S3E14: Strategic plays with Jonathan Ross of John Ross & Sons

In this episode, I chat to Jonathan Ross, Vice President at John Ross & Sons, a large metal recycler in Eastern Canada. The company has 14 yards, including a large auto shredding operation, and a very impressive cable granulation plant. 

Jonathan is a fourth generation metal recycler, and by the sounds of it, there'll be a lot more generations running this company in the future.  

In today's episode, we talk about:

👉 When markets crash
👉 Capital purchases
👉 Going direct
👉 Buying right
👉 And more!

Listen to the full episode. Wherever you stream your podcasts.

Born Scrappy. Brought to you by Buddy.

The only marketplace and trade OS built for scrappies, by scrappies.

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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/
https://www.linkedin.com/company/born-scrappy/

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'm chatting with my good friend, Jonathan Ross. Jonathan is the vice president at Jonathan Ross and Sons, a large metal recycler in Eastern Canada. The company has 14 yards, including a large auto shredding operation, and a very impressive cable granulation plot. Jonathan is a fourth generation metal recycler, and by the sounds of it, there'll be a lot more generations running this company in the future. In today's episode, we talk about the shit show, going direct, buying right, claims, and so much more. So let's jump into it with Jonathan, but first intro. Hey, Jonathan, how are you? Stu, good to see you again. Yeah, great to, great to have you on the show, my man. Um, well, I was in Nova Scotia just the other day visiting you. So, uh, glad we put this together. Small world. Isn't it in our industry that you actually made it to Halifax, Nova Scotia? I had a good time. Uh, you guys know how to put on a good feast. Um, went to a great restaurant. It's a beautiful town. Well, it's good to host you. Good to host you. And then we saw each other in Singapore. So we're all over the place together. You and I, the world has become very small. So John let's, um, let's have a quick chat and understand, you know, for those that don't know you, tell us a little bit of how you got into the industry and tell us a bit more about your company. Yeah. So John Ross and sons limited. It's, we're fourth generation, hopefully soon to be fifth, with my son coming in. And it's been, uh, the usual stories that you hear, you know, you've got people coming over from Eastern Europe, or Europe in general, usually it was Jews, Italians, and Irish. And in the early 1900s, Halifax was one of the point of entries to North America, and so was Ellis Island in New York. So in my case, my great grandfather came over from a Russian territory, we think it was today's Kiev, Ukraine, and, uh, you know, got into the border here in Nova Scotia. Most people got on trains and went off to Montreal or Winnipeg of all cities. He stayed. When he hit the border here, they couldn't pronounce his name. So they decided, well, I think the family name was Medvedovsky. They said, you know what? Welcome to Nova Scotia. We can't pronounce your name and we want you to fit in. So John Ross it is. Can't get any more further from a Russian name of Medvedovsky to John Ross. Yeah, so from there, you know, it was like nobody would hire him, they had to figure life out. It's not like, you know, today's world where government hands you money and helps settle you. There was none of that. Uh, he had a horse, buggy, went through small towns in this region of, of Canada, and uh, selling bags, bottles, rags, deer hides, whatever they could sell. In a small city called St. John in Brunswick is where he set up his business. And then they had my grandfather and my grandfather's brother, Max. So Max and Harry, my grandfather. Those were the sons, John Austin's sons. And then my father took over. My grandfather passed away in 1983. Nobody else really went into the business that had an interest in it, of his two other brothers. And my father took it over in 1986. And then I, you know, throughout this summer's, you know, the usual suspects I've been working in the plants, figuring things out, nobody would help me, nobody would teach me things. I had to learn how to drive forklifts myself. I figured out how to drive the bobcats, work the balers. I remember one day working there and the foreman's son would come over with a big grin on his face, dump a bunch of UBCs on my head as I was cutting bags open to put in this little briquette we had. And I ended up saying, you know what, I'm sick and tired of him giving me that look. I'm going to figure this out on my own so I don't have to wait for him to do it. I don't have to watch when he smirks as he dumps it on me. I'll do it myself. And that's how I started to learn how the equipment worked. And then from there, I went off to university. I did a undergrad at McGill University of Montreal in industrial relations and then headed off to law school at the University of Windsor in Southern Ontario, just south of Detroit, Michigan, and did my law degree. I came back to Nova Scotia. I knew it was not going to stay in Ontario. I really wanted to come back to Nova Scotia, practice law. Law wasn't my passion. Father called me up one day. This is like 1999 and he says, what are you doing? Are you going to make a decision or what are you doing? I need some help. So, got married in 1999, and then right after the wedding, I jumped into, to this business and hung up my, my legal hat. Still a member of the Nova Scotia Bar, mind you, but I don't really do, I don't do anything with it. And, uh, and so basically in 2000, it's been, it's almost 25 years, it's hard to believe that I've been full time working there. At our operation. And we, you know, we've gone from like two or three small operations. So my grandfather, Harry, had moved the business to a small town called Truro, Nova Scotia. It's a small little town. It's like any middle American, middle Canadian town. The railway running right through it. Small little operation. And then my father in 1986, when he took it over, he brought it to Halifax. It's the major population centre here. So about an hour, sort of, south of Truro. Thank you. And we're on a major port city. It's a major port, uh, city. And so when