Strong and Steady

Sometimes successful companies grow on the shoulders of those that came before. Vista Fibers, Dallas, is one such company. A packer, broker, exporter and material recovery facility operator with four facilities in Texas and one in Louisiana, Vista deals in all grades of paper, along with aluminum and bimetal cans, glass and plastics.

The company was formed in 1986 by Tom Lyon, president, and three other partners – John Folz, Vista’s executive vice president, Ed Gray, vice president, and Mike Vivian, controller. All four were at one time employees of the former Consolidated Fibres. Vista Fibers got its start when the partners purchased three facilities Consolidated was selling as it made a shift in focus toward emphasizing its export business.

"It was sort of a ticklish situation in that they continued to operate and we continued to operate," says Lyon. "But I think both parties were fair and honest in how they went about business after the sale."

The company has gone far from these beginnings. Today, Vista has 140 employees. Last year, the company processed around a quarter million tons of materials, and had sales in excess of $40 million.

Part of the company’s success is due to its position as the continuation of companies that came before, as Vista is at least partly a product of the consolidation the industry has undergone over the past number of years. Consolidated Fibres was originally a project of Browning-Ferris Industries, Houston, which decided to get involved in recycling in the late 1960s, according to Lyon. To do so, BFI purchased a number of existing companies, some of which had been in existence since the late 1890s.

"In Dallas, for instance, they purchased American Paper Stock, the old Kaplan company," he says. This makes for venerable parentage. "We are a continuation of companies that have been here since the turn of the century."

Vista Fibers operates five processing plants, along with a brokerage group. The processing plants are located in Dallas, Lubbock, Houston, and San Antonio – all in Texas – and New Orleans. After starting with the original three plants from Consolidated, in 1988, the company built a facility in Houston. Later, Vista purchased two other Houston companies, Able Recovery and a U.S.R.I. facility, and consolidated all three. Vista also bought another U.S.R.I. plant in San Antonio.

Most recently, Vista expanded its San Antonio operations (a continuation of a company that has been around since the 1920s) by buying an existing 50,000-square-foot building and adding another 25,000 square feet and new equipment. Then it shut down its old building and moved to the new one. The facility handles all of the materials from the city’s curbside recycling program, which services most of the city’s 1 million people.

"They advertise it as the largest single citywide program in the country," says Lyon. "I don’t know if that’s true, but I guess what they’re getting at is that most cities have multiple groups doing it. The city does all of the curbside pickup and they bring it to us, and we do all the processing and marketing of the materials."

The San Antonio facility is currently running about 5,000 tons per month on a single shift, says Lyon, of which about 2,800 tons are from the city’s curbside program. The rest is from commercial and other accounts.

Vista also handles curbside recyclables in parts of Dallas and Houston, as well as some of the smaller communities surrounding New Orleans, says Lyon. The company also processes and markets recyclables for hauling companies in areas where the haulers have collection programs but no processing facilities.

Although it had its beginnings in the recycled paper business, Vista quickly got involved with processing and marketing the range of materials collected from municipal curbside programs.

"We saw the trend and where it was going, so we began to diversify in the late 1980s and early 1990s," says Lyon. "We don’t want to be in the hauling business – we have to be, but we really don’t want to be. Our expertise is in processing and marketing the commodities."

However, Vista does some collection of materials, with its own fleet of 20 or 25 vehicles. That includes roll-off trucks, rear-end packers and semi-trailers, says Lyon. "As the haulers have gotten more into the business on their own, it has forced us to do some of our own hauling."

Vista handles all paper grades, although the company is more involved with some than others. "Corrugated is the largest volume," says Lyon. "ONP is probably our second largest volume material, and the office waste programs that we’ve set up in the last couple of years are probably our third largest."

All five sorting facilities could be called MRFs, as they each take in mixed material of some type and sort it, says Lyon. But each one is set up differently, operates independently, and handles its own mix of materials. For example, in Dallas, the company handles plastic materials from bottle manufacturers, along with compacted loads consisting of mixed OCC and wooden pallets. The San Antonio facility, on the other hand, handles quite a bit of commingled recyclables from the city’s curbside program.

The main processing done by the facilities is sorting and baling, followed by marketing the materials. According to Lyon, the combination of this full-service program, along with the brokerage operation, makes the company somewhat unique.

"I think it’s extremely important to have that," he says. "We can go to a company and offer complete, full service. We have our own trucks, we have our own processing facilities, we have our marketing arm, and we can respond to whatever their needs are."

