S2E10: Tricks of the trade with Coremet's Jim Skipsey

In today's episode, I'm joined by Jim Skipsey.

Jim is the Senior Vice President of Cormet Trading and was previously with CMC and the Commercial Director at Alpert and Alpert.

In today’s episode we talk about:

• How to find out who the legitimate players are
• The biggest bull market we’ve ever seen
• Why scrap will always find its way
• The kiss of death in this game
• Why having patience is key
• 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.

I 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/

Transcript

0:00

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 today's episode, I chat with Jim Skipsey. Jim is the Senior Vice President of Cormet Trading and was previously with CMC and the Commercial Director at Alpert and Alpert. So let's hear from Jim. But first, intro. Hey, Jim, how are you? How are you? Yeah, I'm very good. Thanks, man. I'm excited to have you on Born Scrappy. Thank you. So, uh, welcome. Thank you. Thanks for having me. Pleasure. Jim, tell us a little bit how you found yourself in the metal recycling trading industry. Well, I guess it probably started. Well, no, it definitely started. Um, uh, straight out of college, uh, in Dallas commercial metals company in their Dallas trading division. They were looking for, for new traders to kind of help develop their South American business. And because I was born and raised in Mexico, grew up in Mexico, speaking Spanish, you know, it was interesting to them. So, and for me, I was always interested in the international business. So I went to work for them, um, which was great. I mean, it was a great introduction to the industry because, you know, CMC is, is one of the best companies in the world in this industry. And, and they spent a lot of time and energy in training us, um, you know, for the first six months we would spend, six weeks in their scrap processing yard, then another six weeks in their steel mill, then another six weeks in their traffic department. So we really got a well rounded. Introduction to the industry and and then I went on to basically work for their Dallas trading division and the aluminum side where. We were marketing and trading. Aluminum semi finished products, um, throughout Latin America. And that's also when we kind of, or I got a little bit of exposure into the scrap side. Because, you know, when we were down there selling coils or selling semi finished products, you know, we would come across. Whether it was class scrap or whether it was other types of scrap. Um, and it really was fascinating for me because. I just loved everything about the scrap site. you know, the people were, you know, very interesting. And so I started focusing a little bit more time on that side of the business where I was buying mixed containers from Central America and bringing them into. CMC scrapyards in Florida or in Texas and whatever else. So that was kind of my first taste of the scrap side and it was great. I loved it. Um, then, in 1999, I got an opportunity to transfer to their New York office, their Coal Metals Division, where they focus more on trading and distributing minerals, ferroalloys, and break bulk shipments. So. That kind of opened my eyes into a totally different part of the business, which was, you know, they got into chartering vessels and selling various different products from China into either aluminum manufacturers or the chemical industry. And it was fantastic. It was great. Then I would say in early 2000s, right? Right at the start of the dot com boom. I got an opportunity to join a startup company that was dedicated to our industry and they wanted to be the first, uh, to the market B2B, you know, basically it was a platform for trading and even though the name was aluminium. com, they were focusing on all types of products, whether it was copper, semi finished products, and, It was an amazing experience. I got to really be part of a startup company that was very well funded. Um, you know, part of that, that big dot com boom, which was very exciting. it brought a whole new level of perspective to the industry and it really opened up the doors to all types of customers to suppliers because we were, 1 of the 1st to the industry. we had close to 2000, companies registered and everybody at that time was very interested in learning, you know, what's it all about? not necessarily looking to do to jump on the platform, but more just trying to understand. You know, what direction this, this industry was going. So it really kind of introduced me to a lot of different people in the business, whether it was on the consumer side. In the U. S. Especially because I didn't have a lot of experience with the consumers in the U. S. It was more of the international side. But, uh, and then I also met tons of suppliers all over the world that were interested in learning how to either market their metal online or or meet consumers. And it was just great. It was now at the same time, you know, people were very skeptical. You know, naturally, especially in our industry where. on the scrap side and family owned businesses, they want to kind of keep things, you know, confidential. And at that time, people were very nervous about the information on the Internet, you know, what to put out there. Whether it was, I mean, I'm speculating, but whether, you know, tax purposes or whatever it is, they just didn't want to publish a lot of information and they didn't have a lot of trust in it. So the tech, I mean, we're talking over 20 years ago, right? Technology technology was, was incredible. I mean, it was literally, you could transact online. you know, with people all over the world. Um, so the technology side was great. There was just It took a lot to really kind of get people motivated to to transact online. So unfortunately it didn't last. Um, so in early two thousands, it kind of went under and then nine 11 hit. So, I basically had to leave New York just cause it was not a good time to be there. So I moved back to California where my parents are and I took a year off from the business. I worked with my dad in the restaurant bar business, which he's been in for his whole career. Um, To find out that that's not a business