I jumped on in 1999, we had a couple of operations going at that point. And, you know, from there we hired, um, one of the biggest kickoffs for us is that we hired a trader, a Chinese girl who was a student here in Halifax who was working for a toy company. And they didn't rehire her, uh, because after her maternity leave, for whatever reason, it was our luck. We brought her on, we hired her on, and she took a very strong interest in this industry. And what she did for us is she catapulted us to the next level, because she opened up all of the, you know, the Chinese mills, she was able to directly speak to them, instead of going through brokers, traders or whatever, we were going direct now to the mills. And between that, my hedging program that I started to start hedging physical inventory. We've now gone from a couple of operations to almost 17 operations in the region. We're at 17 right now. So yeah, it's quite a big jump. And what, what do you find yourself doing now on a day to day? You're not, you're not getting cans thrown on your head anymore. So, uh, what do you do? No, yeah, you're right. So I started, it's funny you bring that up because. When we were in Singapore for the BIR, our trader was supposed to come with us and she got really sick. And so I haven't done a lot of the buying since I brought, I built a team around me now. So I've got, you know, a bunch of young guys and, uh, some very smart, educated guys that we've been training along the ways to buy metals from our customers and, you know, sell it, sell it to wherever. And I, because of all that, I've been more high level, like looking at growing the business, sell it, sell it. You know, keep the acquisitions coming, looking at more, because we've gotten so big, we've become more corporate, which I, which is, is good and it's bad, because when you lose that family business touch and you become more corporate, other things have to change. You have to become a little bit more professional, I guess, in a lot of respects, and you lose that hands off approach that you so, that helped build the team and the company to where we're at. And so, so what happens on a day to day basis. So when I went to Singapore and she wasn't there, she had a list of all these people I was supposed to meet. And every one of them kept asking me, well, what are you looking for for price? And what are you looking for this? And what's your, and I'm like, oh my God, like I was like a fish out of water again. I realized that I had to go back to the basics again and figure out what is Zorba worth today? You know, what is Zorba worth today? What's Taintable worth? I, I had to go back to know what the current market, obviously I understand the pricing and what it is. I just didn't understand the current market. So to day to day basis, we're really trying to develop a more corporate structure now, bring smarter people around us, and help control the rapid growth that we've had. Yeah, that's awesome. It comes with growth though. You know, I look at so many really large companies and, um, many of them started off as, you know, family businesses. And I find the bigger they get, the easier they are to compete with. But unfortunately there's nothing you can do about it because once you have. 17 yards. Did you say, you know, once you have all these yards, all of a sudden, um, you have to have processes in place. People can't just go and spend the money on capital. They can't just go and buy anything they want. You know, you have to manage, um, all the pricing, et cetera, which means that you're less agile in those yards. But at the same time, There is no other option. So I often have conversations with people, um, that are, you know, smaller companies, I'm like, okay, we'll use that to your advantage. Um, and, and, you know, you're going through it now that you don't really have the option. And the bigger you grow, the tougher it is, but you actually have a lot of benefits as well, when you get bigger, you have more volume, you can command higher prices, be more competitive in the market, et cetera. Also, you can, um, attract better talent as well. Um, when you get bigger, et cetera. So. It's, it's a double-edged sword. Right? And you've been going through that at the moment. You hit key point, you hit a key, you hit a key point when you said, you know, it's easier to compete against those bigger companies because we're in a region where we're, you know, we've got bigger companies coming outta the Montreal area, the Toronto area. Some have some facilities in this region that we're competing with. And one of the things that we've been able to do again, was the family touch. You know, we've always been priding ourselves. Like for instance, a load comes in. We've had customers that are not related to our feeder yards that would come to us. Let's just say we had to downgrade something. We'd have to go to them and say, Hey, a box of copper, number one copper, you know, it's, it's too, it's too dirty. There's just too many contaminants in it. We can't buy for number one today. They would accept that because they would accept that is because at the same time, we've had that same customer ship in boxes to us that they forgot to put on their packing list. So we have an extra box of copper, you know, and our motto has always been this work for the longevity of the business, not for the quick wins. So we're going to call them. We're going to say, Hey, by the way, you had an extra box of copper on your load that you didn't know about. And that's all part of it. And Stu, but when I, when I say you touched upon it, my frustration is I'm desperately trying to hold on to that small, Town, the way I want things done, versus the way a corporation does things, where you lose control a little bit. You lose control in certain ways, you're right though, you don't lose control in other ways. Because I remember when you told me your story about, and when you hit New Zealand. And you were in there, and I think you were competing against Sims in that area, and you were able to just really figure it out, because of that. Yeah, absolutely. I mean, that's, I had previously been in South Africa where we were the big, the huge corporation, um, we, we were privately owned. We did try and keep as agile as possible, but I got to experience those things