Buying the bulk of its materials from other firms in the Gulf Coast region, Vista considers itself a regional company. But the firm sells some materials nationally and even internationally, says Lyon.

"We have a little business in the Midwest and a little in the Southeast, although our major work as far as collection and processing of material is primarily in the Southwest," he says. "But we sell all over. Mexico is a big customer, and we sell into the Midwest as well as our local area."

With their own representation, the company only sells to Mexico. But they sell some material to other countries through brokers.

Vista’s brokerage represents about a third of the total volume of business, says Lyon. The brokerage mainly handles paper that is bought directly from a company such as a corrugated box plant or an envelope house and then sold.

The company’s primary suppliers are industrial companies such as envelope houses or printers, and the second main source of materials is commercial outfits such as grocery chains. The third main source is haulers – mainly independent haulers and Waste Management Inc. The company then sells the materials to mills, or directly to the end consumer.

In addition to the three paper processing plants the company purchased from Consolidated, part of the package included two other types of businesses.

"There was a small wire brokerage business that we purchased also as part of the Dallas facility," Lyon explains. "Then in New Orleans, we had a corner of the business where we were doing record storage."

Lyon and his managers developed those two sidelines into larger, stand-alone businesses. Along with Vista Fibers, they are part of Allied Vista Inc., the parent company owned by the four associates. Under the parent company are Wire Product Manufacturing Co., CBD Security Archives Inc., and Vista Fibers. But the recycling business represented by Vista Fibers is the company’s main focus.

"The wire manufacturing operation is a very small company, but now we actually have four machines that make the single-loop bale ties," says Lyon. "It’s off on its own now, operating as a separate identity. It’s not a real large company by any means, but it gives us a consistent, steady bottom line."

In addition, he says, CBD – under the direction of its general manager, Shirley Hicks – has grown onto the largest document storage facility in Louisiana, with an additional facility in San Antonio, Texas. Although record storage may sound like a simple business, in fact it can be very sophisticated, especially as CBD concentrates on providing the services that go along with it, says Lyon.

"If you wanted to, you could send us a whole trailer full of boxes of records," he says. "We’ll go through them and index and barcode them, and have the whole thing in a condition such that if you call us up this morning asking for a particular folder, we could have it to you by this afternoon. We also do media storage, which is climate controlled. So it’s a very sophisticated business. It’s not the old ‘stick a box up on the shelf, and if you need it, holler.’"

Although the record storage business only provides about 6 percent or 7 percent of Vista’s revenue, and the wire products business only provides 1 percent or 2 percent, these two segments are much more steady than the constantly fluctuating recyclable commodity markets, although recycling is still by far the bulk of Vista’s business.

"Those two businesses are very consistent – they don’t have the cycles that the paper industry has," says Lyons. "This has made a tremendous impact by giving us some stability in bad times."

But at the same time that Vista benefits from diversification, the company is very clear that its main focus is recycling, says Lyon.

A big part of Vista’s corporate culture is an emphasis on integrity and responsiveness to both suppliers’ and customers’ needs, says Lyon. This means paying bills on time, being honest in their dealings, and packing materials to a customer’s specifications.

"We don’t make a generic pack and then market it in the general market – we actually make a pack of whatever the customer needs," he says. "We’re not the biggest ones around, but we’re large enough that we sell to a lot of different mills, and it gives us flexibility. If a mill doesn’t need paper this month, we have the ability to ship it somewhere else. Likewise, if they have a fire and need some extra paper, normally we can come up with it for them."

Some mills are starting to demand their own unique specifications for materials. This may be a coming trend, especially for certain grades. "Office waste is definitely at that phase now," says Lyon. "Each of the mills that are major consumers have a spec and you have to be responsive to that. But if you’re in corrugated, that’s more of a generic pack."

Vista applies the same idea of responsiveness to its own employees, and at the same time finds ways to motivate them to produce at a high level. As a result, the company has a profit-sharing plan so that all of the employees benefit from profits when they are made. "Our facility managers can make very good money getting a percent of their bottom line," says Lyon, "and our brokers have a major commission program."

Lyon has so much faith in the knowledge and capabilities of his people that he would not worry overly about taking a vacation at any given time. "It took a lot of time and effort to put the thing together when we first started, and about a month later I took two weeks off, and people couldn’t believe I could do that. But it’s not a one person company by any means. You’ve got to have good people. And that’s hard to do, don’t get me wrong – you have to work hard to train people, all the way from bottom to top. We’ve done that, and I think we have a group that very fairly reflects what we wanted to do."