that I would necessarily want to be in. So I eventually wanted to get back into the international trading business. And so while I was in California, you know, I had to look at it. Obviously all of the companies in California and in Los Angeles and came across Alpert and Alpert, which is one of the biggest companies in LA, especially for the non ferrous. So I started at Alpert. Um, they brought me on to Expand their trading into Latin America. So it was kind of a natural fit for me. And they were great about opening up opportunities for me to go explore throughout South America, Central America, and it opened up great business opportunities. it was fantastic. So for many years, I developed a lot of relationships with suppliers throughout Latin America, and then expanded into the Middle East and then into Africa. And it was fantastic. I mean that, you know, I don't have to tell people on the business, but, you know, from 2002 or 2004 to 2008, it's biggest bull market we've ever seen. So, you know, it was hard not to necessarily make money. In that time, because it just seemed like prices kind of went up every day. So it was a teaser in a way, because it just seemed like business was so easy back then, because also things were happening that hadn't happened before. I mean, you look at the Ferris prices, when they started jumping up so much that all of a sudden. you could put steel scrap in containers and, you know, the margins for that at the time we were making as much as the aluminums, you know, 50 bucks a ton. And it was just incredible. And you're talking about thousands of tons per month from small countries like Panama or from Nicaragua or, you know, from El Salvador. And it was just, it was just an amazing time. So, uh, after a couple years trading at Alpert, I was promoted to the director of purchasing and I oversaw all of the buyers and the way we had it structured was we had traders that were dedicated to certain parts of whether it was the United States or certain parts of the world. and then eventually I became the commercial director where I oversaw all the commercial activities for Albert, which was their big trading business and their scrap facilities in California and their overseas offices. So, basically, in 2000, 2010, we grew that business to a very significant. player in the industry. So then came around 2018, I just saw it at the time and opportunity to kind of go on my own. Uh, so what I did was, I talked to Michael Deal, who is my partner. He oversaw the copper business at Alpert. And we just thought it was a good opportunity or good timing to go explore the things. So we reached out to Cormet in New York. And the reason we reached out to them was because Cormet is an interesting story. they are a group of traders that came from Philip Brothers in the 80s, early 90s and started their own business. And they fly under the radar. They are very smart. and I would come across their name in the most random places. So, you know, I would hear their name and in places like Morocco or Saudi Arabia and through the most random small suppliers that I didn't have necessarily an international reach. So I was always kind of curious how. This company in New York City, you know, that wasn't one of the big trading companies or big names was able to kind of get into these small niche markets. and we knew that that's the kind of business that we need to be with because they do a lot of the same things that we were doing. You know, it was a lot of foreign. Purchasing from the developing world, and where the risks are a little bit higher, but we knew that they understood what it took to do the business there. You know, with the payment terms that are required with the risks that are required in some of these places. So we felt it was a good fit. And when we reached out to them. You couldn't pick two more different Set of people when you talk about michael and i in los angeles and these three gentlemen You know in their 60s that are looking more towards retirement Uh in new york but yet, you know when we start talking business and talking scrap It's just amazing how we're dealing with the same stuff Which was kind of funny because when we went to interview with the bank they were kind of seeing the same thing where, wait, wait, how is it that, you know, you two Catholic boys in Los Angeles and these three, you know, older generation Jewish traders, how is it possible that this is a good match? But, you know, at the end of the day, when it comes to talking about scrap, it was literally like the perfect marriage and it was a perfect setup. So, It really has been a great experience working with these guys, you know, they have many years of experience and they're just really great guys and it's been a pleasure and so naturally over time, the idea is that these guys will retire and Michael and I, and we brought another gentleman from Alford, uh, Andy Davis, who oversaw the nickel and high temp business there. And he's basically become an expert in that field. And he's now working with us out of Houston and he's growing that business in a great way. So that's a long story, but that's kind of, yeah, but it's good to, it's good to kind of get the background, understand, um, the experience that you have, because when we delve into some of these questions, it's nice to know that we're getting it from somebody who's, who's been through quite a lot, especially working in the regions that you have. Right. It's quite easy to just go, I mean, it's not easy, but let's say for the, for the bigger name traders to hit up your regular supply, um, we can name a whole heap of them in the States and in different countries, easy to do business with them, you know, they're going to supply the right quality. You know, the payment terms will be okay. Everything will be fine. When you start going into those regions, you must have had some, some, Tough experiences. So maybe you can talk me through what's been a really tough experience for you and what you learned from that. So, yeah, I mean, you know, when you're traveling to places, you know, countries in Central South America or in Africa or in the Middle East. You know, they each have their own dynamics and their own risks. Um, but, you