Born Scrappy
The go-to podcast for scrap metal exporters and traders
Born Scrappy
S2E1: Mastering growth with industry legend George Adams
In this episode, I chat to George Adams. George is the CEO of SA Recycling and has been the driving force behind its incredible growth over the past 40 years, growing it from $10m to around $4b in annual revenue.
SA Recycling is currently the largest scrap metal recycling business in the US, processing over 5 million tons of recycled metal every year with about 3,100 employees across 140 locations in 16 states.
In this episode we chat about:
- A day in the life of George Adams
- Buying the right equipment
- Incentives & Bonuses
- Inventory control
- And so much more!
WHO IS STU KAGAN ANYWAYS?
25 years in the metal recycling game and still learning and growing...
I learnt from the best and worked my way up from yard labourer to Executive Director of Trading and Operations for the largest metal recycler in sub-Saharan Africa. Responsible for 4,500 employees, 85 sites, and the overall profitability of a multi-billion dollar operation.
Brought my breadth and depth of knowledge to bear and co-founded the fastest growing, most-loved, and most awarded metal recycling company in New Zealand. No small feat in a country where people are outnumbered 4:1 by sheep (spoiler alert: sheep don’t produce much metal waste).
I thought it was time that tech worked for our industry, so I took all of my experience as an operator and trader and leveraged that to build THE killer scrap app, Buddy. That's right - built for scrappies, by scrappies.
Father of two crazy-awesome boys. Husband to Lisa. Under 9 rugby coach. YPO member. Lifelong learner. Mentee. Mentor. Chief dog walker. Committed Stoic. Undefeated dance-off champion.
COME SAY HI ON LINKEDIN
https://www.linkedin.com/in/stukagan/
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Hi, I'm Stu Kagan and welcome to Born Scrappy, the podcast for scrap metal exporters and traders. Join me in conversation with some of the most experienced traders and operators that have helped shape this incredible industry. In the first episode of season two, we have a growth masterclass with George Adams. George is the owner of SA Recycling, a company he built to be one of the largest recycling companies in the world with over 140 locations. and almost 4, 000 people. George is one of the most knowledgeable guys in our industry and is truly inspiring. In today's episode, we talk about a day in the life, inventory control, buying the right equipment, incentives and bonus structures, and so much more. So let's get season two underway with the GOAT. But first, intro.
Stu Kagan:Hey George, how are you
George Adams:doing? Great, thank you. Doing really good.
Stu Kagan:Awesome, George. It's, uh, it's a Sunday morning and we've made it happen eventually, so I'm really excited. And, um, I want to thank you for joining on your Sunday morning. So, uh, yeah. You've,
George Adams:coffee's not a problem at all. Yeah, no, I'm still still drinking a little bit of coffee, but That's okay.
Stu Kagan:Um, a lot of, a lot of the listeners will have seen you speak at certain events. They might have met you, they'll all know of you. Can you just run us through what a day in the life of George Adams looked like? And that could be from, you know, having a cup of coffee in the morning, or what sort of time you wake up and all the way into how busy your day really is.
George Adams:I try, I try to get to work by six. Um, I'm usually on emails by five, you know, just because I'm awake, but I'm usually working or answering, uh, by five A.M. and, uh, try to be in the office by six or on the road by six. And, uh, I prefer to go to the yards. I hate to be in an office, but I end up having to go to an office a lot just because that's. What you gotta do. But, uh, I would much rather be out in the yards, you know, with the guys. And it depends if, you know, it depends what projects we're working on, right? If we're working on an acquisition, then that's one thing. If we're working on engineering projects,'cause I really like to be involved in engineering projects and so we build a lot of plants, we have a lot of patents on different equipment that we designed. Anyway, my preference would be, uh, to be out in the yards or working on the engineering projects, but, but if we're in the middle of an acquisition, then I also enjoy that. But those are really the things that I like to do the most. Um, you know, at this point in my life, you know, I'm gonna be sixty-eight. My son's really handle the weeds of the business, and so I can pretty much do the stuff that I think is. And, you know, we have an amazing team of people, you know, at this company we figured we got almost 3,500 employees or maybe we have a little more than 3,500 now, I guess. And so anyway, look, I have a lot of really, really amazing people that makes it, uh, makes it so I can do the stuff I wanna do. And
Stu Kagan:George, what sort of time do you get back from the office or, or the odds and do you finish at five o'clock or, oh,
George Adams:no, I. I usually get home between six and six 30. Right.
Stu Kagan:It's quite interesting because a lot of people look at it and they go, well, you've made it. You're in a position where you can go to the office at eight o'clock and, and leave at three o'clock. But it just shows that when you really enjoy what you do, um, you enjoy still getting up early in the morning and, and staying all day.
George Adams:I don't look at hours like that. You know, I don't.