Another key to success in any business, says Lyon, is for the "guy at the top" to really understand the nature of the business the company is engaged in. "I think there are people at the top of some of the large companies who don’t have any comprehension of what goes on in their plants," he says. "Everybody should understand the business they’re in."

Having integrity, being responsive to customers, and treating them as you’d like to be treated works well in the paper business, says Lyon. "I get help – if I need to move paper, there are a lot of people I can call who will take it whether they need it or not," he says. "The same thing is true on the other side – they know they can call me and say ‘don’t ship it’ if they are desperate."

Consistency is also key. In New Orleans, for instance, the company handles recycling for the local newspaper, the Times-Picayune, says Lyon. The company, under various ownership, has handled this account since sometime in the 1920s.

"We’ve had new people, and they’ve had new people, but it’s the same relationship that was there in 1920," he says. "And it happened because of consistency – being there every day, living up to what we said we were going to do. We’ve filled up half of New Orleans with paper being stored, because we couldn’t sell it, but we still lived up to our contract. On the other hand, they’ve sat there and said, ‘okay, the market has changed, we know we could make more money now, but let’s leave it alone for a couple of years and let them get well again.’ And those types of long-term relationships work."

Unlike some areas of the country, Texas does not have flow control or mandated recycling, so the business is still able to operate mainly on economic factors, says Lyon. "If you make money at it, it works. If you don’t, it goes away. Whereas in many parts of the country, primarily the Northeast, it’s forced, whether it makes money or not. We don’t have that problem down here – yet."

The main issue facing paper recyclers in Texas, along with the rest of the country, is dealing with the market’s sometimes drastic fluctuations. Recently, there has been a bit of a shakeout in the paper recycling industry as record high prices fell to lows, and some new players in the market abruptly left, says Lyon.

Stormwater compliance is probably the biggest environmental issue facing the paper recycling industry right now, he adds. This is something that paper recyclers need to take a closer look at, he says, as it is currently more clear how the regulations affect metals recyclers.

"Some paper recyclers are turning their backs and saying ‘that doesn’t involve me,’ but it’s going to," he says. "It is forcing us to take a new look at how we do things. New facilities are more and more indoors. Our new San Antonio facility is strictly indoors, where we were predominantly outdoors before."

Recyclers have to keep abreast of local and state regulations as well, says Lyon. And federal laws regarding workers also adds to the cost of doing business.

"When you really get down to it, even in the simple business we’re in, you can easily end up with 50 or 60 percent cost over and above what you pay a person for the various fringes involved – unemployment, workman’s comp., hospitalization (we furnish insurance to all our employees) – and it adds up," he says. "And on top of that, you have the environmental issues."

With this sort of overhead, it is doubly important to be diversified in order to be able to survive market fluctuations, he says. "If you have a plant that does well in a good market but gets hurt in a bad market, you need diversification either in the brokerage or, in our case, into two other lines of business," says Lyon. "This helps us not have to make drastic, distinctively bad judgements in a bad market simply to survive. We can always approach it on the basis of the long term."

Vista will continue to grow, but in a measured way, says Lyon. The company may add another facility or two, but will probably contain its scope to the Gulf Coast region rather than spreading its reach throughout the country.

"The demand in this area, and the new mills that are coming in and providing new consumption, are going to give us some opportunities," says Lyon. "And we’ll probably grow some with that, but I don’t see us doubling or tripling in size. You can outgrow yourself, and that’s a major problem, particularly if you don’t have the people. But at the same time, you’re not going to sit still. You’re either going to grow or you’re going to shrink."

Vista is more likely to acquire another firm than to start another facility from scratch, he says. In addition, the company is constantly working to upgrade its equipment and its existing facilities.

Vista’s officials have been in the industry for a long time, and have a great deal of knowledge about the market, says Lyon. "We know, within reason, what’s going to happen out there."

Although markets for paper are currently in the doldrums, Vista is still making money. This is partly due to the company’s positioning, and also due in large part to its close relationships with customers.

All of these factors enable Vista to be a strong and lasting player in the market. "We have not positioned ourselves to necessarily be able to make big money in a good market, we’ve positioned ourselves to always be able to survive a bad market," says Lyons. "We reinvest our profits – we’re in the business for the long term."

The author is editor of Recycling Today.