Shredding Paper for Profit

Kim A. O'Connell

At a time when markets for paper are down, one Midwest company has found a way to turn a profit from paper. Security-Shred, Lenexa, Kan., offers a mobile, high-speed document-shredding business for commercial security operations.

Working out of a 40,000-square-foot facility, Security-Shred specializes in confidential material destruction for clients throughout Missouri, Kansas, Illinois, Nebraska, Oklahoma, Colorado and Iowa. Clients range from small firms and individuals to some of the largest banks, hospitals, government agencies and law firms in the region. The company offers both on-site and off-site shredding, charging by the pound for one-time services or by the container for regular contracts.

The heart of the facility is a 200-horsepower (hp) strip shredder made by Allegheny Paper Shredders, Delmont, Pa., and specifically designed for security destruction. The shredder can process 20,000 pounds of paper material in an hour, according to the company. Additionally, Security-Shred maintains a fleet of collection and mobile destruction trucks.

Security-Shred's facility is especially designed to handle secure operations. All operations are performed indoors, with access monitored at all times. Visitors must sign confidentiality agreements before accessing any secured area and always must be escorted.

After material has been shredded and baled, it is transported in locked trucks to regional re-pulping facilities, where the paper is recycled into other products such as paper towels and writing paper. Materials then head for deinking pulp mills or tissue mills, occasionally including facilities as far away as Mexico or Korea, depending on the markets.

Although the current markets for paper are down, the terrorist attacks actually boosted many security-based shredding companies. Standard & Poor's, New York City, recently projected that in the next year, U.S. companies will find themselves spending an overall $150 billion to $200 billion to bolster security measures.

“Whoever's in the scrap waste paper or shredding business will be impacted when markets go down,” says Mike Bender, owner and president of Security-Shred. “Compared to most recyclers, however, we generate fees for our service, and we have been relatively stable.”

Most waste paper packers, Bender explains, may decrease or increase their collection levels based on the relative value of the paper. But Security-Shred's clients tend to maintain their security shredding requirements, regardless of the markets.

The terrorist attacks have affected this industry both negatively and positively, Bender says. “We've been affected positively because of the emphasis on security,” he says. “Yet I've also seen so many recycling companies that are suffering, looking for hope in a bad market, and looking at our industry as a quick fix. They think they're going to jump into the shredding business.”

Another obstacle is that so many of Security-Shred's mid-range competitors have been bought by larger corporations. “There's only a handful of us that haven't been acquired,” Bender says. “But we've been doing this long enough that our primary goal is to continue to service our customers, keep the costs down, and keep the service as high as possible.”