know, what I love about the business and what's attracted me to really to stay in it and to grow in it is the people that you meet and the characters that you meet and, you know, when you're talking about the scrap industry. it's down to the pure people of whatever country it is, you know, you really, you get to know the culture through the scrap, you know, suppliers, you know, it's amazing because it's not the most sophisticated industry. Um, And there are parts where, you know, there's a lot of growth and stuff to be done, but the people that you meet, they're genuine people and that's part of the one that I love now at the same time, you know, our business, unfortunately, when you're talking about a commodity that can have various values, you know, from, Even within, say, copper, the values can be dramatic in the different products that we trade. There is a risk of attracting, you know, how do I say this in the right way? When you're looking at an exporting company that's bringing in dollars, you know, there's a lot of potential risks in people that want to associate with you, to basically, you know, Wash their money and things like that. So, you know, we've had issues where we have to make sure that we're not dealing with people that are laundering money for cartels or whatever it is. Um, so it is important to go down and meet with the people and see that they're for real and they're investing money into the industry. They've got equipment and, they're dedicated to the industry. Now, with that said. You know, you can't always get it right. So, you know, we've had some instances where, they didn't end up being the most legitimate operators. And luckily, my experiences in losses haven't been over the top. But, yes, I've come across people, and those are the situations that you never really forget. So you really want to learn who you're doing business with and make sure that they're legitimate and obviously the people that have been in the business for a long time. Multi generation business. Those are the ones that are dedicated to the business and they're not going to, you know, steer off to these sketchier types of operations. Yeah, so I mean, in the regions you're talking about, it's a no brainer that you have to go and visit, right? I mean, I can only imagine if you get there and they don't have any equipment, but they're offering you a whole lot of material, shredded material, even as an example, that's something that you would identify very quickly. Have you ever had an experience where you've gone there and gone? I don't think we should be doing business with these guys. Or is it like a 99 percent hit rate that when you go? No, you know, before you could really. Find all these companies, that are exporters, you know, yes, I had to look in the yellow pages and reach out to, departments of commerce to see, export records and to see at least some names. But it's amazing, you know, when you're on the ground in a specific market. How much people talk and you can quickly find out who the legitimate players are. So, yeah, it's critical to be there on the ground and learn from these people. And, and, you know, within a couple of days, you're going to know who the players are. Um, now it doesn't necessarily mean that they're running a legitimate operation, but you know who the big movers are that are loading containers and whatever else. But. As far as equipment, yes, people that have equipment. that's a big telling story. But like, you know, in Africa, I mean, you would know the farther you go north, there's, it's just four walls. It's not really, there's not equipment necessarily, you know, they're loading containers loose. You know, manually, so, um, you know, those are the ones that you have to be, a little bit more careful on because they can shut down their operation in 2 seconds. But, you know, some of these countries, that's just the way it is. You know, they don't necessarily look to. At least not at this point, package their material, they're just loading containers loose, whether it's with copper, whether it's with different aluminum products, stainless, whatever else. So, but you do want to sit with them and you want to look at them in the eye and you want to. You know, See if they're for real. Um, and I would say most of the cases, you know, they are interested in the business. They're interested in growing the business and they want to learn from you. and that's where you kind of start to build a relationship with these people. And over time, you know, you develop a good relationship. Have you ever had to make a really tough decision in that regard? I mean, um, it might not be in that specific, but think of a tough decision you've had to make in your career. Um, and what sort of learnings came out of that? Yeah, the tough decisions is really the patience of limiting the risk and not growing too fast because you know, you could easily, if you buy one container from a guy that you just met, you know, you're willing to take a chance. But you have to have the patience of making sure everything goes right because it's very, easy to say, well, you know, I bought this and made a lot of money. Okay. I'm going to buy another 1. I'm going to buy another 1. I'm going to buy another 1. we're talking about from the moment you buy it, the moment it's received in China, Korea and Japan, you're talking about 90 days. So the discipline of going through a trial process and waiting for the containers to arrive, making sure everything was done correctly, you have to be patient because that's snowball into a serious problem. If you've got a lot of money out there and containers on the water, um, and probably the biggest fear is. You know, the time of when you do the deal to sending the guy money. And then, you know, hope to God that the containers that arrive are exactly what you bought and. That is of the concern, you know, at the beginning, but, it's a calculated risk. You have to basically go with your gut. You have to take somewhat of a risk, but yeah, There are challenges and we've come across times where it didn't work out. Well. Jim, it's quite funny. I mean, you I'm sure you remember as I do, um, being a younger trader, right? That excitement of landing a