that make it really difficult. So when I went to New Zealand, I used that as a strength. I was like, well, what can I do? What decisions can I make on the spot, which the likes of Sims, et cetera, can't do, um, and that was, you know, you get a customer there and he wants a certain price. You can pay him that price. You don't have a maximum price set to you by head office or a margin that you have to meet, et cetera. You can work on a smaller margin. Cause you want to keep him happy. You know, he's going to come back or, you know, some other material. You can make better margins on whatever it is. Um, much more agile, um, process. But, you know, we can go on this about this all day, but there's, there's definitely pros and cons, um, to growth. Absolutely. And we're on the same page. We're on the same page. Yeah, for sure. Tell me, can you talk me through a trade experience that has kind of offered you some massive learnings, um, and set up the way you operate, you know, going forward since then? Well, again, it goes back to, it's probably gonna go back to the girl that we hired to help us trade. When we started doing those trades at the time, back in the day, we were not sophisticated at that time. Not that we weren't sophisticated, but we were having to use, you know, brokers and other guys that had, you know, they took positions in mills. They took positions and, and they had the nuances and the sophistications to be able to do the paperwork for shipping and everything else. We had all of that sort of simmering in the background. We had a logistics. Um, we had a really good in house logistics team and everything. Um, but what we didn't have was the capability at the time to really go direct to market, direct to a mill. And with her coming on, with her opening up, uh, our, at that time when China was really hungry for, for metals during that, you know, the middle of the 2000s, 2010 era. We really, really picked up the pace with her doing that. Now let's backtrack a little bit to 2008 when the shit hit the fan for lack of a better words and we had the, uh, the, you know, the, the markets crash on us. I'm like, I will never forget that day in my life. I mean, she had just started with us. Imagine just starting with us and she had sold all this copper to guys and everybody was walking away from the trade. Everybody. I mean, we had about 60 containers at that time, which was a lot for us at that time on the water in distress. And so her and I had to really roll up our sleeves and figure out the renegotiations, the diversions. Are we going to bring stuff back? But we had to assess everything we had in our hands. But I'll tell you what, what doesn't kill you makes you stronger for sure. Because coming out of that, I mean, I remember the markets were ticking, ticking, ticking down so fast. They were stopping the trades at the COMEX because it was just, it was out of control. Um, we, we ended up really learning, you know, who the people that we want to deal with are and who we really got burned by. And the people that we really wanted to deal with were the people that said, you know, hey, I can't pay you today, but I'm going to make you whole, I'm going to make you good on these orders. And there was a few people that we came out of with that, that really set us up for future trading and future, future selling to who we would sell to. Those people I have a lot of respect for and admiration that they did what they could over the time to make up for the losses, you know, that we incurred. They incurred them too, but we incurred them and they made up for it. Yeah, I was going to ask you next about, um. You know, how you choose who you're selling to, right? So is there more you can add to that or, you know, quite nicely. Again, listen, it's, it's the usual, again, the usual things that we, that I've heard on your podcast in the past and what, what goes on for us, you're always going to get a guy that's going to probably pay you, you know, a cent or two more, are you going to take that leap of faith? You know, there's, there's a lot of them out there. You see them in Singapore. Again, they're all coming up to you. Everybody seems to have about the same price, maybe, you know, 10, 20 metric ton, more or less. And again, what I've learned over the years is that the guys, there's no heroes out there. There doesn't seem to be any heroic buying for the general stuff. Once they start to learn your product, you'll know if you're going to have a problem or not. Eventually they start to work out your pricing schemes with them. They know your product. They know how it's going to go through at the other end. I've learned over the years that when I've had problems, guys like that, people like that, buyers like that, If there is a legitimate claim, you'll know it's a legitimate claim versus a market claim. You start to learn who you can really trust and you understand, okay, this is legitimate. I get it. Looking back at our paperwork, what they're telling me, I'll work with these. I've always worked with these guys, but if I really feel that there's an issue where, where the product has gone, I've easily pick up the phone to these guys. We have that kind of simpatico type relationship. Where I say, Hey, so and so, you know, come on, man, this is excessive. There's something wrong here. Look at our paperwork, look at the pictures, look at everything we're sending you and they go to bat for us. And a lot of times we ended up settling on for the benefit to us, not to him or her. That's a big part of who we do. You know, honestly, the relationships for us is huge. It really does make a difference to who you start to do and who you get to know. Yeah, absolutely. No doubt. And now in order to make all these sales and open up new markets, you have to be buying really well. So you open up new yards, you acquire new businesses. What are you looking for and what is your strategy when it comes to actually getting the metal in the door? Well, again, it comes down to the local community, knowing who your people are in the community, who you're buying from. Again, as we're getting bigger, we're setting up those price sheets, exactly what you just discussed, so that they know, you know, their threshold, where they have to be. You're looking at what the competition is paying, and you're