Big Little Guys, The

Bethany Barber

In the waste management industry, when people talk about "that big company in Texas," you might think that refers to Houston-based Waste Management Inc. (WMI), or Browning-Ferris Industries (BFI), which recently was purchased by Scottsdale, Ariz.-based Allied Waste Industries. While those certainly are industry powerhouses, there are at least three other stand-outs that may not have big ticker symbols, but are noteworthy companies nonetheless.

A Landfill in Time Call it El Paso Disposal, call it Rubbish Removal Inc. or call it Southwest Disposal. No matter which one of its many names you use, it's a success.

El Paso Disposal, as it's officially known now, was founded 28 years ago by a music major with a rented truck and a $5,000 loan from a friend. Today, J.O. Stewart still orchestrates the company's operations.

A commercial and residential hauler, El Paso collects residential waste from approximately 30,000 homes in western Texas and New Mexico. Recycling also contributes to the company's bottom line. However, this segment represents only a fraction of El Paso's business, with only 10 of the company's more than 300 employees needed to handle all recycling operations.

Contracts with military bases, including Ft. Bliss, El Paso, Texas, and Haviland Airforce Base, El Paso, further contribute a steady stream of waste and revenue, but the acquisition of the Camino Real Landfill in Sunland Park, N.M., is the real cash cow, according to Stewart.

"While the big companies - the WMIs and the BFIs - of 28 years ago were busy pursuing major markets, I had time to get my company started, make mistakes and grow," he says.

Primarily Stewart learned the importance of where to get and dispose of his waste. "When the big companies decided to move in, I got a landfill."

The 600-acre Camino Real landfill, just outside of Texas, is the only landfill in America to border Mexico. It houses a border patrol facility on-site, and about 150 acres that currently are permitted to accept waste. Once fully permitted, the site will have a life expectancy of nearly 75 years, Stewart says.

"Maquilladora waste," or manufacturing company waste, is the largest contributor to the landfill, which has led to its success. Maquilladora waste is the term Stewart applies to waste collected from U.S. manufacturers in Mexico. These plants, although located in Mexico, are required to bring waste back to the United States for disposal according to the 1983 La Paz agreement between the United States and Mexico. Nearly 500 American-owned plants in the state of Chiuaua in Mexico bring their waste to the Camino Real Landfill.

With this waste and with the landfill, 1998 revenues have climbed to more than $40 million. And the trend should continue. According to Stewart, El Paso will grow by providing the best waste service in west Texas and New Mexico.

Living Large and Growing It was five years ago that WasteExpo last came to Dallas and five years ago that Waste Age spotlighted the city's independent private hauler, Community Waste Disposal Inc. (CWD) [See Waste Age, April 1994, p. 69].

At that time, the 10-year-old company was experiencing growth through its recycling business, including its year-old materials recovery facility (MRF).

Today, CWD's 60 vehicle fleet collects approximately 252,800 tons per year (tpy) of refuse and 25,000 tpy of recyclables from its commercial and residential customers, making it the largest independent waste company in the Dallas county area.

In 1998, the company reported revenues of $11.5 million, and it hopes to see more than $13 million in 1999. CWD also anticipates another 15 percent to 20 percent increase in revenues annually.

Founded in 1984 by Doug Hall and Greg Roemer, CWD began as a side loader hauling company for area apartment complexes. Front loader and roll-off services were added several years later, followed in March 1992 by the company's door-to-door recycling program.

CWD's growth is due to blind ambition, jokes Roemer, CWD president and co-owner. But the ability to stave off competition from the "big three" - Allied Waste Industries Inc., Scottsdale, Ariz., which recently purchased BFI; Republic Services Group, Ft. Lauderdale, Fla.; and WMI - stems from personal service.

"The primary difference between us and the big three publics is that we, as owners of the company, generally know our clients and can sell personalized service," Roemer says. "We can work to meet their needs."

This starts with treating CWD's 110 employees as family members. "Your employees see it in you, and your customers do, too," he says. CWD further grew its business processing recyclables at its 43,000-square foot MRF. Serving customers in 12 cities in northern Texas, the company collects more materials than any other hauler in the region, including six grades of plastic (No. 1 through No. 7), four colors of glass (blue, brown, clear and green), aluminum, mixed newspaper and tin.