new customer during that first container, you get the photos, everything's gone really well. Absolutely. You are eager to go buy another 20 containers from him. The next day, the material hasn't even landed in the market yet. It hasn't got to Korea, Japan, wherever it's going to China. It hasn't got it, but you're adamant because those pictures were so good. And maybe you had a phone call with the guy and he said, yeah, the material was beautiful. You now think. You're good to go. And you know, your team around you has said how excellent it is that you opened up this new market. And it's about holding that back. Right. And we learn over time that that's the decisions you've had to make, right? Difficult times you know, put you in a position to make these decisions. You learn and sometimes, um, really learning costs you a lot, but it's the best lessons you can know for sure. And that's why over time, you know, when you're having a conversation with suppliers and new suppliers, and you start to have a dialogue about the business, about the history, about everything else you start to, you know, if you feel like you're speaking the same language that they've been around long enough. And, you know, one of the things I try to do is understand who they're currently doing business with, because if they're currently selling to a trading company that I'm familiar with, then obviously that raises it to a level of feeling comfortable with it. Um, now you obviously want to try to find one that nobody really knows, but at the same time, that's very rare. There's a reason for that. So then there's a reason why nobody's trading with him, but even Jim, even when you get told that they're dealing with X trader and they were a reputable trader and you go, you can't phone that traded to confirm it. So how many times did I get told, Oh, this is who I currently sell to, or, you know, whatever it might be, and you don't actually know that that's true. Right. But, you know, yes, correct. I mean, there's some traders that'll, that'll share everything with you. They'll show, share prices. They'll share, you know, who they're selling to at what and whatever else, which those are the kinds of guys that I don't necessarily love because you know, they're going to do the same thing with your information. So, um, if they can talk shop in the sense of, you know, knowing what Birchcliffe is and knowing what Candyberry is and knowing that they are actually in the industry, that's very helpful. Because there are other people that are scammed, you know, big, big numbers out there, especially in the last couple of years, where there's a lot of containers Of copper that arrived, you know, with sand and not, I mean, that's a horror story and that's where even your competitor, you don't want to do that with your competitor. Cause you know, it's just really bad for the industry. It's not good for anyone, cause when there's big fraud in our industry, it's not just the traders. It's not the consumer, it's the banks. It's everybody gets a little bit, nervous and it just really isn't. Um, yeah, yeah, absolutely. So yeah, there's a lot of moving parts. Um, but you know, it's just part of the business and. And it's part of the excitement. It comes with the territory, but you play in a specific territory, which it comes in, in, in, in a lot of greater amounts. Yes. So, uh, yeah, you, you, you're probably more experienced in some of that than most people I speak. Yes. And, and there are times where, you know, look, nobody likes to lose money. When it's fraud, it's very different. And luckily knock on wood, I've had very limited of people just trying to like screw me by taking advantage of the situation. But again, if somebody is going to put dirt and mud into their scrap or send concrete, you know, that's a very, very. First of all, it's people that haven't had a lot of history in the business, because if you've had history in the business, you can only really get away with that once. So now and that once you really have a period of what, 45 days to take advantage as much people as possible because news travels very fast. Like if a container arrives in Busan with sand, it's a matter of days before everybody in the business, you know, at least in the trading business understands it because, you know, news travels very fast. And when you've got a bad player out there, I don't think you want anybody to get necessarily hurt. I arrived in, um, in Kolkata for the MRI a few months ago and I received a text message from somebody I didn't even know at the time telling me about a bad experience he had had purchasing some material and that text message had gone out to everybody. Right. Because he wanted to make sure that everybody was aware that this party was a bad party. I found that very interesting. It wasn't something that I'd received before. I've received phone calls and whatever. I hadn't seen a, a text message blasted out to everybody that was possibly listening. Um, And, and we're not held accountable. Right. So the industry has no form of holding each other accountable. Um, there's a lot to be said for, for the ability to do that. And if you're able to send a text messages or something like that, that's great. But that has to be brought into this industry. Yeah. I mean, you obviously have to take certain, certain disputes, you know, with the greatest salt, because, you know, a disgruntled buyer can easily just ruin somebody's reputation if they just, if they didn't get a good deal. Absolutely. So, but yes, no, when it comes to fraud, for sure. I mean, now. You know, people change names, companies change names. So so there is that aspect of it. Um, but yes, it comes down to a specific person. And that's why it's like, I don't really care about the company's name that committed the fraud. It's really who is the person that we're talking about, because that's the guy that has to appear at some point. You know, whether it's a new company or whatever else. And, you know, we've had that experience in, in North Africa where there was a bad player that screwed a lot of the traders and that guy is, you know, he's not around in the business anymore, but he was in the business for, for a period of time and he ended up, I