Stu Kagan:Yeah. That's awesome. George. You know, I spoke about people seeing you talk and we all believe that you're right up at the top of our industry, right at the top of the game. But I'd love to know what made you, you, right? So people will see George stand up on stage and you'll, you'll give these incredible talks and really we look up to you. But what I'd love to know is, you know, it's not always easy getting to the top. People have a look at it and they aspire to it, but they think that, um, often that journey can be easy or, you know, for whatever reason you got up to the top and look at your life. But, you know, what were some of the trials and tribulations you might have gone through, um, obstacles that you've had, you know, stories like that to help people relate to your story of, of the growth that you've had.
George Adams:You know, people always ask me whether I had some grand plan and uh, and really I tell people all the time, you know, my grand plan was just to survive and make payable. My dad's goal back then was to do$20,000 a month, uh, in profit. And so, I mean, that was his goal. You know, he used to tell me all the time, Sonny, boy, if we can make$20,000 a month, we'll be making a lot of money. And so that was, and. You know, when you're a little company like that, it's all about, uh, surviving. You know, it's all about making payroll and it's all about surviving. And so we had tremendous obstacles from, you know, hazardous waste issues to, uh, in the beginning we didn't even have a shredder trying to build a shredder, trying to get permits, the city trying to get permits. A tremendous number of people helped me along the way. I just would've never made it with, without all those people. So, I mean, I think everybody that has success, um, gets there because people help them, you know, and I try to help, you know, everybody that I can. Uh, you know, people always tell me I'm too open. Think you know how we should run the business. Obviously I wrote my book, you know, which anybody can get copies of, which I really lay out my thoughts and philosophies and stuff on it. And so I'm pretty open about it just because so many people helped me. But look it, there was. A lot of people that never thought we would survive the different things that happened to us,
Stu Kagan:so, Mm-Hmm. Yeah, it's, um, it's funny, you put people on a pedestal and, um, it, it all looks like, um, Rainbows and unicorns and their life was really easy and, um, it all started as big as it is now. But, uh, you look back and, as you say,$20,000 a month.
George Adams:DTSC, which is Department of Toxic substance Control, shut our shredder down because they said that we were, um, creating hazardous waste because of PCBs. And then, uh, so then our bank panicked and our bank seized our line of credit and bounced, you know, half a million dollars worth of checks. And then the, uh, the city filed on and decided, well, if we were creating hazardous waste and we were a nuisance and they really wanted our property for a car lot, and so they pulled my use permit, filed criminal charges against me. I mean, you know, you just, you know the problems that come at you all at once. And, uh, and anyway, there's a lot of people that figured that we were gonna fold. But you know, you what, what you do, right? You really don't have a choice. You just come to work. So, and that's really what happened, right? I mean, you don't quit, you just come to work. And so all those problems we had, you know, we just came to work. So
Stu Kagan:I mean, for those that listen and are going through a hard time, I mean, um, we've just heard you explain that you nearly lost your business, right? I mean, when the bank shuts you down, it, it can get pretty hair raising.
George Adams:Yeah. Well, so, I mean, look at the bank shuts down. Pulled our line of credit, but we had a little wrecking yard and so we sold parts. And then we would take that cash and use a device scrap and, mm-Hmm. And, uh, anyway, I don't know. Yeah, it's just, you just keep going.
Stu Kagan:Yeah. No, that's awesome to hear.
George Adams:Um, you know, and then my shredder was shut down, so I know way to process the tin. So then Johnny's dad, you know, John Sacco from Sierra, Ben Sacco gave me a baler to use, a sheer baler. And anyway, just like I said, people helped me, so
Stu Kagan:yeah. That's incredible. Um, we've had John John's a great guy, and what he does for the industry is incredible. So, um, yeah. Big shout out to John as well. Um, George, has there ever been a, um, a pivotal trade experience that has offered some significant learning for you? So something, you know, on the global, um, spectrum, something has really stood out with you when you've sold material? You know,
George Adams:I, I think the biggest example that I give. When we were loading containers, we were shipping, uh, number one HMS, and I was struggling to, you know, compete or to buy against my competition. And then I went over to Taiwan and I realized that they weren't really loading HMS. What they were really loading was 10. I couldn't compete. I'm loading regular HMS because I'm shipping bulk cargoes, but you know, containers are a big part of the business. And I go over there and I'm watching these containers dump, and they're just dumping tin, you know, clean tin basically is what it was. And so, um, I mean, literally right there at that point. I called my people and um, said, look, it, stop what we're doing and stop trying to load HMS. And you know, as long as a manual stick to it doesn't have any trash in it, you can put it in the container because, you know, Taiwan actually wanted lighter scrap for the way their furnaces were. So anyway, I don't know if that exactly answers your question, but I mean, look, you. What we do. So,
Stu Kagan:but George, that's exactly it, right? I mean, one of the key things there was, the only way you found out about that was actually getting on a plane and, and going to the end users. Um. And getting involved on the other side to try and find out what is happening and why you're not necessarily able to compete. So it's something we do speak quite a bit about, which is, um, you know, get involved, go and visit the other side, especially when you're having a difficulty competing. I. It's often not rocket science. Um, it's just some edge that they have over you, which when as soon as you do some homework and find out, you find that you can actually compete with it quite comfortably. But it's actually getting out there and, and doing the work to find out, not just sitting. It's a hundred percent. You
George Adams:gotta go look, you know, when you, you think people, I, I can't tell you how many times in my life I've taught people, there's no way they're making money. There's no way they can do that. And then you come to find out they have an edge. You know, they're, they're doing it differently or they have a different way of doing it. And anyway,
Stu Kagan:so Yeah. And, and we don't know everything. Right. Um, I think we often think we do. Um, and, and sometimes as you say, you just jump on a plane, you find out, oh, how did I not see that? And, um, yeah, you can change the way you operate quickly and um, all of a sudden, you know you're competing
George Adams:again. Yep. A hundred percent. That is exactly right.