trying to train these guys in the diaspora, let's say, of our empire. You know, you have to look for the ways to upgrade your metals. You can buy, if you're really competing, obviously you're going to have to pay a lot. It's not, people think that because we're in Atlanta, Canada, it's easy to buy. Oh, you're buying everything cheap. Well, that's not the case because as I mentioned before, you're, you're getting price sheets out of Toronto and Montreal that are very competitive because of their competitive market. It really pushes us to have to be on the ball with what we're buying. And the only thing that they can do is making sure a, that they buy, right. Mistakes are going to happen, but they buy right, and that they know where they can upgrade. But sometimes you push the envelope too much, you lose that customer. You're pushing it too much, you're trying to go too wide with your margins, and then you're in trouble. So really, the only way that they can make a little bit better, If it's very competitive is to try to upgrade as best as they can the metals that they're buying. So you then looking at utilizing equipment for that. So do you put in capital or is it just standard, you know, and buy it and upgrade it. Most of the capital is invested in the Halifax area for us. We just got to get them to get it to us to Halifax and then we can take advantage of that. So you're right. So maybe let's just say they're not making as much in their sort of remote locations at their locations for our feeder yards, but we will have the upside and the equipment that we've got. So, you know, we've got, you know, the auto shredder here in Halifax. We've got a significant downstream. We've just upgraded it to make it more robust to make a cleaner package out of it. We've got a wire chopper. The first one was one of the largest ones, it's a bannow. It was one of the largest ones that they had in the world at the time. It was installed during COVID, and the reason why we went with them is they handle the The the asr the stuff that's coming out of the shredder We're making a specific package with the harness wire. So we're like the vertical integration That to me is key to making ourselves more efficient and that's making more money. So you're taking all of it We're doing it in house We make a product that comes out of the auto shredder that goes to our wire chopper and that wire chopper product We built the lab, we analyze every single bag of product that we make, and we market it direct to Mills. So that's how we really ramp up sort of our, the, you know, the efficiencies and how we can make better, you know, numbers at the end of the day. It's harder, it's harder in the remote areas though Stu, it's harder, you think about the remote guys, really they're, they can't do too much. You can only put so much equipment in before it doesn't become cost effective anymore. Yeah, totally agree. I think it's easy to, um, when you have the big capital, but when you're out in the regional areas, it's harder to constantly upgrade, but that is where the extra margin is, um, and to be able to pay the right prices in the market to be able to upgrade is definitely helpful. Have you've got multiple yards. So what are you doing about data? Like, how do you access data? Give us some tips on the way you are assessing data and how you're using it at the moment. Yeah, so, so it's again, right now, it's simplistic, you know, looking forward to any technology that's coming down the pike for AI. But currently, right now, we have an inventory control system. And we can access everybody's yards. We can see everybody what they bought. We can see average costs of what they paid for stuff. We can look at specific transactions to see what they paid for that specific item. And that is, and we've asked everybody that they have to report in the inventory once a week. We need to see their inventory coming in. And then we can go online and we can look at it and see what they've reported. We can go to physical site and see what they've done. But right now we're, we're waiting for better. There's not a lot more that we can do right now with today's technology besides using the industry specific software that we're using for inventory control. You know, it's interesting because AI is coming fast. It's coming hard. And I have a friend of mine who's not in the industry, but he's very smart and he's a very big real estate developer here. And he always challenges me, what do you guys do? And you're in, you know, AI is coming. What is your industry doing? And we started talking about things. And some of the things that he's talked about, which is very interesting to me is he's like, well. You know, if you have metal theft from your yards, you're saying that employees steal, or there's outside theft going on. Couldn't you, couldn't AI develop something that when you put it on the scale, when they buy it, they could, it could tell, it could read the material, and it wouldn't allow somebody to say, let's say a box of aluminum gets put on the scale, and it's five pounds. One of the guys decides to make it 500 pounds, call it number one copper. Well, couldn't the AI stop that? It could see, it could sense what's going on and say, no, that's not it. And stop the transaction from happening. Very interesting that he was thinking about these things. You know, we were just discussing where we could go with it. The other thing too, he says is like, think about your truck scale. It's got to be something on the truck scale that when loads come in, you can see things on the, on the truck, different, you know, stages, different material. There's any issues, any nonconforming, like it can read through, you know, the boxes and see blocks of extrusion. You can see nonconforming things within the boxes. I don't know. He, it's, it's interesting to think there's a lot of things that can happen in our industry, and it'd be interesting to see what gets applied down the road. Yeah, and I don't think we're too far away from it. I think, um, machine learning is here. So, you know, it's about who's spending the time. Teaching AI so that it has the ability, um, to learn these things, right. It needs to learn. There are companies out there at the moment that are teaching them our specifications so that we'll be able to utilize them to help