don't know what happened, whether it was a desperation or whatever else, but he basically ended up putting a lot of dirt into the coppers. And he screwed a lot of the trading companies, including ourselves. Um, but again, it was the kiss of death for him. I mean, he can't come back. You know what I mean? That's a really good point though, Jim. It's not the company because it's much too easy to close a company and start another one. It's actually the individuals that you need to do most of your due diligence on when you're buying from somebody or selling to somebody, find out who that individual is. Find out about that person's reputation more than just finding out about the company. For sure. 100%. And that's why it is important to go and, and meet these people and sit with them and look at them in the eye because. You know, the amount of money that goes around, especially on the non fair side and the copper side, you know, you're talking about millions and millions of dollars that you're taking risks on, that, you know, now, same time, that is also a barrier of entry for a lot of people. So, you know, there is opportunity there too, because. A lot of people aren't necessarily want to take that risk, but yeah, no, it's, it's, it can be scary. So what should, um, the suppliers or the metal recyclers out there be looking out for when they're dealing with a new buyer? So, you know, you're obviously a new buyer, then there's the end users, et cetera, as well. If somebody is looking to. Grow their seller base. What should they be focusing on? What should they be looking for? It's obviously something that you try to achieve as well. So what, what really is that? You know, I think one, the trust is 100 percent the main factor and you want to make sure that whether the trader that you're dealing with is financially strong, um, has good markets, you know, and has been around long enough to handle certain situations, you know, when it comes to copper, for example. Just look at the LME over the last three weeks, four weeks, you know, when you're talking about an LME that jumps 500 a ton. In a short period of time, you know, you're bringing in a whole level of other somewhat potential headaches, whether it's margin calls, whether it's, you know, pricing options that, you know, you want to make sure that the trading partner that you're dealing with can handle all these types of situations because, you know, there are traders that may not be financially strong and in a situation like this. Where they're faced with margin calls, they might not have any money to pay you immediately. So, you know, you want to do your, your homework and make sure that they are legitimate trading partners and they're financially strong and they, that they can basically stand up to their commitments. Yeah, it's a really good point. I think somebody mentioned the other day that, um, you must always be aware that the buyer's risk is passed on to you. So if the trader has margin call risk, um, depending on, you know, what size book they're carrying, you know, all that sort of stuff, you need to be aware of that. And actually the topic we were talking about was, um, and it was with Bob Stein. The conversation was around do you commit everything to one buyer, build that relationship with that one buyer, or should you be spreading it out? And the idea was make sure you spread it out as much as possible because. Their risk is your risk and if everything's going to one party, of course, you Jim would like people to supply you 100 percent of their material, but at the same time we have to consider risk, right? So yes, 100%. Now with that said, there are relationships, you know, when you become friends with your trading partners, you want to do whatever you can to help them. So there is something to be said about. the long term relationships that you have that you favor, like, for example, for me, you know, My closest relationships, I almost have a vested interest in their business, so I need them to do well and I need them to be competitive in their market. So I can't necessarily take advantage of the situation, because if he can't buy the metal, then he's going to suffer and indirectly I will suffer. So I do try to help them out, whether it's, you know, understanding their business, giving them advice on whether I've seen certain ideas or other things that other people are doing, whether it's upgrading material, whether it's taking certain hedging risks, you know, or offering other types of risk management tools. I feel like Helping them out is going to help me out in the long run. So building the trust where they can come to me and with ideas or with questions. I think that's a big part of it. Um, so, yeah, that's another part is that, you know, for example, for us, we always want to stay on top of all of these potential services that we can provide, because if they don't see value in a trader. Then how long can you really last? So we do want to look for suppliers that. Prefer to do business with traders for whatever reason. They don't want to deal with the receivable risk. They want quick pay. I mean, payment is a big part of it. So, you know, the traders aren't making. For the most part, they're not making a killing. So, you know, when your business is more dealing with your competitors in Bogota, or, you know, you're dealing with trying to buy source scrap and wherever it is, you don't want to necessarily deal with having to open lcs happen to worry about, you know, is this buyer going to pay me? The containers are already arrived. You know, there is value to that I think, you know, there are a lot of suppliers that do respect it and do want to prefer to do it. Um, now, there are a lot of suppliers that ultimately, it's all about price, and they want to go straight as much as possible. And those are the kind of guys that sure, you can entertain them, but that's not where you're really going to grow your business. No. Um, There's a reason why there's traders, agents, and end users, right? I do believe that each party plays their part. Um, every different metal recycler has different requirements when it comes to sales. And as you say, they might just want something as simple as they just want to