Sadoff Iron & Metal Co., headquartered in Fond du Lac, Wisconsin, has built its business in part by focusing on partnership, trust and transparency, CEO Mark Lasky says, with the goal of exceeding its customers’ expectations.
Mark and his brothers, Jason and Brad, who both serve as executive vice presidents, are continuing the tradition that was established nearly 75 years ago when their grandfather Edward H. Rudoy founded the predecessor to today’s Sadoff Iron & Metal, Block Iron & Supply Co., in 1947.
Block Iron & Supply provided new steel and building supplies and recycled scrap metals, delivering the prepared scrap to local foundries.
Sadoff & Rudoy Industries was established in 1964 when Rudoy purchased Sadoff Iron & Metal Co. in Fond du Lac. He added what Mark claims is the first automobile shredder in the state in 1967 in partnership with Neenah Foundry Co., Neenah, Wisconsin, establishing Sadoff Iron & Metal as a major supplier to steel mills in addition to the foundries the company already served.
Sheldon Lasky, Rudoy’s son-in-law and Mark, Jason and Brad’s father, joined the business in 1972, leaving his job as a stockbroker to take over as CEO. Under Sheldon’s leadership, Sadoff continued to grow through additional acquisitions as well as through greenfield expansions. Sheldon handed the CEO title to Mark in 2008, when he took his new role as chairman of the board.
Despite these leadership changes, supplying foundries remains a focus for Sadoff Iron & Metal, as does its partnership-oriented approach.
Sadoff Iron & Metal Co. at a glance
Ownership: CEO Mark Lasky, Executive Vice President Jason Lasky and Executive Vice President Brad Lasky
No. of employees: 225
Locations: Headquarters and a second location in Fond du Lac, Wisconsin, with three additional yards in Green Bay, Manitowoc and Sheboygan, Wisconsin, as well as two scrap yards in Omaha and Lincoln, Nebraska, and Sadoff E-Recycling & Data Destruction (SEDD) processing locations in Oshkosh, Wisconsin and La Vista, Nebraska
Websites: https://sadoff.com; https://sadoffelectronicsrecycling.com
Equipment: An auto shredder and nonferrous downstream in Fond du Lac; a fines separator; two 1,000-ton shears; one shear/baler/logger; six HRB balers from Harris, Cordele, Georgia; cutting torches; mobile shears; a briquetter; a block breaker; a fleet of luggers, roll-offs, tractor-trailers and 45 power units; and ScrapRunner dispatching software from AMCS, with North American headquarters in Boston; multiple hand-held spectrometers, a bench spectrometer and button furnace for quality testing
Services: Scrap processing and trading; third-party scrap brokerage; multistate or multisite industrial scrap management programs; electronics remarketing, data destruction and recycling through SEDD; and transportation
Foundry focused
“We’re a relationship-based company, and we’re a foundry- pointing company,” Jason says. “When customers buy into that, then we have the ability to work with them and partner on their cost savings, whether it’s producing different product blends or different things like that. Something that I think we do really well is to work with our customers, listen to our customers and, at times, to provide really out-of-the-box solutions for them, without being too specific for competitive reasons,” he adds.
Mark says Sadoff does a good deal of material testing for its ferrous foundry customers using hand-held analyzers and bench spectrometers. “We are known for that, especially on the ductile side, and that has given us opportunities,” he says. “As we tell our customers, we are not magicians; we can’t take alloy out of material, but we can tell you what’s in it, and we can segregate it.”
He adds that foundry requirements can be challenging for some scrap companies to meet. “Foundries need the right material to meet their tight specifications, so they turn to us for our expertise in finding the quantity and quality materials they require,” Mark says. “It’s a service not all scrap processors want to provide.
“We refer to ourselves now as a boutique because not everyone wants to do what we do,” he continues. “There’s value-add, yes, but there’s cost-add to what we provide.”
From Sadoff’s shredder and nonferrous downstream alone, Mark says, the company produces 13 different products. “You’ll talk to some shredders around the country, and they’re producing two. The flexibility and the adaptability of our company and really working with our customers has been a differentiator for us.”
Photos by Roxanne Elise Photography
He says Sadoff’s quality is “time-tested,” adding, “We’ve been approved by the marketplace. We are going to do what we say. And if we make a mistake, we have a process to get down to the root cause of it and make it right. We have found that we are not judged by our mistakes as much as we are on our responsiveness in correcting them.”
In addition to producing quality products, he credits the relationships that Sadoff’s trading team has with consuming customers for the company’s broad reach in the nonferrous sector. Despite Sadoff’s locations being in the Upper Midwest, the company supplies scrap consumers throughout the U.S. and abroad with nonferrous scrap. “Metal will move where it needs to go,” he says.