CWD's recycling program not only meets the needs of its 240,550 residential customers, it also has been honored by Keep Dallas Beautiful and the Dallas and Denton County Corporate Recycling Councils. Further attesting to CWD's success, the company also received an Environmental Excellence award last year from the Texas Corporate Recycling Council for its greenwaste program.

Profitable Game Twenty-two years ago Texas Disposal Systems Inc. (TDS), Austin, Texas, was formed as a one-truck, one-account waste hauler. Today, the company is the largest privately owned solid waste collection and disposal company in Austin and central Texas, with revenues reaching $50 million.

Bob Gregory, who worked his way through college in the scrap metal business, started hauling solid waste to diversify in the local market. Joined by his brother Jim in 1977, the two formed TDS.

Although hauling is the company's major revenue source, TDS began disposing of waste in 1991 by opening the state's first permitted landfill, recycling and composting facility.

The 927-acre landfill - Texas Disposal Systems Landfill Inc. - is located just outside of Austin and accepts more than 2,000 tons per day (tpd) of waste from 17 surrounding counties in the 342-acre permitted portion.

TDS met with tremendous "not in my backyard" (NIMBY) opposition to its landfill from 1988 to 1993, but has faced little since. This is due to positive relationships with the community and providing both permitted land and adjacent land for a wildlife game park.

"We needed to replace fences for site security and litter control," Gregory explains. "We didn't want to put up a chainlink fence, so we decided on a game fence - the kind used on exotic game ranches all over Texas."

Within the fence boundaries, the wildlife game park now houses more than 700 animals from 23 species, including cattle, buffalo, deer, antelope, impala, gazelle, ostriches, emus, zebras and others. "The neighbors love it," says Gregory, adding that TDS gave tours to more than 750 individuals last year from school, church and environmental groups.

Recycling and composting also play a role in TDS's business. Nearly 5,500 tons of recyclables and 14,500 tons of compost are processed each year.

The recycling and resale center, where customers bring in recyclables and employees market the materials to other customers, accepts everything from bicycles, computers, antiques and furniture, which are dropped off and sold everyday. The Austin Chronicle has touted it as the "best unadvertised garage sale in town."

Composting is TDS' newest division. Called Texas Organic Products, the large-scale commercial composting operation opened in 1997. It collects more than 14,000 tpy of waste, selling about 14,700 cubic yards of compost annually.

With such diversified operations, TDS has earned awards from the cities of Austin and San Antonio, Keep Texas Beautiful, Keep America Beautiful and the Recycling Coalition of Texas.

Overall, Gregory says TDS is old fashioned about growth and expansion. The company will increase its revenues by gaining new accounts and adding municipalities to its service.

Location: El Paso, Texas

Year Founded: 1971

Employees: 300

Vehicles: 150

Business Breakdown: 75 percent commercial; 25 percent municipal

1998 Revenues: Approximately $40 million

Location: Dallas

Year Founded: 1984

Employees: 110

Vehicles: 60

Business Breakdown: 80 percent commercial; 20 percent municipal

1998 Revenues: $11.5 million

Although offers come in frequently, at least three successful Texas companies won't succumb to industry acquisition pressures.

"I get phone calls at least monthly," says Greg Roemer, president and owner of Community Waste Disposal, Dallas. "I simply tell them I'm not interested."

Roemer says he has never told anyone he would sell for the right price because he doesn't want his energy to go toward negotiations instead of operations.

Bob Gregory, principal owner of Texas Disposal Systems Inc., Austin, Texas, says he, too, is contacted by big companies wanting to purchase his company. "But I've never had any interest [in selling]," he says. "I've never shown our financials to any of them."

J.O. Stewart, owner of El Paso Disposal, El Paso, Texas, takes a different approach."We've received a number of generous offers to buy that I've looked at," he says. "We owe ourselves that."

However, after evaluating what's on the table, Stewart has decided not to sell. "Money is not a priority for me," he says. "For now, I still want to do garbage."

Location: Austin

Year Founded: 1978

Employees: 215

Vehicles: 128

Business Breakdown: 55 percent hauling; 45 percent landfill disposal, composting and recycling

1998 Revenues: Estimated $25 million to $50 million