sell FAS and the end users are not doing the shipping, right? Therefore the trader plays a role. Um, there's so many places. So Totally agree with you. Um, that it's probably best for you to focus most of your time in the guys that are selling to traders, not the ones trying to convince them, because they've already got a shipping team and they're used to selling to the end users. Yeah. And there's only so much time you have in a day. So you, you know, why are you going to waste your energy on trying to buy from sins, you know, or Omnisource, even though, yeah, the volumes are massive and the opportunities are, you know, You look at them and you're like, Oh my God, there's so much scrap here. Like, you know, I could have a field day here, but yeah, they don't need necessarily somebody like, now there are some big companies that aren't willing to take some of the risks, you know, whether the receivable risk and whatever else where they may focus on running it through a trader, but you know, they're going to squeeze you pretty, pretty tight. I mean, it's very hard to make a lot of money on that type of business. Yeah. You spoke about payments being really important, especially, um, that's a real big, advantage of selling through a trader. When you're doing new business, what's your usual way of getting in there? What's your usual payment terms that you might provide? Well, unfortunately it's not always up to me. You know, the market kind of sets that. So you know, If there's a supplier that I'm trying to court and trying to do business with that seems legitimate, and he's already selling to trading companies that are going to pay him cash, you know, cash upon whether it's upon sailing or cash upon loading of containers. It's really hard to not have to match those terms. So, you know, ideally, sure, I'll pay you once it's received and verified, but that's impossible. So, you know, I almost have to get to what the market is already been set. So, you know, if I try to do an 80, 20, you know, and he says, no, I sell a hundred percent cash against copy of documents, then you pretty much have no choice because, you know, especially if you're trying to break in, you know, you can either break in with a massive price, which then you're just going to do a trial without making any money. You know, or you have to basically take his word that he is selling it. And you also understand what the payment terms are in that specific market. Pretty quick. You know, what the traders, you know, what your competitors are, how they pay, you know, there are some trading companies that won't pay anything until they get the actual bill of lading or there are other traders that basically will give advances. So, you have to kind of maneuver within, You know what you can learn. But, you know, unfortunately, that's where the risks come into play. You will eventually have to. Hey, how, how do you handle advances in, um, in certain regions? You're in, I mean, that's when you talk about risk, you want to pay deposited in some of those countries, um, yeah, rather you, well, so, I mean, that's when you talk about, you know, some of the experiences that I've had, you know, the not so good experiences mainly come in because of either paid them in advance or, you know, it really comes down to the market. So for example. You know, in some of the countries in Africa, like Western Africa, whether it's Togo, Benin, Ghana, Senegal, you know, those countries, we try to limit the exposure of paying in advance because not necessarily because we don't trust the supplier, but it's more of, of there's risks with the country risk or the shipping line risk, you know, when you've got cases like, uh, You know what happened with the Red Sea or what's happening with certain times of the year where, you know, the fruit season in Central America or the fruit season in Central Africa, where the last priority for the shipping line is scrap. So, you know, they're going to put anything else in on those vessels, but scrap. So, paying somebody in advance and having the container sit at the port for a month is. It's, it's expensive. So, there are certain countries where it's not that we don't trust the supplier. It's more. We don't trust the country or we don't trust the logistics. I mean, I was from South Africa, right? Born and bred. Um. And in our company in South Africa, um, or sub Saharan Africa, we didn't buy metal from anything north of the Sahara. So it was pretty much, we, we could manage everything south of there. So it was closer to where we were and we had multiple yards in the areas. So we could go and visit and make sure that the material was being loaded anything north of that. We just didn't take the risk for reasons that you're saying, right? I mean, a lot of it is out of the actual recycler's hands. I mean, government. Change rules in those countries, you know on a day to day basis and that and that's tomorrow They're exporting next day. They're not and that's you know, it's been that's been an issue for me over time I mean, you know for me for example, Venezuela, you know When I first started Venezuela was, was my biggest market, you know, the quality of the scrap there was incredible, the suppliers were super nice people, great people, great trading partners, but, you know, all of a sudden, you know, little Travis comes in and he puts a ban on exports of scrap, you know, and then it gets, then it becomes like a black market and you don't really want to get into this aspect of it. And, and this is one of the, you know, kind of the big concerns that I have, you know, about, um, The business is as scrap values, especially copper, when, you know, copper goes to 15, 000 and you're seeing the amount of money that's leaving these, these third world countries, the government's not, you know, unaware of it. So when they see all this high value, leaving the country, you know, they start to say, Hey, wait a second, what's going on here? You know, we're getting, you know. People are taking advantage of our raw materials. You know, they start to look at that aspect of it, and then they start to put in, you know, whether it's duties, whether it's bands on scrap. But, you know, what's unfortunate is that scrap. Will always