you identify the commodities. Um, I think a lot of it isn't necessarily about theft. A lot of it is just actually, um, To help identify. So for your graders, so if they are unsure of what anything is in the beginning, they could take photos or use AI in a way that could identify what the material is. Um, but it's a very good case study, you know, that could be done on theft. So, um, how you could, how you could reduce theft in our industry. Um, yeah, there's, that's very clever how we could do that, but. Anyway, there's, it's going to go all different directions. I think our industry is going to be very different in five years time. And I think everybody agrees to that. And we need more data. It's why I've been building buddy. Like we need more data, the way we we're trading, the way we're doing everything at the moment. Um, we're a few years behind the rest of the industries and I think we'll start catching up very soon. It's some small people. 100 percent data is very important. It's extremely important because how do you manage a business without it right now in this day and age, you know, you know, 1520 years ago, we were still handwriting slips, you know, to bring the computer. Yeah, 15 to 20 years ago, and I finally, you know, push my father to the right and said, this just have just trust the process. And now, you know, like I said, you're looking at average cost, just basic things like your average cost, how much you know, is extrusion worth right now? Can we even sell it? Have we screwed up? Or can we sell it? So just little things like that really catapults the efficiencies of the company. For sure. Like it's the only way you have to accept it. I totally agree. And What about your people, right? So people are everything for us. Um, they're a huge part of what we do. Um, we always talk about trying to bring in good people into industry. You spoke about bringing in your trader, um, previously, what do you do about, you know, key person risk? You know, if somebody leaves, you've got a massive hole there. And then at the same time, how do you keep How do you make your key employees happy and get them to stay? That's a good question. That's a really good question because it's even harder. It's hard everywhere. It's even harder in our region, as you can appreciate with our low population. And a couple of things, you know, my, my son, who's at McGill right now, who's doing a commerce review. One of the things that he's shown me about our industry. And, and, you know, from our discussions offline, like I've really, really seen our industry over the last five years to my son's eyes as a beyond exciting industry, and we should be very proud of our industry. So what he's done is he's shown me that there's finance majors coming out of universities. We have local universities in Halifax, very, you know, you know, world renowned university here. And he says, you know, look at those finance majors coming out of these universities. Where do they end up going? Usually the banking world, New York, Toronto, those are the places they end up going, the usual path. He said, I, uh, you should bring them into our industry and you realize that you're an international business, foreign exchange, commodity markets, all these things. You get to travel, you get to go to trade shows, you get to meet new people, you get to see different things. And, and when he, when he explained that to me a lot more, That's how we ended up hiring a couple of young guys to help us on the trading floors, and it really, I would never have looked at it, I probably would have looked more towards a trade school versus a university. I didn't think somebody coming out of finance would be interested in our industry, until you get somebody who, you know, shines a light, a different perspective of our industry from his angle. So, you know, that's been one of the things my I've had long term people that have been with me 15, 20 years, including, including the trader, my logistics managers been with me for a very long time. Part of it is just being kind to people, being good to people, not being an asshole, you know, recognizing that there's going to be days, seriously, recognizing that there's going to be days where they can't make it in and you have to be supportive of your employees, have to be supportive. I just came from a 40th anniversary of an employee who's been 40 years, she's been with us. I just drove in from our original operations in Truro, she's been with us for 40 years. And, you know, part of it again is, uh, is, is hearing from people how fascinating the industry is. So yeah, you have to be competitive in salaries. That's, that's, that's always going to be there. But you also have to care about these people. You have to realize that they're, you know, it's, it's, it's a harder industry. It's not Google. We're not dealing with slides and ping pong tables everywhere or whatever. You know, they're coming in to an industrial setting. Yeah. But you have to make it so you've got to keep it interesting for them. And that's a big part of us for sure. We bring them, I bring them with me. Let's go, let's come to one of the trade shows with me. I bring them on the road with me, let's go visit one of the yards. Get them out of the office, get them to physically see what they're working, what they're working towards. And how it all comes together. That's been a big piece, too, as well. One of the, one of the guys in the banking industry told me a couple of months ago, I said, you know, are you guys having trouble keeping people? Because it seems to be everywhere. He goes, it's a disaster. We're competing with all the other banks, trying to, they don't last long. They come in and out, it's like a turnstile. He says, what I do is I bring young people with me, I go, I find them at their desk, and I bring them into this building, It's a massive meeting where it could be a huge deal going on in the boardroom and the banks involved. And I say, sit in the corner. He says, sit in the corner and shut up. Don't say a word. Just listen. And he says, that goes a long way. Something that we've always done too. Like I've reinforced what I've always done with my teams. Yeah, I think that's excellent. You've touched on a few really good points. You know, when you're trying to attract new talent, um, I had