Recycling trash into cash
ICAN Headquarters: Fayetteville President: Bill Hester Employees: 32 Founded: 2002 Projected 2010 revenue: $2.2 million Business: Hauling waste and recycling
After graduating from N.C. State and working for the city of Fayetteville as a landscape architect, Bill Hester drifted into rehabbing and demolishing old buildings. That got him into hauling demolition and construction waste, and by 2004 he had established ICAN as the largest independent waste hauler in the region. But all along, he had been toying with the idea of building a business from the tons of stuff he threw away. It took the company three years to get a solid-waste permit from the Department of Environment and Natural Resources — along with a bit of free business advice: “The state told us that we’d probably fail.”
It was almost right. In 2008, two things happened. “Construction slowed down; competition picked up,” Hester, 50, recalls. “We lost hundreds of thousands of dollars. It was ugly. You pretty much wipe out your retirement, and you leverage what you can leverage.” His three partners proposed selling the whole shebang or peddling off the pieces. “It seemed like if that happened, it would be a personal failure, so I sort of dug in my heels.” Intense competition had made hauling waste — accounting for 40% of revenue — unprofitable. “We had to start pricing our service fees 30-40% lower than they were before.” Without a landfill, the company paid for anything it didn’t recycle.
“We had to recycle or basically fail.” When ICAN’s managers and workforce resisted the change, “we pretty much cleaned house and hired in some younger people.” Shelby Anderson, 24, came on as sales manager. Norm Loomis, 50, tightened operations as production manager. “Shelby brought a customer-friendly, business-management approach to the mix,” says Matt Todd, a specialist with the state’s Recycling Business Assistance Center in Raleigh. “Norm’s the no-nonsense guy on the yard who makes stuff happen.” With Hester as the idea man, they set out to convert ICAN into a sales-oriented manufacturer of recycled products. “We started looking at everything we could pull out of the waste stream,” Hester says. Instead of sending all wood waste, a third of what comes in, to fuel boilers, ICAN converted some of it into colored landscaping mulch. Concrete, bricks and asphalt made up 26% of waste by weight. Working with the N.C. Department of Transportation, he was able to get ICAN’s crushed concrete approved as a substitute for quarried rock on road projects and also began converting roofing shingles into paving material. It found a buyer for scrap metal. Hester was even able to convert tons of wallboard into a gypsum-based fertilizer.
In 2008, ICAN was recovering 25% of waste. By July 2009, it was recycling 53%, qualifying it for the growing number of LEED — Leadership in Energy and Environmental Design — projects. The good news? “Soon we were flooded with new projects,” Hester says. The bad? “Suddenly, it was not unusual for customers to wait two hours in line.” He remembers dump-truck drivers “ranting and raving and using four-letter words.”
ICAN’s new team tackled the root causes of the slowdown by working into the night, doubling its drivers and almost tripling employment. Numbers tell the tale: While the tonnage of material coming in for recycling has gone from 2,438 in the summer of ’09 to 4,025 this summer, the percentage of recycled waste has risen to 82%. In the first half of this year, revenue went up 25% and might reach $2.2 million this year, compared with $1.76 million last year.
“We joke that we seem to do our best work when our backs are against the wall,” Hester says. In the last two years, “we probably made all the mistakes that a person can make, and we did that going into a bad economy. But we had smart people working for us who could figure out what to do about it.”