find its way, so, you know, when they put a ban on the exports of scrap in Venezuela, all of a sudden, our volumes from Columbia, you know, tripled. or, Algeria to Morocco or, Nigeria to Benin and Togo and maybe it really is unfortunate when these governments put in these restrictions. It just creates, you know, a smuggling operation or it creates corruption. and it is a concern. So, and that's 1 of the concerns I do have, you know, moving forward, because we are starting to see more and more of that in the last, you know, even in the last year, you know, you're seeing. New regulations come into play in Saudi Arabia, in the UAE, in Morocco now you can't export scrap, you know, it's happening in Togo, it's just, it is becoming an issue. sure, if you're, a guy that's opening a smelter in those countries. Sure. But really, all you're doing is melting the scrap into a form. That's going to be sent to somewhere where it's just going to be melted again, because you can't, you know, stainless, nobody's going to build a stainless mill in a small country in Africa to make a finished product. Even copper, for example, when they start banning copper, right. All they're doing is melting it into an ingot form and then shipping it to Ningbo to be remelted there. So really, if anything, you should just tax it, you know, at a level. But don't create an environment where you're just gonna change the form into something that's gonna basically be shipped to the same consumer. And all you're doing is wasting energy. I mean, you're gonna have to now melt it twice. Mm-Hmm. I mean, I totally agree. We've spoken at the BIR about this many times, um, members of ISRI, but, um, it's, it's a big thing in Europe at the moment, obviously, um, and these discussions are being had every day. and the problem is, I think a lot of it's got to do with how our industry is perceived. Right. Um, that we're a waste industry. And, you know, we need to fix that as much as possible. Speak as, as much as we can to the decision makers and explain to them what we're actually doing, because I think really they just don't get it. And it's much easier for the large corporates of the world being the, the mills, et cetera, that can go and lobby the government and say, well, you know, you should keep all our raw materials in the country. Um, our resources should stay in the country. Um, and all they're actually doing is just. You know, opening their margins, they're just going to make more profit. that's the only plan and the governments don't see that around the world. Um, and yeah, I mean, but they're also, they're also creating, they're also creating a smuggling operation because if they get to, you know, scrap will find its way, especially if they try to put barriers into where it's just economical to just pay some guy, you know, at the border to just let your truck cross into wherever you want to go, you know, and, and, Um, they will find its way. I mean, the values, especially, you know, with copper, it's, it's hard to stop that. Yeah, well, I guess, you know, if you're a metal recycler, a decent sized metal recycler, you just set up your own furnace and you change its form and you melt it into a block or an ingot and you just have to export like it. It's just going to cost you a little bit more money, but, um, You know, as you say, it'll find its way. So is that, you know, if we were to speak about where you think this industry is going in the next 10 years, what it might look like, what do you think are the big changes that we can see? You know, when you look at the corporations now in the direction that the companies like Apple and Tesla And the automotive industry, you know, there is a lot of sustainability. There's a lot of knowing the full supply chain. You know, 1 of the concerns I have is we are going down a direction Of, you know, companies that are buying certain products, they want to know exactly where it came from in every aspect of it, whether it's because they don't want to participate In buying, you know, illegal material, It's, you know what I mean? Like, they want to identify exactly where they want. It's a PR aspect of it. They have to cradle to gray. Exactly. So, yeah, absolutely. You know, we've actually even been approached by consumers where, you know, they're saying, Hey, we don't want any conflict zone material. Okay. More like conflict zone material. What does that mean? You know, because they've had a war in the past or because they're in a war now, or how do you define that? Yeah. But, you know, at the end of the day, and what happens if it was previously recycled, right? What happens if you've got recycled material that's already been recycled and circular, right? It's just carrying on. So my concern is in, you know, talking to a big consumer in Europe where they were talking about how, to be able to sell to the automotive industry, whether it was Audi or BMW or whoever. You know, they had to verify the full aspect of where the material is coming from. You know, are we going down a path where you're going to create, you know, cathode and finished product for fully approved material and a non approved material? Because now you're talking about creating 2. Parallel markets where, you know, Hey, your scrap is coming from a factory that, you know, the origin of it is now going to be significantly higher than the scrap from the post consumer scrap. So, you know, are we creating 2 different products? And they're going to be, you know, moving side by side and how do you avoid people not cheating that system? here in california? We have you know, we have a bottle bill here we're you know ubc There's you know, there's the redemption program But you know you from time to time you have cheaters that are bringing cans in from arizona or nevada To take advantage of the five cents a pound or five cents a can redemption program. So, you know When you're creating these situations where there's two types of scrap and it's really the same scrap You know, there is concern of like, how do you work under that environment? And how do you not just say, Hey, wait a second. That looks exactly like that. Like, how are they going to know? Yeah. How do you identify that? That's, um, it's going to be