Abby J on the other day from Steel Bro and he was talking about, he used to always just tell his friend, he's an investment banker. Because the actual day to day of what he was doing every day, he's hedging commodities, he's hedging currencies often, you know, he's, he's looking at finance, he's, Constantly looking at the credit that he gets, wherever he's getting it from, or, or, um, cash flow, et cetera. He was constantly doing what a banker would do. So it was easier for him to just say, well, I'm an investment banker. And it is so, we just do the practical side of it all, right? They're doing their, they're doing it on the bank side. We're actually doing with physical, um, goods. And an actual, you know, capital and, um, outlaying capital and, and, um, acquiring stock and inventory, et cetera. It's a lot more exciting for a lot of people. Well, we do once they get in, then sitting at a bank or that, but the other thing you said, which I think is absolutely vital and you touch on it, and it's so good is shows somebody where they could be. And as soon as you can kind of guide them and say, well, look, if you carry on with us and you know, you keep putting in the effort and I do this as well in the yards, I'm like, you don't have to always be on the front scale. You don't have to always have the cutting torch. You don't have to always be on the forklift. Like there is nothing stopping you from becoming a yard manager and then. Be, you know, moving up even from there. And I used to do that all the time when I brought in young people into the company. And I go, you see that guy, that guy started where you're starting right now. Cause often they look up, then they go, Oh, this guy, you know, he's the manager. He runs this huge yard. He must've started, he must've gone to college. And it's, it's quite, um, for them, it's extremely exciting to see that there is an opportunity for them. Um, and. It gets people a lot more committed, um, and excited and keeps them 100 percent in place. I'm going to tell you a funny story. I'm going to tell you a funny story related to all this. Last Thanksgiving, Canadian Thanksgiving. So it's in October. It was a long weekend for us and my managers didn't want to come in on a Saturday and trill, let's go back to trill again, brand new operation. We had, we were really cleaning it up, trying to make it look great. And I said, don't worry about it again. This is me. And I was being very, very sincere. Not, not an ass. I said, don't, don't worry. I'll come in. I'll open. I'll do us. No problem. And they're like, Oh no, you know, whatever. So anyway, I went down anyway. I went down, and I said, give me a forklift, give me a young guy, we're going to go out and back, we're going to work together, I'm going to clean up in here, I'm going to teach him some stuff. And we went out there, and we were moving and sorting, whatever, and spent the morning working at it, and cleaning up a bunch of stuff, showing him stuff, and then I had to leave, I had to get back. And so, one of the managers that was there called him over and said, hey, hey, Keegan, come here for a second, come here. How did that guy do for you? Oh yeah, he was really knowledgeable, really good supervisor, oh yeah, yeah, do you know who he was? Yeah, he was a supervisor from Halifax. Nobody, that was one of the owners working with you and the guy was floored and I didn't even think about it. I didn't do it on purpose. It wasn't an undercover boss situation, Stu. It was just, I was just out there working and training him. I never really thought about saying, Hey, I'm Jonathan Ross from John Ross and Sons, one of the owners. It was more like just let's get things done. Let's get these guys excited. And by the end of it, he learned so much just in those few couple of hours. And he had a very good attitude out of it and you look to those guys to exactly what you said That's how you decide you to figure out who can come through the ranks Who can do just more than starting out as a laborer and all of a sudden they're becoming like, you know regional manager We look for that all the time. I mean, I had a very, very, a few times, very, very similar experience. And when I set up my company in New Zealand, nobody in the yard, a lot of people didn't know my background that I'd started at 18 as a laborer, right. And worked my way up in a huge company. So. Whenever there was something delayed or whatever, I would jump on the forklift, um, and I would kind of load whatever needed to be loaded or clean up an entire area. I'd go, guys, you know, I realize you've been busy, but this area is now looking, you know, like a pig sty. Um, I realize you're still busy. So I'm going to jump on a forklift. I'm going to tidy. And I would do that in a day or whatever it was. And. I would then be shown the group, like the WhatsApp group, like the yard. Who was like, it was commenting and sending pictures of me in a forklift. And I realized that nobody realized that, um, you know, the guys at the top actually had worked in the yard. So I started making it a rule in the company that everybody would have to spend time in the yard every now and then, just to show that, um, we're not higher and more important and we've also started there and it gives them the opportunity or makes them more excited. A hundred percent. It gets rid of that. You try to minimize the us against them mentality. You know, it's the yard guys. They don't know anything in the office mentality and vice versa. They're not listening in the yard to us. Uh, and you're right. And, and it's also, again, it goes back to the very old expression. You're not going to ask somebody to do something that you wouldn't do yourself. And for me, jumping on a forklift, I never even thought about it, really. I've just been doing it all my life. It's nothing for me to jump on the forklift. You know, product around, I've just done it, you know, but these guys haven't been around back then when I used to do it when I was younger, obviously. So they don't know that I could actually do it, but it's good that you're right. It just shows them that you can, I, I think it's very important for sure. Let's talk about, we spoke about upgrading and utilizing capital to, um, help you, you know, to get that extra margin out, whether it's, you know, your big auto