Stu Kagan:George, when it comes to, um, you have multiple amount of yards, right? Um, we were saying, I think what we said, it's about one footy. Was it more than that? I think, I think I have
George Adams:a hundred forty-three
Stu Kagan:or, right. So I would think that somebody like you, you probably monitor them quite closely, even if it's your sons that you've handed to. The monitoring of the weeds, as you say. What are the key metrics that you are looking at in these businesses and, and is it daily, weekly, monthly, you know, from inventory purchases, sales, et cetera, and how do you monitor them?
George Adams:So look, you gotta have a really, really good, uh, software system. So we use SAI to be able to do it and obviously tracking your inventory, you know, your live or die based off your inventory, what you're purchasing and, and selling. So we run an individual, uh, profit and loss. Operation that we run. You know, I don't run'em as cost centers. I run as profit on every single one. You know, tracking your inventory is crucial.'cause I think that's the easiest way to get stolen from, or, you know, for people to have fraud. And so we try to keep our inventories as low as possible. I don't ever try to play the market and so I try to, we do the best job we can, estimating what we're gonna buy each month, and then I sell a hundred percent of whatever I. We don't, I don't. Whatever our sale price is gonna be, we try to buy against that. And, you know, I believe you make your money on the buy, you don't make it on the sale. And so, uh, we focus really hard on trying to keep your inventories as low as possible. We track inventory religiously, I mean, literally every single day. And, you know, I get a, a list of all the yards and they're just color coded with red to green, you know, on uh, where they in inventories. And we kind of have a metric where we. If you buy a thousand tons of HMS a month in a yard, then we say you can have a hundred tons of inventory at the end of the month. And if you buy, you know, 250,000 pounds of non-ferrous at a yard, then you can have 125,000 pounds of non-ferrous. In other words, 50% of non-ferrous, 10% of ferrous. And that's kind of the metric. Anybody that. Is over. That metric is just, it's color coded, so if you're way over the metric, it'll be bright red. And if it's, you know, only a little over you, you know, might be pink or white, and then it goes to green and then shades of green, you know, as it's going down on, on where it needs to be. And so it just makes it. Quicker. We, we, you know, when you got 140 yards, you can't be looking at all 140 yards and the ones that are good, there's no reason to look at, and so you kind of hit the ones that are top. You watch what's going on in the inventory. It's much harder to get in trouble if you, if you have no scrap in your yard. And so, and we project out. If you take, if you take the average of your three months expenses and if you take what you buy and sell every single day. Then by the 15th of the month, you can project pretty good what's going on for the month. So in other words, just the difference between what you bought and sold. Um, you can project out to the end of the month and then if you take the average of your expenses by, you know, halfway through the month, or certainly by the 20th, the month, you've got a pretty good idea whether a yard's gonna make money or not. Yard that is not projecting to make money, then you're working on it before the end of the month, 10, 15 days after the. Yeah,
Stu Kagan:that's, um, I, I mean, what you've just said there is absolute gold. There's a few things there I just want to touch on. One was, I guess, calculating what your profit or losses look like in, in the month, not afterwards. I mean, that is hugely important. It's something I was taught for a very long time, that after the fact means absolutely nothing. You're just counting then. Right. You're just counting the money, the losses, all the, all the profits. But you can actually have an impact if you get to the twenty-third of the month and you know which yards of yours are going to do poorly, you can focus your time, your energy, your team's time and energy to go and make sure that they can actually, um, fix it before it's too late. And whether that means clearing stock, reducing expenses, buying more, or buying at better prices, whatever it could be, um, that's absolutely vital. You do it within the month. But then the other thing you touched on is something that we've had a lot of conversations around of Worn Scrappy, which is do you buy against the sale? Or vice versa. Now, I come from a, a large scrap company in, in, um, Southern Africa where we always bought against a sale, which is exactly what you've just said. I've had a lot of people tell me that, um, they might sell in the middle of the month and average it out. Um, they can't really sell up front because they don't know what they're going to buy, um, et cetera, et cetera. But George, you're saying 100% the best way to stay alive in business is to, um, buy against a sale. Well,
