News
October 30 , 2007
Some firms’ wastes turn into another firm’s profits
From paper recycling to document destruction, this entrepreneur keeps finding profitable niches. His gross is up 50 percent this year.
By Dick Youngblood, Star Tribune
October 30, 2007
I've conducted some memorable interviews in my long and undistinguished career. There was the meeting in the 1970s with U.S. Sen. Hubert Humphrey, who wandered off into an 18-minute harangue about some arcane legislation he was pushing before I even had a chance to ask a question.
It took a barnyard euphemism learned in my native North Dakota to halt the outburst and steer him onto the subject I was pursuing.
Then there was the Red River Valley farmer who abruptly ended our conversation after I had complimented him on his splendid wheat crop. "It's barley," he snapped as he walked away, apparently deciding that my agricultural expertise did not warrant further attention.
But the most unforgettable encounter occurred 21 years ago and involved a young entrepreneur named Ron Mason, a struggling paper recycler who was one of the first to jump into the business of destroying sensitive documents for an increasingly nervous business community.
The interview was conducted in his cramped and unheated office inside a small, dark cavern of a warehouse in Golden Valley on a bitterly cold December day. I'm happy to report that Mason is now ensconced in a 450-square-foot office that features yards of faux wood, a smattering of limited-edition art -- and plentiful BTUs of blessed heat. The office is situated at one end of a 45,000-square-foot warehouse, paper-recycling center and document-shredding plant in St. Paul's Midway area.
Welcome to Rohn Industries Inc., a company that Mason, 49, started in 1983 with a $1,200 federal tax refund and built into a thriving business that is on track to gross more than $8 million this year. That's a 50 percent jump from $5.4 million in 2006 -- and better than four times the total in 1996, the last time I checked on him.
The largest part of his business remains recycling, which has grown beyond waste paper to include a variety of waste streams ranging from glass and plastic to wood pallets and electronics.
That operation, which carries the Rohn Industries moniker, grossed $3.2 million in 2006 and is headed for $5.6 million this year, the result of both rising paper prices and the fact that Mason fired his recycling sales rep because of his failure to beat a competitor to the key source of high-grade scrap paper -- commercial printers.
"The guy just wasn't doing the job," said Mason, who identified the culprit as a fellow named ... Ron Mason.
"I was too involved in operations," said Mason, who assigned a seasoned sales rep who has hoisted the roster of printer clients more than 20 percent in the past three years.
The other part of the business, dubbed Shred Right, focuses on destruction of sensitive documents and has grown from a $250,000 gross in 1996 to $2.2 million last year. The business, which also provides secure destruction of defective, obsolete and sensitive products ranging from computer hard drives and software to breath fresheners with outdated labels, is on track to gross $2.5 million this year.
In the last 10 years, Mason has invested upwards of $850,000 in the shredding system, including equipment, security cameras and access card readers. He also has added custom-designed software that allows clients to track their confidential materials online at all phases of the collection and destruction process and even view the destruction process in real time -- all in the interest of giving them "an extra measure of assurance," Mason said.
And so it goes for a gent whose strengths lie in an ability to spot opportunity, a willingness to take risks and a talent for offbeat promotion. Consider, for example, the steps taken in 1985, when he realized that some of his paper-recycling clients were willing to pay to have sensitive documents hauled to an incinerator.
He bought an insurance policy to cover any losses resulting from document mishandling, added the word "bonded" to his promotional materials and topped it off with a fancy "Certificate of Destruction" that he drew up himself. His business cards proclaimed unblushingly, "Document Destruction with a Flare." I loved it.
When he started the document destruction business, there were but a handful of companies in the business -- only one other in the Twin Cities. Today, there's a trade group, the National Association of Information Destruction, with 900 members.
While paper recycling is still his revenue leader, Mason sees growing concerns over identity theft and industrial spying making secure document destruction the growth engine of the future.
His strategy is to begin acquiring some of the small companies that flocked to the document destruction business in response to growing identify theft problems and now lack the capital to expand and/or the cash flow to survive. To that end, he recently negotiated a $1 million credit line to finance takeovers.
Mason has made no acquisitions so far, but he has two deals brewing, one with a company with $1 million in revenue, and figures to have them completed by year end.
Contact:
Ron Mason, President, Shred Right, Inc. at 651-647-1300
Jim Beran, Sales Manager, Shred Right, Inc. at 651-647-1300
About Shred Right, Inc.
Shred Right (www.shredrightnow.com), located in St. Paul, Minnesota, has been providing secure, complete shredding solutions for any size business for over 20 years. Their high-security facility exceeds the rigorous AAA-standards established by the National Association for Information Destruction (NAID) quality certification program. Shred Right’s shredding operation render all material legally non-negotiable and indecipherable with a Double Destruction Guarantee, backed with a $1 million blanket dishonesty bond and a $1 million errors and omissions insurance policy. Shred Right is a privately held company located at 862 Hersey Street, St. Paul, MN 55114.
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