shredder you have or, um, cable granulation, whatever it might be. How have you used, um, capital to I guess, increase the value in your company and increase the value per kilogram, per pound, whatever you're doing. And do you recommend for people that are looking to grow their business, that they should be looking at debt funding? Should they be selling some form of equity or how should they raise their capital, um, to go and grow? Yeah, that's a tough question because every business has their own unique. Situations do and it's, you know, you get a little bit, we're, we're fortunate. You're always going to have to have that line from the bank. You're going to have to have a strong relationship with your bank, because as you know, from our industry, the guys that are supplying, you want to get paid before the load even leaves the yard. And, you know, on the flip side is it could be 60, 90, 100, even more days before you get paid from the end user of the material that you sold it to. So you have to have that bridge, that bridge with the bank. Um, and a lot of time our capital purchases, we've been very, very, um, disciplined, I guess is the word, in terms of, When we're buying equipment, like we've got to make sure that we have the money in the bank type of thing, yeah, you're going to use some of your lines along the way, but you want to make sure that you can afford what you're doing. And when we're assessing what we're buying, what's going to be the outcome for us? Like, are we going to be able to really increase our margins quite a bit? If it's not going to do a lot, we've done assessments on some equipment that we said no to, because we've looked at it and says, by the end of it, you know, I look to the buyers and say, Hey, if I process this and turn it into that, how much more am I going to get paid? And they're like, well, you'll get a 5 cent premium. Well, then we're not going to go, there's no point for 5 cents. Right? So we've, those decisions get made where we say, well, we don't need that equipment right now. It's not worth it. It's nice. It may get rid of some labor. But by the time you do all the math with the labor savings and everything and the upgrades that you're going to get, it still doesn't work out in the end. So that's a lot of the re that's how we do each bit of a acquisition that we're going to do with capital is we assess whether the benefits are going to far outweigh the inefficiencies, let's say. I think a lot of people don't necessarily, um, well, a lot of the small to medium sized guys don't necessarily use trade finance. Um, and it's a huge way. To, um, grow your business. Got to be careful, obviously. Um, what the structure looks like and who you getting into bed with. Um, I learned that firsthand, but really that trade finance, when you're having to pay for that material as it comes in the door, Um, the ability to wait a little bit longer to be paid for it can give you that extra margin and allow you to also compete in the front door as well. Yeah, that's a good point. Again, fortunately we don't have to worry about that end of it, but, uh, you're right, there would be though there's many out there that do, and, uh, you just have to be very cognizant and watching all of your receivables and things that are happening and making sure that you don't get caught, what's the best piece of equipment you've bought or worst. Well, the best for sure is those two pieces of equipment that work, uh, you know, harmoniously together. It's the, it's the auto shredder for us. That was a game changer for us in 2015 when we brought that on, it's a Wendt and, um, we were under spec'd on the downstream size when we went to buy the, the, the wire chopper. And again, the whole point, as I mentioned in this, in this podcast was that we were going to upgrade materials coming out of there. The problem happened is that we weren't making a good enough product because to me, I'll describe the wire chopper as a Ferrari. It's a different business. It's not the scrap business. You have to treat it totally different than just jamming as much stuff in as you can like a baler or an auto shredder and let it do its thing. You've got to be very cautious on what you're putting into the machines. So we realized that our downstream wasn't, wasn't good enough. And we literally just put in more robust downstream that's getting a cleaner product, that's producing a much cleaner product for the wire chopper. Those two together, by far the biggest, best acquisitions we made. Second best, beyond that would be, we just bought a REB4 from Sierra. And it's funny because I've got guys that have been with me for a long time. They're always cranky, never anything positive to say. I went out there and asked them, How do you like the Rev4? And they actually came with a big smile and said, I love it. And I'm not used to hearing that from a lot of stuff. Usually they're just, yeah, yeah, it's fine. But then they actually said they love it. And I'm getting a lot of compliments on that. So that's been a game changer for us too. It's much more powerful. I'm not, I'm not trying to, You know, John and his team are excellent to deal with at Sierra, but the product itself, why I liked it, it's just a unique feature. It's a unique baler with the similar to their portables where the, you know, the paddles drop down to push the material down. It's a very interesting system. It's done a lot of good for us too. It's really amped our balers up product for us. I must say, um. John Sacco really lives by his brand. Like, I actually messaged him the other day because I was visiting a customer of Buddy's and uh, he was, couldn't stop talking how incredible Sierra's post purchase Response has been right. And I'm talking about after they bought the machine, any issue that they've had, they are. So have been so on top of it. So this isn't a massive pitch for Sierra, but, um, give credit where it's due. And you don't often have equipment people or yard people talking, saying great things about their equipment. It's usually just tell you the complaints. That's great. What you've heard. I've heard that, um, after sales has been. Unbelievable from them as well. Okay. So when you buy a piece of equipment to your point, when you buy a piece of equipment, the most aggravating thing in the world is