George Adams:I mean, look, some people are really smart and you know, they're really good at trading and they can take positions, uh, and, you know, they'll play the market. And I, I'm not a trader, I. So I'm much more an operations guy, and let alone the fact that you figure we're buying, you know, 70 million pounds of non-ferrous a month, and we're buying half a million tons, right? Between 400 and 500,000 tons of ferrous crap every month. And so if you don't sell it. Then the next month, you know, if you didn't sell one month, right? Well, the next month you got 800,000 tons to sell. But if even only sold 50,000 tons, well then the next month you got six or 700,000 tons to sell and you never get, you never get caught up. And so we do the best job we can at estimating. Of what we're gonna buy, and then we try to sell it. It's obviously, it's never perfect, but you know, you, you, you can get pretty close and, and we try to shift all that scrap. And so now obviously when you're talking about an export yard. Uh, you know, like at my docs then if you've got ships coming in and you're loading a 40, 50,000 ton ship, you might have, you can't plan it that way'cause ships come in when they wanna come in, but your yards that are truck or rail shipments, you know, you can get'em down to the ground pretty. Pretty often, and that's what we try to do. We try to shred to the ground every month. We try to shift to the ground every month. And, uh, and I try to sell everything that I buy. And, and I believe that you make your money on the buy. And so, uh, you know what you're selling for and you project your price. Now, you know, like container sales. Container sales, we sell every week. Um, that's just kind of the way the container market works. I'm talking about Ferris container sales, and so our markets where I'm big container sales and we're selling every week, then, you know, we're estimating what we're gonna buy that week and we're adjusting the price. Whereas in domestic sales, you make your sale at the beginning of the month and then we work hard against it, you know, all month.
Stu Kagan:Just one thing out of interest for me, George, is when you have all these yards, how do you do inventory and stock take, you know, you mentioned fraud earlier. Um, when you're dispersed across such a big region, how do you guys, um, physically do that?
George Adams:So obviously we're tracking what we're buying and selling, right? So we have a virtual running inventory and then you do production runs, you know, for the shredders and wire choppers and things like that where you have to transfer the stuff. So you do production runs and then you do a physical inventory at the end of the month. So our smaller yards will do physical inventory every single month. And our larger yards, we'll do a physical inventory every quarter and uh, and we'll literally weigh every single thing in the yard.
Stu Kagan:And is it the managers doing their own stock tech? And the reason why I ask that is, no, no, no. It's Southern Africa. I swap my managers around.
George Adams:Yeah, a hundred percent. Exactly what you have to do. I mean, your manager obviously is doing the inventory, but you have to bring in a guy from another yard or two people from other yards to, you know, to work with them
Stu Kagan:to do it. Yeah, I don't think everybody necessarily knows, um, what the reason is for that. So I'll just touch on that briefly. But, um, you know, if a manager, if there's any sort of issue with a manager and there could be some fraudulent tickets or whatever there is that's been happening. If he's marking his own homework, I. Um, it's easy for him to just estimate a bit higher the stock on the floor than there actually is. Um, I used to usually have three people doing a stock take and then using the average of that. So if there is one manager there, it's quite difficult for them to, um, obviously change that stock, um, from what it is actually sitting on the
George Adams:floor. Yeah, we do exactly the same thing as possible. I try to ship. Uh, keeping low inventories, uh, you know, because all, all of my companies, the, the managers are on a bonus program and so, and they get zero credit for inventory and so it puts tremendous incentive for us to ship to the ground. Hmm,
Stu Kagan:absolutely. That's very clever. Talking about, um, you know, some of your key people, how do you handle key man risk? I mean, in a company like yours, you must have people trying to hire your managers, um, every day. So, what sort of processes do you have them on or systems do you have your team on, and how do you look after your best guys? So
George Adams:we, we do our bonus every single month. You know, I believe that companies that do it once a year, I just don't think it's an effective, so, uh, you know, we calculate our profits every single month and we pay a bonus based on profits. People have all types of complicated, you know, returns, rocky return on assets. I don't know, I've never been smart enough to figure all that stuff out, you know, figuring out a return on invested capital and all this crap. And I figured if I'm not smart enough to figure it out, then my people aren't gonna be smart enough to figure it out. And so, you know, I just try to keep it really simple. We give a percentage of the profits, I do an individual financial statement in every single yard. And, you know, I pay a percentage of profits off that financial statement, and I pay it every single month by the third pay period. And so that way everybody can, you know, look at it and, you know, if they had a great month, then they see their money right away. Do they,
Stu Kagan:does everybody get, uh, a bonus based on their individual role? Or is it a communal pot?
