Waxahachie Businessman Turns Opportunity Into Income

One could say that Hugh Grandstaff, founder of hlh&r Metals Recycling LP in Waxahachie, Texas, has always been in the recycling business.

📅   Sat December 12, 2015 - West Edition
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After several opportunities and many years, Hugh Grandstaff started hlh&r Metals Recycling LP, a company which primarily recycles ferrous metals, including tin, long and short iron, and cast iron.
After several opportunities and many years, Hugh Grandstaff started hlh&r Metals Recycling LP, a company which primarily recycles ferrous metals, including tin, long and short iron, and cast iron.
After several opportunities and many years, Hugh Grandstaff started hlh&r Metals Recycling LP, a company which primarily recycles ferrous metals, including tin, long and short iron, and cast iron. Outgrowing the processing capacity of its old excavator, hlh&r worked with distributor 5 Point Industrial Services and purchased a Terex Fuchs MHL331 material handler with 39-ft. (11.9 m) reach. The MHL331 loads trailers for hlh&r in one-third the time it took with the excavator it replaced. The MHL331 burns 75 percent less fuel than the excavator hlh&r previously used, saving the company money each day it operates. Purpose-built for scrap operations, the MHL331 handler offers a maximum 17-ft. (5.2 m) eye-level elevation to enhance visibility and joysticks specifically configured for material handling operations. An integrated 13 kW generator on board the MHL331 handler affords more convenient magnet operation than the excavator, which required an auxiliary generator that burned more fuel. hlh&r team members (L-R): Hugh Grandstaff, Chad Smith, Billy Hunter, Mike Shows, Jesse Hill and Felipe Lopez.

One could say that Hugh Grandstaff, founder of hlh&r Metals Recycling LP in Waxahachie, Texas, has always been in the recycling business. He just took a long time off to fulfill a dream of being a pilot.

As a child, Grandstaff visited large commercial metal yards with his father, an insurance broker who provided liability coverage for recycling operations. In his 20s, Grandstaff owned an equipment repair company, and he would buy material from and sell to two local scrap dealers.

“One of the company’s owners asked me to join him in his business, my first opportunity to enter the scrap industry,” said Grandstaff.

He declined, however, interested in pursuing a career as a commercial pilot.

Over the next couple of decades, Grandstaff continued to buy from and sell scrap to local recycling companies, while he pursued and fulfilled his dream job of being a commercial pilot for a major airline.

“During this time, I had a pilot friend who was starting a marine salvage company in the Houston area, and he encouraged me to join him,” said Grandstaff.

Again, he declined, missing a second opportunity to enter the business for which he was destined.

With mandatory retirement looming, signaling the sunset of his pilot career, Grandstaff took the opportunity to help a friend with a hospital facility shut down project, where they kept anything left after disposal of the non-fixed assets. This included metal components and equipment.

“As we turned that metal into money, I discovered the profit that was involved,” he said.

About that same time, a close friend talked to Grandstaff about starting a scrapyard business. This time, he said he would consider it, which led Grandstaff to conducting a lot of research into what it takes to start a recycling company.

Due Diligence

Grandstaff took advantage of flight layovers when he was piloting, which enabled him to visit and study successful recycling facilities throughout the United States. He joined the Institute of Scrap Recycling Industries Inc. (ISRI), which, “gave us the opportunity to make connections with great companies in the scrap metal industry,” said Grandstaff.

A family operation, Hugh, his wife, Lynne, two sons — Robert and Hugh Taylor — and brother-in-law, Brian Geihl, worked through the long process of researching the requirements to open a metal recycling facility. This research paid off when a property with an office building suitable to conducting business became available in Ellis County.

“We were told it would be impossible to get a permit to open a recycling facility on the property, but ours was approved without comment,” said Grandstaff. “We have had so many good people help us along the way, including many metal recycling operations in the area.”

Growth Challenges

hlh&r began small, similar to a number of family-run recycling operations. The business began with a core of Hugh Grandstaff; his friend, Rod Baker; Lynne, who managed the office; two sons; brother-in-law; and general manager, Chad Smith. The company focused on ferrous metals, primarily taking in tin, long and short iron, and cast iron.

With the guiding principles of honesty, integrity and respect, the recycling operations thrived.

“Every industry leader I spoke with prior to starting the business, said the biggest key to success, in their opinion, was to be honest and fair, so we treat our customers with respect,” said Grandstaff.

