Midland Davis Corp: Providing high-quality recycling

Source: Exec Digital USA

Date :8/13/2008 12:14:04 PM

The ability to evolve and adapt has helped Midland Davis to service its Quad City customers for more than a century.

Written by Kevin Doyle and Produce by Warren McDonald

Companies that have been in business for as long as Midland Davis Corp identify and adhere to a few basic operating principles. They also learn to adapt and survive during the tough times.

Midland Davis has its headquarters in Moline, IL. and dates back to 1892, founded by 20-year-old immigrant Louis Livingston, who began his career by picking up scrap iron with his horse and wagon, then selling scrap iron and steel to local foundries and mills. Today the company is in its fifth generation of family ownership and, according to its website, “has evolved into a quality, full-service provider in all major aspects of the recycling industry including different grades of ferrous and non-ferrous scrap, paper, plastics, and wood.”

President and CEO Marty Davis joined the company fresh out of college in 1975. His brother Mitch is the company’s vice president of operations. Sons Eric and Michael are working in the family business as well. Eric is working in a variety of positions and Michael is helping in the office during summer vacation from Miami of Ohio.

“I graduated from college on June 5 in 1975 and started work on June 12 and it took me three days to drive home from California,” Davis says, chuckling at the memory. “I had worked there during the summers, but it’s just not the same. I was out in the yard, although the last summer I was in the office doing accounting, so I got a better understanding.”

“We are now the fifth generation of the same family. My son is grown up and full time. He went to college, did some other things, but eventually came back here,” Davis says.

Tried and true

Longevity has its advantages. Most importantly, Davis says, “it certainly gives anyone we talk to the assurance we have staying power. We only have one customer who’s been in business longer than we have.”

A few basic philosophies have become the company’s gospel. “First and foremost is our service and we‘ll stand on our record. We tell everybody that we’ll provide the best possible service at a fair market price. We’re probably the only company in America not charging a fuel surcharge right now,” says Davis.

The company also provides Saturday and Sunday service as needed without an overtime surcharge and routinely goes the extra mile in order to accommodate the specific needs of individual customers.

What they do

Midland Davis has three locations. The original facility services the Quad City metro area on the Iowa/Illinois border, which has a population of approximately 350,000. The company processes scrap products including iron and steel, paper, aluminum and wood. The second processing facility is located in Pekin, IL. This services the central Illinois region. It also operates a paper brokerage division located in St Louis, MO.

The largest of the company’s three locations is in Moline, IL and includes both the corporate offices a scrap iron yard and paper recycling plant. According to the company website, “The Moline operation processes both ferrous and non-ferrous scrap. It’s equipped with cranes, shears, bailers, torch cutters and sorting conveyors and … has several pieces of equipment unique to Midland Davis.”

“We’re kind of the picker-upper and cleaner-upper. We pick it up at a customer site, bring it back for processing. When we ship a product to a paper mill, steel mill or foundry it is clean and ready to be melted or pulped. Our process is densifying the product. We’ll clean it, cut it, sort it, bale it or torch it. Inevitably we make it small so that it can be processed more efficiently,” Davis says.

In essence, Midland Davis is the middleman. “Our role is finding the best buyer for a seller and to get the best price we can. In many instances, we’ve been able to do better for customers who thought they were getting the best price by selling direct to a mill. We bring together the best match of seller and buyer,” Davis says.

Davis says the key to the company’s success has been its ability to buy material and service it properly. The core business remains the steel and iron business “with customers who have been with us for a long time.”

Evolving and surviving

“We’ve accomplished a metamorphosis of changing without losing our core values or business,” Davis says with more than a hint of pride.

“In the early 1980s, everything was going to Hell,” Davis says bluntly. “The Midwest economy was shrinking, not growing. We went from processing 7,000 to 8,000 tons per month of scrap iron with 50 employees to 3,000 tons with 15 people working 32-hour weeks. I can remember the headline in one paper said ‘The last person leaving the Quad Cities, please turn the lights out’. It wasn’t pretty.”

Davis says, at one point, he was convinced he and his brother were going to have to shut down the business after four generations. Instead they executed a remarkable turnaround and have been moving forward ever since.

Paper waste from newspapers, supermarkets, the industrial community and local printing companies – saved the day, and the business.

“People dispose of paper products every day, so we started picking it up and processing it. We worked hard to get back to and exceed where we were at in terms of tons processed and employment (now 120),” Davis says.

The evolutionary process continues. Three years ago the company started a paper brokerage division.

“We weren’t really planning on doing this but an opportunity presented itself. We looked at the numbers and saw there was very little downside risk. We were selling to brokers at the time and paying out a commission. We knew we would be our best customer and that what we were paying out in commission would pay the salary of the person who would be running this. We began with one broker and one customer service representative selling and handling 2,000 tons per month. This has grown to three brokers with four customer service representatives selling and handling 15,000 tons per month. We never looked back and now we sell more paper than iron, aluminum, copper and brass combined,” says Davis.

The company also developed a procedure using a mobile tub grinder to process throwaway wooden palettes. “Now we have two grinders and we can reduce what used to be 10 loads to the landfill down to one load. The customer saves money. Or we can grind it here and save them 50 percent on their waste disposal,” Davis explains.

Midland Davis also just signed a 10-year contract with the city of Moline to do curbside recycling. “We have three trucks working every day and every single resident sees our name every day,” Davis says.

Market protection

The company owns and maintains a fleet consisting of 30 trucks, five rear load trucks, hundreds of roll-off containers and hundreds of trailers (open top and van trailers). Six employees work in an on-site maintenance shop that Davis says “can do most of the necessary work.”

The company experiences minimal employee turnover, reducing the need for redundant training. “Many have been with us for 15 to 20 years. We work Monday through Friday and Saturday is a regular day for paper recycling,” Davis says.

And, unlike the 1980s, this economic downturn has not impacted the region. That is directly attributable to the production of corn for use in the development of ethanol-based alternative fuels.

“We’re kind of opposite of the economy right now. We’re kind of in an insulated shell and all the customers we do business with are busy as well. We’re seeing the highest prices we’ve ever had for our commodities, ferrous especially,” says Davis.

That should help pave the way for a sixth generation of the family to provide the quality service Quad City customers have come to rely on.