George Adams:So the manager, the manager gets a bonus. And then, um, the, you know, based on a percentage of their profits and then the employees in the yard split the bonus. And so it's just, it's based on shares. And so, which are really more arbitrary, but you know, let's just say that the bonus to be split between the guys is$5,000. You take, let's say that the tractor operator might get 10 shares. The, uh, foreman gets 20 shares. The scale person is 15 or eight. You know, the sweeper might get five. And let's just say you add all those up, right? And it's a hundred shares. Um, and so it just means every 10 shares, right? It's worth five. And so how many shares you have, that's bonus And.
Stu Kagan:And do you find, because you run yard by yard, they all get their own boat. Is there any competition within SA Recycling that people are poaching each other's customers? I. Yeah, it's
George Adams:a huge problem. I mean, that's why you gotta have a regional manager. So you have a manager Overseas the yard, and then you have a regional manager, which is really the principal, right? To make sure that because, and the regional manager is also making a percentage of the profits of all the yards. So he or she has tremendous incentive to not. To make sure that doesn't happen. But look, it, it, it is not a perfect system because when people are incentivize, you get some people that are more aggressive than others and they poach. It's a pain in the ass. So, but look, it, no system is perfect, just like our country here. United States is great as it is. It's not perfect. And, uh, but I still feel we've looked at a lot of different things. I still feel the incentive program is the best way to go because I need people to hunt. You know, I mean, that's the bottom line. I don't want farmers, I need hunters. I need people to get out there and.
Stu Kagan:Yeah, I think I only said it'cause I considered so many of these different business structures and bonus structures and everything has its flaws. So you're quite right. There's no perfect system out there. Absolutely not. Um, I've spoken to many people that don't have a perfect system. Everyone is flawed in some way, but I guess it's just choosing your own poison, right? And knowing how to manage that and knowing what to look out for. And it makes sense by having a regional manager because that regional manager doesn't want people competing in their region because that's affecting their overall margin. So they didn't have to manage that and that's their issue. Yeah, exactly. That's great. George, in the growth of your company there, you know you spoke about bank kind of pulling their um, facility at a stage. How have you handled, um, your capital growth? So how have you handled, what sort of strategy have you had? Um, do you recommend people, um, sell equity in their business and bring in, take loans out? You know, what sort of things have you done in the past? Because in order to grow, we need to have funds, we need to have some form of capital, whether it's buying equipment, buying more stock, and waiting to get paid, uh, at a later stage to get a premium and to compete. You know, all of these sort of things. What have you used and what do
George Adams:you recommend? Well, so I mean, look at it. If you taking in an equity investor is obviously really expensive capital, and you hear all the horror stories of what happened to different people that, uh, you know, go broke doing that. I mean, the minute you sell a piece of your business, right, then the question is, you know, who's got control? Do they have control? Do you have control? And every time you lose control, that's when people get into trouble. I think your cleanest way is just to borrow money. Um, and not, you know, try to sell equity in your business. I just feel like that's the safest and obviously, but you really gotta watch your loan covenants and make sure that you're, you know, living within your means on, and people get into trouble. But, uh, but I, I feel like, you know, the, especially the bigger companies that, you know, took equity investors in there and tried to go public and stuff, and a lot of those people have lost control, so.
Stu Kagan:Yeah. Especially when you're going public. Absolutely. I think, um, when you borrow money, um, and you take a loan from the bank, as long as what you're using it for is gonna have a decent return, you should be okay. Right? So if you're buying it for a shredder and you already have the volume coming in and you're selling it to, you know, then it can make sense. But it's that risk. It's that risk of going with a bank who can pull its facility for whatever reason. Which, which, you know, similar to what we were speaking about earlier about bonuses, um, uh, there's no perfect science. It's what's gonna work best for you. Um, talking about using capital, what is the best or worst equipment purchase you've ever made and why? Now, I, this isn't the name and shame, so I don't necessarily want you to say The worst was this, and this was the brand. It's more about, you know, the story that, that had an impact on you. It could be the best or worst.
George Adams:Well, I mean, look at us going to putting a mega shredder in in California. You know, we put the first mega shredder in California. We bought it from Scott Newell, you know, from uh, the shredder company. And you know, certainly that's hands down the best. Investment we ever did. You know, the first one we did, you know, at that time we had an old, we had an old hammer mill, which I actually also bought from Scott when he'd sold a new one. We had an old hammer mill and uh, but we couldn't do the tons through it. You know, it was only a 74 inch mill and we put in a 6,000 horsepower, you know, 124 inch mill, or 26 inch mill. I can't remember now. Which allowed us, you know, to do volumes. And you know, we thought at the time w would take us three years and we could get to 30,000 tons. And uh, the market started running. This was 2004, the market started running and we hit 50,000 tons like in three months, you know, hands down. Wow. But that's just pure dumb luck, you know, that we hit the market the right way, but obviously we took the risk to put the shredder in. But that's the best. Acquisition or the best, you know, purchase we ever did. We were making as much money in one month as we'd made in the prior, you know, 10 years. So it was, wow. It was an incredible time. So, and we used that money to expand. I mean, that's why we grew so fast back there. So we used that money to expand, buy more yards, put another mega shredder in Bakersfield and to.