Grandstaff pointed to one commercial customer in particular hlh&r earned due to its integrity. The customer came to him with a sample of stainless steel and wanted to make sure he was getting a fair price for his product. Grandstaff used a Niton XL2 Analyzer to scientifically determine the nickel content.

“It was 316 stainless steel, and we told him he should be getting three times the prices he was being paid,” he said. “We paid him what he deserved, and he has been a customer ever since. He has also introduced us to several new corporate clients.”

Staying true to its guiding principles and expanding its commercial customer base, hlh&r quickly increased the amount of material taken in and leaving the yard.

“We went from one truck outbound every other day to up to 12 trucks daily,” said Grandstaff. “Our number of roll-off boxes grew from five to 60 in three years.”

The pace of growth started to show inefficiencies in the type of handling equipment used at the yard. Two skid steer loaders and an excavator with grapple attachment were used to load and unload trucks and move, sort and stack material. Operators had a difficult time loading and unloading high walled trailers with the excavator.

“We also ran a magnet with the excavator,” said Robert Grandstaff, vice president of hlh&r, “which took an auxiliary generator that burned additional fuel.”

Age also was an issue with the excavator, as it had nearly 20,000 hours of use.

“In this business, you move and sell stuff to make money,” said Robert. “For that you need a reliable handler, so we had to make a change.”

MHL331 Handler

Increases Efficiency

hlh&r worked with the Terex Fuchs distributor in the area, 5 Point Industrial Services, Alvarado, Texas, to assist with handler selection.

“We conducted a thorough site evaluation and spoke with hlh&r representatives to determine the right material handler,” said Russ Miesch, sales manager of 5 Point. “They needed a mobile handler to quickly get around the property, so we recommended that they move from the excavator track drive system and go with a handler with wheels.”

There were two models that fit the profile. A Terex Fuchs MHL331 material handler offering up to a 39-ft. (11.9 m) reach, or a larger MHL350 handler that delivered higher lifting capacities, a reach of up to 52-ft. (15.8 m) and would leave more room for rapid growth.

hlh&r’s management team considered both Terex Fuchs material handler models and pitted them against other options available on the market.

“The initial price for the MHL331 handler was attractive, and its 10-year resale value was the same as competitive models but at a substantially lower cost of entry,” said Robert.

5 Points had a Terex Fuchs MHL331 handler in stock, so hlh&r tested it. One thing immediately jumped out at both Hugh and Robert Grandstaff — fuel burn.

“The MHL331 burned 75 percent less fuel than the excavator,” said Hugh. Robert added, “We were burning 8 to 10 gallons of fuel per hour with the excavator, and the MHL331 consumes only 2.5 gallons per hour.”

Everything about the MHL331 handler — size, capacity, efficiency, initial purchase price and long-term operating costs — lined up with hlh&r’s needs, so they purchased it from 5 Point. Financing for the handler was provided by Terex Financial Services (TFS).

“TFS understood our cash flow need and capital expenditure outlay,” said Grandstaff. “It was an incredibly fast, but thorough review. It was very easy to get the handler financed through them, as they understood our business and knew the equipment.”

The more hlh&r used the material handler, the more they realized just how inefficiently the excavator operated.

“We can load a trailer in one-third the time with the MHL331 handler,” said Grandstaff. “The grapple rotates to better position material inside the trailer, and our operators can see over the walls of a trailer.”

Being purpose-built for scrap operations, the MHL331 material handler offers an elevating operator’s cab.

“This machine’s standard hydraulically height-adjustable cab offers a maximum 17-foot eye-level elevation to enhance visibility,” said Kevin Chambers, regional sales manager of Terex Fuchs material handlers. “The left- and right-hand joysticks are specifically configured for material handling operations, so this also increases operator efficiency.”

The Terex Fuchs handler also delivers a longer reach and higher lifting capacities than the excavator it replaced, reducing the amount of material repositioning and the number of times it is handled.

“The MHL331 handler is used to load and unload trailers, blend and sort material, and prepare product for shipment. We use it wherever and whenever possible, and we know 5 Point will be there to support us, should any issues arise with the handler,” said Robert.

With hlh&r now operating at peak efficiency using the MHL331 material handler, the company can continue its focus on growing its operation. Hugh Grandstaff also can look forward to the day of retiring from his job as a pilot and focusing his efforts fulltime on scrap recycling. Or is it that he will be getting back to the business that’s been in his blood all his life?