Mark says Sadoff sells its scrap metal grades to consumers in 45 states. “Somebody in California is not going to do business with somebody in Wisconsin if you are not doing a quality package because that is a big screw-up if you don’t get it right and you ship something that far.”
Although Sadoff also has supplied nonferrous scrap through brokers to consumers in Canada, China, Taiwan, South Korea, Europe, India and Mexico, Mark says the company prefers to find domestic homes for its scrap. “We are not looking for new homes right now on the export market,” he adds. “We want to know who we are doing business with.”
While he says Sadoff specializes in white nonferrous metals because that’s primarily what manufacturers in its operating area generate, the company also handles red metals ranging from copper chops to bronze and brass grades, as well as precious metals.
Scope and scale
Annually, Sadoff Iron & Metal handles some 300,000 tons of ferrous scrap and 120 million pounds of nonferrous scrap across its two locations in Fond du Lac and its additional yards in Green Bay, Manitowoc and Sheboygan, Wisconsin, and in Omaha and Lincoln, Nebraska, Mark says.
In addition to the auto shredder and downstream sorting equipment Sadoff operates at its Fond du Lac yard on West Arndt Street, the company operates two 1,000-ton shears; one shear/baler/logger; six HRB balers from Harris, Cordele, Georgia; cutting torches; mobile shears; a briquetter; a block breaker and a fleet of luggers, roll-offs and tractor-trailers.
Sadoff also brokers material that it doesn’t process at any of its facilities. Mark says brokerage accounts for roughly 15 to 20 percent of the company’s annual volume. “It can ebb and flow depending on what’s hot in the marketplace,” he says. “It’s really been a boon to our business to be able to offer that.”
While all the company’s locations accept electronics for recycling, its Sadoff E-Recycling & Data Destruction (SEDD) division, which was established in 2017, operates out of facilities in La Vista, Nebraska, and Oshkosh, Wisconsin. These facilities are R2 (Responsible Recycling) certified and operate only as e-recycling and data destruction sites.
SEDD, which Jason heads, evolved from an aggregator of electronics to an information technology remarketer, recycler and data destruction firm.
“We accepted electronics at our facilities for many, many years,” Mark says. “We thought there was an opportunity” to expand beyond its role as an aggregator.
He says the company initially considered acquiring an electronics recycling company because of the “really steep learning curve” associated with expanding into information technology asset disposition and electronics recycling. Sadoff was working on such a purchase about four years ago that failed to come together, Mark says. “But we were committed to being in it, so we did it organically.
“It’s a different beast because we are having to navigate different electronics recycling laws throughout the country, and some of the dynamics of the market utilize a charge model versus a we pay model,” he adds.
E-Cycle Wisconsin is a statewide, manufacturer-funded program to recycle certain electronics used in homes and schools. Manufacturers of computers (desktops, laptops, netbooks and tablet computers and servers, if used by households or schools); desktop printers; and video display devices, including televisions, computer monitors and e-readers with displays of 7 inches or more in the longest diagonal direction, provide funding for the program.
The company shreds hard drives andmanually disassembles devices. SEDD also offers data overwriting services, Jason says, with various levels of protection designed to meet the varying levels of data security required by its clients.
Photos by Roxanne Elise Photography
Jason says SEDD is handling more than 4 million pounds of material annually. While the company continues to see this division grow, he adds, “COVID really brought some additional challenges over the past year because technology was deployed a lot longer in the field. So, we’re seeing that those refresh cycles have really been pushed out. That and issues with the supply chain in getting new equipment have really been challenging.”
SEDD’s business is 30 percent refurbishment and 70 percent scrap currently, Jason says. “We’re actively changing the balance of that,” he adds, noting that the company is working to increase its refurbishment and resale segments.
While SEDD is growing, Sadoff remains focused on supplying its foundry customers with specialized scrap blends while managing rising scrap prices.
The pricing environment
Mark says Sadoff has seen a 9 percent increase in industrial scrap generation year over year through mid-June thanks to the growth in manufacturing. Scrap pricing also has increased.
“At these levels, it gets a little scary,” Mark says of pricing. “If you’ve been in this industry long enough, you’ve seen the ups and the downs and you’ve been clobbered over the head.”
Mark says the leadership team at Sadoff is being very disciplined when it comes to its inventory turns as a result. “We hedge our copper position on certain grades. We pay very close attention on our receivables, payables and our cash flow.”
He continues, “But the other thing is that the fundamentals are a little different this time. There are true supply-demand issues, so you can see where it’s coming from. In 2008, it didn’t seem to be supported by anything. It just went up, and nobody could really point to why. At least this time, you can see the demand. You can see the supply chain issues. You can see the influences that are happening geopolitically,” Mark says.