Stu Kagan:Um, so I mean, that changed your trajectory completely. That must have had a huge, huge impact. It's quite interesting, right? You say, you say it was dumb luck, but you've gotta be in it to win it. And if you hadn't taken that chance and you hadn't bought that shredder, um, you wouldn't be necessarily where you are now.
George Adams:I, I, again, I believe you make your own luck. You know, I, I truly believe that, and I say that in my book, but, um, you know, I believe you have to put yourself out there. I mean, firstly, you have to decide. And so, you know, so we decided to take, like, just on that shredder, we thought it was gonna take us three years, you know, to be able to build the volume up and the market started, run. Now we could have never planned, the market was gonna run, but obviously we had to take the risk. And so, but certainly it was luck on our part that, you know, concurrence of events to make that. Uh, to make the world just go crazy. I mean, and they went crazy. I mean, it was, it was unbelievable. I, I'd never done so much business in my life as I was doing right then
Stu Kagan:I think, um, almost every episode in season one had a trader who's been doing this for 30 or 40 years, talk about the build up to 2008 and how you literally couldn't lose money.
George Adams:Yeah, exactly. It was un it was just unbelievable. And that's what it.
Stu Kagan:Yeah. Yeah. Um, so buying your equipment, what's your process to decide if you need something and then after that, what you're going to buy? Well,
George Adams:look, if we're, if, you know, we can, if we can get a return, really, we'd like to see a return in a year, but if we can get a return in two years, you know, we're gonna go out when piece of equipment process. You know, we know what we like. And, uh, and so when we're buying equipment, look at, I like cat equipment. You know, I, I think Scott makes a great shredder, but I'm gonna buy a shredder. I mean, if I was gonna build him from scratch, I'm gonna get it from Scott. If I'm gonna run a skid steer, I'm gonna do a cat skid steer. I mean, there's just, you know, different stuff that, you know, we believe is the best equipment out there. So. Okay, so you've
Stu Kagan:already pretty much made your mind up on what the right equipment is that comes with experience. So if, if somebody comes to you and says, you know, I wanna run a different piece of equipment, um, and they'd have to pitch that to you, are you, are you listening to it? Or, or you've made up your mind.
George Adams:No, no. Look at, we'll, we'll obviously listen, and as I said a second ago, I really like cats, right? But when I was in Italy, you know, the same company that makes John's, um, uh, shears the Sierra shears, you know, they make a small crane that you can drive around without putting the outriggers down. And uh, I really want to try one of those, you know, so look at, if I see something that's different, you know, I'll try it. Johnny's gonna bring one over for me, and I'm gonna try it. But, uh, uh, or maybe he's already got it here anyway. I'm supposed to get one to try. But I, I think, you know, certainly you see different stuff that makes sense and that you try it. But, um, and you know, because I buy so many yards, lots of times they come with other equipment. And so, uh. So, I mean, I end up with a lot of Senate, bogans. I end up with a lot of the beers, and it's not that they're not good equipment, it's just I have more cats and so it's easier for me to stock parts. Gotcha.
Stu Kagan:Yeah, it makes sense actually, when you're acquiring all these businesses, you've tried most of the pieces of equipment because I
George Adams:getting it all the time, you know, I have every imaginable type of crane, I'm sure. Piece of equipment, wire, chopper, you name it, I got so,
Stu Kagan:yeah. Yeah. With when it comes to culture, I see a lot on, you know, social media posting by SA Recycling. Um, your team seems to really, um, you know, bleed for you guys. What is it that you think sets SA Recycling apart, um, that has such a cohesive team and culture?