when you can't get parts or you can't get ahold of somebody, you're having a problem where you've got to go through a whole process. So one thing about those guys, for instance, as an example, there's others, as many other companies too, that we deal with that are just have the same, but the big thing for us is customer service and they have a bang on. Like, if I am not having satisfaction, or I need something, I can write him, I can write his nephew Phil, I can get right to the people I need to get to, say, listen, I'm really having trouble, and they will action it right away for us. That's a huge thing. I got to know him because, as you know, I'm a member of the board of Cary, so the Canadian Association Recycling Industry. I'm a board member. I've been a board member for a long time, sister to Rima, and he, you know, he, He came up, so we got to spend a lot of time together and what he's done for the industry, besides just his company, what he's done for the industry is really game changing. It's a theme that we've always used here as well at John Ross and Sons too, when you're speaking to government officials, when you're speaking to anybody, Stu, the industry again is so fascinating. People don't understand us. We've got a very bad, you know, there's a bad connotation to us stigma to the junk business. And when you show them the operations, when you bring them on a tour, like you saw our operations, um, when you bring them on a tour, it really opens their eyes quite a bit to the industry. And so John, you know, he's produced repurposed on YouTube and you can show people that, but our industry there is so it's exciting. It's extremely exciting. And it takes a lot, but guys like him. Guys like us, guys like you, Stu, that go, you know, that have these podcasts, you, you highlight our industry for what it is, a fascinating international industry that contributes to a lot of different other industries. Yeah, I couldn't have said it any better. Jonathan, tell me, who do you want to hear next from on Born Scrappy? Okay. I've got a list for you on this one. I've got a few. So I, I am one foot in the door of old school and one foot in the door of new. And a lot of the guys that you have on always give you like, here's the innovative guy I want to hear from him. Or I want to hear from this manager or this. But I look back to some of the old guys, the stories, it's so fascinating. Some of these old guys, I look at guys like Michael Lyon. I don't know, you, you know, Michael Lyon from the old Philippine Lion. Michael was, uh, Michael was, I think my first guest ever on Born Scrappy. I think it was episode one. There you go. It's amazing. Episode one. So episode two, there's guys like, I don't know if you know the name, Rick Schwartz. I mean, I've learned a lot from him over the years. He used to be part of cow bag, I think back in the day. And then he started his own trading company guys like Glenn gross from Wimco to Pittsburgh, if you know those names, even Marcella Dawn, she's been, uh, you know, she, she's a female trader in the industry and she's really trailblazed. I hear you. Like I love, I love getting value from stories. Like that's the whole idea of Born Scrappy. And we have brought in a bit of a younger element lately as well. But the, the stories that we can learn and the experience that people have been through, there is so much we can gain from that. It's hugely powerful. So yeah, I like that list. That's awesome. I'm going to get ahold of them. Thanks John. Um, let's get to know you quickly before we go'cause we are running outta time. So, favorite TV series or movie? Oh my God. Narcos. Narcos. Narcos on Netflix. I love, i I love real world. Sensational stories like that. And Munich, the movie Munich, like fast. Those to me, those stories fascinate me. I love watching those kind of things. Yeah. Favorite place to visit. Uh, I have to say Japan has always been a favorite, so we just got back from Tokyo and Southern Italy has always been a favorite of mine too. The Amalfi coast area, beautiful, beautiful part of Europe. My wife loves it. Her favorite place as well. Um, favorite book to read? Um, well, I've read a few, you know, there was, what was it called? It was called, um, Junkyard Planet by Adam Minter. Do you know that book? Yeah. Yeah. I read it. Absolutely. It gives you a great background of where we come from, what the industry is all about. Right. That's right. Exactly. And that was fascinating to me. But on a side note though, I like reading biographies, so I was reading, um, One of my, my biggest ones was a woman by the, you know, Madeline Albright. She was sec, I think she was Secretary of State of the United States. I love reading about her. Um, one of the prime ministers of Israel, Ariel Sharon, he wrote a book. I find those, I find those real world stories and politics and world order. I find that very interesting stuff. So those would be some of the books I've read. Um, there's a great book by Ray Dalio called the changing world order. I think that's exactly, might be a little bit off, um, written a few years ago. Very, very good book to read. Um, he's a very intelligent guy and kind of predicting what's going to happen, um, the world order. Um, lastly, have you got a favorite quote? Okay, I've got two because I couldn't pick one, but listen to them both because I, again, I listened to all of your podcasts, except for obviously I missed number one, one of them is from an American philosopher, a guy named Ralph Waldo Emerson. And he said, and listen to this one, it goes back to leadership again. Do not go where the path may lead. Go instead where there is no path and leave a trail. Right? So go where the path may lead, don't go, yeah, go where there is no path and leave a trail. And the other one, this is a really good one. This is a really good one. My wife really loved this one too. Margaret Thatcher, Margaret Thatcher. Being powerful is like being a lady. If you have to tell people you are, you aren't, right? I love it. I love it. I know that. I love that one. I use it often. It's classic. Jonathan, this has been lots of fun. Thank you so much for joining us on Born Scrappy. Looking forward to seeing you again soon, mate. It's been great. Great to finally be on and good to see you again, my man. Take care. Cheers, mate. Bye.