar
No Dumpster Divers
Document Destruction and Recycling Services (DD&RS) shreds everything from paper and microfilm to shoes and videocassettes. “Many of our customers are companies that don’t want ‘dumpster divers’ getting their hands on their information or products,” says Chris. “These companies don’t want these items to get out to the public.”
DD&RS also services physicians, lawyers, hospitals, phone companies, telemarketers and others. These clients frequently have smaller volumes to shred and want “valet service.” DD&RS meets this need by offering customized services, says Chris.
Security is a top priority for DD&RS. Customers are supplied locked bins and the locks on the company’s buildings are electronic and must be opened using punch codes.
“Customers can and do watch their items being shredded from a special viewing area,” adds Tim.