George Adams:Well, look it, we empower our people. I tell people all the time, look, you. If you disagree with me, just tell me. Right. It's okay to tell me no. And you know, and I try to read the body language on it, you know, if, especially if it's a new person, you know, they're thinking, okay, there's no way I'm telling this guy no, you know, he's the owner of the company. I'm not gonna tell him no. But if you see that body language, then I try to drag it out of him. And you know, because it, the last thing I need is for someone to yes me, right? The last thing I need is for someone you know, they know what I'm proposing isn't gonna make sense and you know, for us to head off the wrong direction. But you know, the people that worked me for a really long time, they have no problem telling me no. Okay? As a matter of fact, they don't even think twice about it. You know, everybody speaks up. This is not a dictatorship. You know, I, I believe that, uh, you know, the success of my company is a hundred percent because of the people. That's a not because of me. People ask me all the time, well, why don't, you know, come up partners with me here. Why don't you do this? You know, why don't you do this deal on your own? And it. The thing that makes SA Recycling so great is because of the people. It is not because of me. And so, you know, you, you look at yourself. I, I'm just the conductor, but the people playing the instruments, I mean, they're the ones that are making the music, right? It is not me. I feel like the thing that makes our company so strong is because everybody feels very competent in speaking up. Just saying, no, that's bullshit. That's not gonna work. Okay. I don't like it. No, I don't think we should do it. And you know, Phil, really confident in, in speaking up. Yeah, I think that's,
Stu Kagan:I think that's vital George. I think it's brilliant. Um, and it comes across, anybody I speak to from within the company absolutely loves it. So it makes sense to hear that from the. When you are acquiring businesses, which you've done a lot of, in fact probably more than anybody else in our industry, what do you look for straight away? And I realize they're all different, but what are the kind of things that, um, makes you think, you know, if somebody says, oh, there's a business for sale and it has this, this, and this, and if you hear that immediately you think I'm interested, you know, what are those points that
George Adams:you look for? Well look, if you ask my family, they'll say, I've never met a scrapyard I didn't like. But um, I mean, it's a standard joke, but really look it strategically, you know, we try to look at what is going to affect us. You know, if I already own a shredder or two in an area, if I can take out another shredder that's may be competing against me or costing me money, you know, a competitor that's costing. In my opinion, they're overpaying. Look at every, every scrap dealer always thinks the other guy is overpaying. But you know, if I think someone is overpaying in a market and they're costing me money, and if I can buy that company and uh, uh, and bring market share more in line, well then obviously. You know, it would, that, that's completely would be good. Or if it's a new region, you know, when we had the opportunity to buy new recycling in Georgia, you know, that fit our model perfectly, that shredders, that beater yards, you know, we liked that hub and spoke concept. And so, um, you know, it was a great, you know, it was, it was an old time family business. They had great people, uh, you know, great employees. You know, it was an ideal company for us to buy. And so I, I try to look at fill-ins, you know, if we can own more scrap in a region, then I think that makes sense. Or if we're going into region, if it's got multiple yards, you know, that you can. Uh, a hub and a spoke. When we bought, uh, we bought Tennessee Valley Recycling from Joel Dembo, you know, they had the shredder and they had multiple feeder yards, and it was, that's our kind of business that we like to buy. You know, you've got a, you've got a shredder, you've got yards feeding it, and that's, that fits our model really well.
Stu Kagan:And is there any, um, other expansion outside of the US plant?
George Adams:No, I. Uh, people ask me all the time, you know, do I want to, do I wanna go outside of the country? I, I feel like there's plenty of scrap yards to buy in the us. I don't think I need to go anywhere else. It doesn't mean I wouldn't if there was some incredible opportunity that, you know, fit our model of having a spoke that you just couldn't pass up. But, um. It is not my plan. I don't know the laws in the other countries. I think the US, in spite of all its trials and tribulations, is still the greatest country in the world. And um, and I feel like there's unlimited opportunity for us to grow in this market. And for me to go someplace else, I feel like just takes away my ability to grow in this market.
Stu Kagan:Okay. Got you. Um, George, in season two, we are going to, um, we'll follow our normal ending, but before we do, I just wanted to ask you, um, is there anybody that you would like or you think we should interview on Born Scrappy? So who would you like to see up next?
George Adams:Oh boy. I don't know. I mean, have, did you already interview John Sacco? I just feel like that guy knows everybody.
Stu Kagan:Did you already interviewed John? Yeah. John. We've had John on absolutely. He's fantastic.
George Adams:Okay. Yes. You already interviewed John. Um, how about Jay Rabinowitz from Walter
Stu Kagan:deal? He'll be, he'll be next on the list.
George Adams:Yeah. Look at Jay's a great guy and you grew in the business like I. And, you know, he's, he was with Snitzer, now he's with Alter. And Alter is an amazing company and uh, it's, uh, I think Jay would be great.
Stu Kagan:Mm. We've had Michael. I'm good friends with Michael. Um, Goldstein. Sure. So, um, I'll, I'll chat to Michael and, uh, get him to set up Jay and I'll get a, get his contact and I'll, I'll reach out to Jay and have him on for sure.
George Adams:I, I mean the stories Jay tells about his family business growing up, they're just hysterical, so. Right. That's
Stu Kagan:awesome. Um, George, before we end, we just like to get to know our guests a little bit better, so it's a quick fire. Last few questions. Have you got a, a favorite TV series or movie?