very, very difficult. Well, unless it's coming, unless it's a full, it's a full closed loop system where, okay, the industrial scrap that's coming from the plant is actually melted into that product, or you become a strictly industrial consumer. You know, you could maybe do it through an auditing process where you're qualified. I mean, that could be like, but that'll be sent yet. Set commodity, which would have to flow directly back into the mall. It wouldn't be able to touch other people. Then once it hits a middle cyclist yard, then it's cross contamination. But absolutely. Yeah. And then all of a sudden you put 50 percent of your, um, Non approved material in your approved material because you're getting a premium. I mean metal recyclers are going to find a way to maximize this opportunity. So, and those types of situations, it's also just really, it's only going to make the consumer's product so much more expensive. Because, you know, products that are going to be made in China that don't have to live by, these rules, it just doesn't make a lot of sense that we're going down this path, but I fear, I'm fearful that that's kind of the direction just because it's more really coming from the top down where, you know, management is pushing this PR aspect, which, you know, some people may pay a premium for knowing that, hey, I know exactly where that came from, but at the end of the day, yeah, You know, give me a break. Like that's just going to make your costs go up in general, right? So now cars are going to be more expensive or anything else that you're buying. So, um, and I think just to be clear, um, before we finish off, um, we're all for Sustainability. Of course. We just, it's the way we execute that is really important. 100%. No, don't get me wrong. you know, I live in California, this is the most liberal, most, you know, so yeah, I am definitely in favor of being conscious to, and that's why, you know, even in the recycling business, you do want to follow rules, whether it's. If you're opening a scrapyard in California, you want to make it an even playing field, which means you have to take care of the rainwaters. You have to do all of the things that are required. You know, you want to do things the right way for sure. Yeah. Okay. Let's, um, finish off with some simple questions. We ask everybody that comes on Bourne Scrappy. So. Firstly, who would you like to see next on Bourne Scrappy? I think you were mentioned by Javed Ahmed from, um, Alkaria. So who, who are you going to pass it on to? Who would you like to see next? Good question. You know, one part of the industry that I think is also going to kind of be changing over time is these family companies that have been in the business for multi generations and they own, you know, These incredible properties in downtown areas of America's biggest cities, you know, real estate is becoming a big play in the business, you know, where some people are now looking to just get out of the business and develop the land and whatever else, you know, a guy that's, I think, very interesting that he's, he's done a great job and building a great brand is Edward. Can get her. I don't know if you've ever met him from from cast. Uh, I've seen you. You've done, uh, John Sacco and George Adams. He's another 1 that I think is worth learning because I think he's, he's done a great job. And he's probably in an area where, where a lot of what he's going through, I think is going to happen across the country and and he's a super smart guy. He's, he's And he's built a good brand. It's worth discussing. If I can, this is being recorded, um, two weeks before Israel, um, it'll come out probably about the same time as Israel. I am expecting and discussions are underway at the moment for John George and Edward to be. On stage with me as a panel to talk, um, on board scrappy. So well, I think that they travel together to get the BIR. So if you don't see exactly in Copenhagen too, yeah, exactly. But we're on the stage at Israel. So, um, to get the three of them up there and tell some stories, I think they're good pals, definitely quite good. Um, before we finish off, do you have a favorite TV series or movie? You know, I'm watching a really good show right now that's on Netflix called The Gentleman. It's, it's a really, it's a funny show. It's a, it's a dark comedy. Uh, it's a cross between. Succession and breaking bad. So it's, it's, which are two shows that I actually like to, but it's, it's a good one that I think it's worth watching. Um, have you got a favorite book? Yeah, recently. What I recently read, uh, the world for sale, which is, which is very appropriate to our industry. And it's, it's gives us a lot of background and history from a lot of these big trading companies. And I really enjoyed that. Um, another one that's also good With our industry is King of Oil, which is the story of Mark Rich, which is, it's, it's a really good book and a really good read. It got mentioned last week by J. Rabinowitz and I'm actually starting to read it now. So which one? The king of oil, the world for sale, king of oil. Yeah. I read the world for sale. I love it. Um, I haven't read king of oil yet. So yeah, Mark Rich. Um, favorite place to visit? Man, that one's tough because I do like a lot of different places. If it's beach, probably Los Cabos, Mexico, cause it's close. And we go there all the time. Uh, cities, uh, love London, love Tokyo. Um, and, you know, as far as adventurous, more outdoorsy stuff, love Colorado, um, love New Zealand. New Zealand's a fantastic place. So yeah, New Zealand's great, right? Um, last thing, have you got a favorite quote? Hmm, well, quotes that we, we use all the time, and this goes back to my earlier, that if you don't go, you don't know. Which is very, very true in our business. Very good. And, you know, nobody ever went broke taking a profit. We, we quote that kind of sarcastically all the time, but there is truth to that. And I tell my suppliers that all the time because if they're gonna speculate, you know, if you own the material, then you can make a profit, then go for it. Love it. Jim, it's been awesome, man. I appreciate you coming on Born Scrappy. Thanks so much. Thank you very much. Cheers, Jim.