Despite this visibility, “It still makes us a little nervous when you are on the high wire,” he adds.
While Sadoff hedged its aluminum scrap briefly, Mark says it abandoned that effort because the tools available didn’t work for the company. Sadoff also has looked into hedging the ferrous grades it handles. However, Mark says, “Because we deal with such specialized grades in the ferrous foundry market, we haven’t found a real good application for us.”
While high, Mark says ferrous scrap prices have not increased as steeply or quickly as steel prices have. “That has really decoupled,” he adds. “If it was trending historically, it would probably up another $500 to $600 on the scrap side. I’m not advocating for that because the higher you go, the farther you fall.”
Mark speculates that the decoupling of scrap from finished steel prices could allow ferrous scrap prices to trend upward over a longer time frame and not fall as sharply should steel prices decline.
Employees wanted
Sadoff Iron & Metal Co., headquartered in Fond du Lac, Wisconsin, has 11 job openings across its nine locations in Wisconsin and Nebraska as of mid-June. The company normally has two or three job openings, CEO Mark Lasky says. However, it’s finding it difficult to find the unskilled and skilled laborers it needs to fill these open posts.
Mark co-owns the company with his brothers, Jason and Brad, who are executive vice presidents at Sadoff.
Jason says the company is working with staffing agencies in an effort to fill these positions as well as with recruiters and headhunters, while Brad adds that Sadoff also has connected with technical schools and high schools.
Sadoff also attempts to leverage its community relationships to get its name out and the fact that it’s hiring.
Brad says the company also has used staffing agencies to provide temporary employees who have transitioned into full-time roles with Sadoff. A former temporary staff member, for instance, now runs the company’s yards in Manitowoc and Sheboygan, Wisconsin.
While the company offers a bonus to employees who refer job candidates whom Sadoff hires, the company does not offer signing bonuses to new employees. Instead, Mark says, the company tries to sell its benefits package to potential hires. This includes a 401(k) with an employer match, paid vacation, tuition reimbursement and a health and wellness committee, he says.
“When I talk to our employees for orientation, I tell them there are a couple of things that we owe them,” Jason says. “We owe them, first and foremost, a safe work environment. And, second, we owe them opportunity.”
Challenging times
In addition to effectively managing risks surrounding inventory and pricing, the fire risk associated with lithium-ion batteries is an area of concern for Sadoff, Jason says, whether at the company’s shredder or in its warehouses. “Batteries are a substantial risk because they are in everything,” he says.
Jason also points to concerns he and his brothers have regarding the misclassification of scrap as waste and related environmental regulations that could affect its movement. “Something that needs to be messaged is that scrap is not waste but something that has economic value as a commodity,” he says.
Also of concern for the company are permitting and environmental justice issues such as those Southside Recycling is encountering in Chicago as the company seeks to open a new yard in a southside neighborhood. “Some of the story gets lost in the reporting,” Jason says. “The real dynamics of what they have done to try and create mitigation in their environmental impact isn’t necessarily coming out the way it should.”
The scrap recycling industry will be an ongoing target of environmental justice advocates and civic groups because the related issues are confusing for the general public to understand, Jason says.
Mark adds that these groups “are subverting the regulatory hurdles that are in place and that have been met or exceeded in cases by the industrial companies that are doing the right thing.”
Photos by Roxanne Elise Photography
These groups also overlook the jobs and economic benefits scrap processors and retail scrap buying bring to an area and local residents, he says.
From an environmental protection standpoint, Brad says, “A lot of these benchmarks have been met or exceeded, and it doesn’t matter.”
Headwinds in the transportation sector also are of concern, “whether it’s rail and the desire for the railroad industry to keep serving our industry or lack of finding qualified drivers,” Jason says.
Brad adds that further consolidation is brewing among railroads, which could lead to more disruption in the future.
While he says Sadoff does not own a railcar fleet, it is looking into buying or renting rail cars “because of servicing issues and the railroads getting out of the scrap gondola business, specifically.”
Mark adds, “Rail is an important component for us … and we are finding that there are options. We just need to make sure that we thoroughly vet it and do what is going to be right.”
Brad says many nuances will affect Sadoff’s final determination, though he expects the company will lease cars and work with some of the mills it services.
Brad says the industry is facing a “gaggle of black swan events” that are making business particularly challenging. However, he adds, “We’re set up very well to handle many of the challenges.”
Despite the current challenges, Mark, Brad and Jason have not ruled out expanding the business. True to the company’s style of partnering with its customers, Mark says, “We like to go where our customers go. We look for growth opportunities where they make sense.”