George Adams:I don't watch tv. tv, I mean, not even five minutes a month. And so, um, I mean, we do go to movies once in a while. I certainly like, you know, the James Bond movies, mission Impossible, you know, like those kind of movies. I don't like horror movies. I don't ever watch that kind of generally. I hate that crap. Yeah. Same here. You know, I certainly like action movies. I, I don't go to a lot of movies. I maybe see a couple a year, but, and
Stu Kagan:I don't have to watch tv. We'll put you down as a James Bond fan, no permit to really well, and, um, favorite place to visit. You must have been to heaps of places around the world. What's your favorite place to visit?
George Adams:You know, I love Tahiti. Um, we certainly love Italy a lot. Uh, I think they would be, you know, our top two. I say we, I'm talking about me and my wife and, and my family. But, uh, you know, we, we spent my 40th birthday, 50th birthday, 60th birthday, um, in Tahiti and. And we brought all the whole family there. And so I assume when I turned 70 here in a couple years, which I find it hard to believe that's possible, but uh, when I turned 70 here in a couple years, I assume we'll probably go back, you know, to Tahiti again. But, but we love Italy, um, and uh, we spent a lot of time in Italy too,
Stu Kagan:so. Okay. And I know you don't watch a lot of tv. Do you read any, do you read a lot of books?
George Adams:So when I was younger, I mean, I read, I just read voraciously, but now pretty much, you know, between emails and trying to keep up with the news or whatever, I, I feel like I can never get, I can never cut up as it is. My assistant reads all my emails and tries to delete everything, you know, because they all show up on her phone and on her computer. And so it takes, it's a couple people trying to keep up with my emails, uh, as it's, and anyway, so I don't really read too much anymore. But, uh, I, I'm hoping one of these happen again.
Stu Kagan:To end off with, have you got a favorite quote you sometimes use?
George Adams:So this is like, maybe it's not exactly a quote, but we, we joke, you know, in, uh, as we were building the business that my brother used to have on his wall, he used to say we, the unwilling him and, and my brothers led by the unqualified me now attempt to do the impossible with nothing. Right? Because, you know, we would build all this equipment outta nothing. We built it out of scrap and he never had budget. Uh,
Stu Kagan:I.
George Adams:My favorite, my favorite, uh, quote to my wife is, the only lie I ever told you was that I liked you when I already knew I loved you. And so I tell, uh, I tell my wife that one all the time. Yeah, I saw that on a wall. I saw that on a wall in Cleveland. And, um, anyway, it's at, it's a restaurant called Johnny's, and it's on the wall. And it's, the only lie I ever told you was that I liked you and I already know I loved you. I love, I love that quote. That is brilliant.
Stu Kagan:And, um, I don't think people came to Bourne Scrappy thinking that those were the quotes that were gonna get. And, and I don't think I thought that was gonna come from George Adams, but we'll take that for sure.
George Adams:Yeah, yeah, yeah. I know, I know. There's one. Which I really like. It's, which is to accomplish great things we must not only act, but also dream. Not only plan, but also believe. And so anyway, I love that quote and I start out my book with it and um, and the guy who wrote that quote, it's. I credit my book, book. I can never remember the guy's name, but, and I've always loved this quote because, um, so many people dream and don't act and so many people act but don't ever dream of the things they can do. So it's always been one of my favorite quotes, but, uh. You gotta plan and you gotta believe, you know, you gotta believe in yourself. You gotta believe that you can do it. You know, so many people, I feel like they don't know how to get there, and so they just don't take the first step. And I try to tell'em all the time, it doesn't matter. You don't have to figure it all out ahead of time. You don't have to know how you're gonna get there. Just start down the path and figure it out. And you know, you look at, I always use the the point out, like you look at the people that settled this country, the U.S that started from the east to work their way west. They had no idea what they were gonna get and what they were gonna hit and how they were gonna cross the rivers and how they're gonna cross the mountains. They just figured it out and you know, so often I just feel like, you know, you start down a path and you figure it out. And you don't have to. So, so many people don't start because they can't figure how to get to here. And so they don't start. And uh, you know, for me, I have a direction where I want to go and I just head that direction and I figure I'll figure it out. And so,
Stu Kagan:um. I think it's Reid Hoffman, um, the founder of LinkedIn says, um, you should jump off the cliff and build an airplane on the way down.
George Adams:Exactly. Yeah. Well, maybe that's a little extreme, but it, you know, it's
Stu Kagan:funny, right? Because. It's that first step that everybody's so scared of because they don't know what's gonna happen next. But it's funny, when you do jump off the cliff, you're very much incentivize to build that airplane very quickly. Um, instead of having that fear of not going at all. Yeah,
George Adams:yeah. Look it, you just start, start down the road and that's just what I do, you know? Yeah. I believe you gotta dream where you want to go, and then you gotta act on it.
Stu Kagan:Yeah, it's a brilliant quote and it's a great way to finish up. So George, um, I really appreciate on a Sunday you finding the time to come and hang out with me, um, and to give our listeners, um, so much brilliant gold and gems that you've given us today. So thank you so much and have a great day. All right, you got
George Adams:it.
