Masters of the Midwest: A Profile of Rumpke Consolidated CompaniesMasters of the Midwest: A Profile of Rumpke Consolidated Companies
Rumpke Consolidated Companies has found success by eschewing national expansion, instead focusing on becoming master of its regional domain.
November 4, 2012
Rumpke Consolidated Companies Inc. is a formidable waste and recycling force in the Midwest, and they rank as the 10th largest company in the Waste Age 100.
Not bad for a family that started out as pig farmers.
During the Great Depression William F. Rumpke owned a junkyard and coal supply business in Cincinnati. "People used to barter things. One day he came back with six hogs, " says Bill Rumpke Sr., chairman, president and CEO of the Cincinnati-based company, regarding his father. "The nephews were sent out to get garbage from restaurants to feed the animals. Eventually Dad said, 'maybe we should start charging for this.'"
Today Rumpke has revenue of nearly $500 million and employs more than 2,200 people. It operates nine landfills and 11 recycling processing centers in Ohio, Indiana, Kentucky and West Virginia. It also runs firms supplying hydraulic parts, portable restrooms and sustainable solutions for general businesses.
"Rumpke is a very solid regional player," says Michael Hoffman, director of research for Memphis-based Wunderlich Securities Inc. "They've made a successful generational shift. They're an integrated landfill and recycling company with a dominant presence in many markets they serve, and effective in markets where they're not dominant, such as Cleveland."
The Rumpke vision is to hold the course they've long pursued. "We want to continue to grow and build density within our own footprint, " says Bill Rumpke Jr., chief operating officer. "We want to continue to get the most out of our current assets – our recycling facilities, our landfills and our hauling company – and be the total waste solution for our customers. "
"And do it as cheaply as we can so we can go out and compete anywhere and knock the competition out of box, " adds Rumpke Sr.
But the Rumpkes are content being a big fish in a relatively limited Midwest pond. "At one time I had the vision to be all over the country. It's not so much in my brain any more, " Rumpke Sr. says. "It doesn't mean we'd only look here, but we probably wouldn't want to stray too far out of the Midwest, and probably wouldn't enter an area if we didn't have a good solution for all three parts (recycling, landfills, hauling) in those areas," adds Rumpke Jr.
In an industry noted for its family businesses, few companies can match the Rumpkes. Four generations now have worked for the business, with more than 100 Rumpkes at the company now. The ages range from Rumpke Sr. at 72 down to 20. Rumpke Sr. says times have changed from when the older generation taught the younger generation how to work on trucks with no age restrictions. "From year to year, generation to generation, interest grows, father to son, father to daughter, " Rumpke Sr. says. "Hopefully we can keep it going. "
But that doesn't mean it's a cushy job. There are high expectations for the Rumpke family, Rumpke Jr. says. "If you work here you're held to a higher standard than employees who aren't related. "
Being a regional family player and not a sprawling corporation suits the company, Hoffman says. "I don't think they aspire to be anything more than that. That's the beauty of this business – you don't have to be big to be successful. "
After growing up in the business, Rumpke Sr. and his cousin Thomas Rumpke bought the company from their fathers in the 1980s and promptly went on a buying spree, acquiring more than 200 haulers. And it grew into other areas as well.
The company had been recycling since the 1940s and World War II, but its efforts really took off in 1989 when the company formed its recycling division. Steve Sargent headed up the operation at that time, and remains director of recycling. The division started focusing on residential customers but quickly expanded to handle commercial and industrial business, he says.
Today Rumpke Recycling processes more than 250,000 tons of material. Most recently the company spent more than $13 million to rebuild its Columbus, Ohio, recycling facility from the ground up.
Two of the biggest developments Sargent has seen since then are the technology changes and the company's response to markets. "And both have been challenging at times, " he says.
One example of Rumpke's market response was in residential glass. Because 15 to 20 percent of the glass it was getting was of inconsistent quality, the company invested in a glass processing business, which now makes glass cullet suitable for the production of fiberglass insulation, and container cullet that can go into new bottles. "That's very unique for a waste disposal and recycling company to take that extra step and develop the markets," Sargent says. "Recycling is an integral part of our service, but markets must support that."
In his time with Rumpke Sargent has seen recycling markets change dramatically from a primarily domestic business to a world market, and that's required the company to adjust how the material is prepared. An example of that is the installation of processing and baling equipment to meet minimum weights for loading intermodal shipping containers Rumpke uses in the Midwest.
Single Stream of Consciousness
The other big challenge to consider has been technology. "We have got to provide a cost effective alternative to waste disposal, and the only way to do that is with technology," Sargent says. "We have to work on ways to drive down the costs to process, and I think we've done that."
Single-stream recycling has been a big part of the solution for Rumpke. Sargent says single-stream has "revolutionized our business, " but it also has presented challenges. "At first we were hesitant. But we have been able to figure out and design systems that can produce quality products. " An example was at Rumpke's Columbus facility where the company invested a good deal of money and engineering to produce No. 8 newspaper, "which is a better quality newspaper. We added more screens, more sorting stations, lengthened the presort areas."
He says the company has emphasized being vertically integrated with its businesses and it has been an aggressive innovator in recycling. Rumpke has operated a front-load single-stream program for more than 10 years and pioneered a drop-off program in Columbus. The company has expanded that program into rural applications, "which opens up the capability of recycling to more of our customers."
In addition to developing recycling markets, Sargent is proud that Rumpke has been able to bring recycling to a lot of geographic areas that it services with a regionalized approach, using transfer stations to feed larger, more remote facilities. "You can't build multiple large-capital facilities and grow your system. It's not cost effective, " he says.
Rumpke suffered a fire at its St. Bernard, Ohio, recycling facility earlier this year that Sargent called "devastating, " but with Rumpke's infrastructure the company didn't miss a beat on service and processing.
A larger challenge though for Sargent is the lingering perception "that there is a magic box to recycling that we can dump everything into some new technology and it comes out as perfectly clean material to sell. We're working on that but we haven't seen that. It has to be cost-effective to compete with costs for disposal."
Commercial recycling is the next big challenge for Rumpke. Sargent sees it as far behind residential recycling. "If tipping fees are low, diversion savings for a business may not be there. So how do we as a business promote recycling? There is a tremendous amount of commercial recyclables still available in that commercial waste stream."
The two keys to recycling that Sargent sees are education and accessibility. "You can't do one without the other," he says.
Hot Dogs and Garbage Trucks
Much of the education burden falls on Rumpke's communications department. "The company feels very strongly about promoting and being transparent to the public. And not being afraid to share information, " says Amanda Pratt, director of corporate communications.
The company's huge landfill in Colerain Township outside Cincinnati had population subsequently develop around it. The landfill's very active and visible. Rumpke gives tours of the landfill every week as well as at its other landfills and recycling centers, "to educate the public about what we do, " says Pratt. Rumpke has 10,000 visitors a year to its facilities.
Rumpke also began doing open houses on a Saturday with kids' games, hot dogs and ice cream, and chance to get your picture taken on a Rumpke truck. "We try to make it a fun family event, " she says.
The company has developed a website highlighting its green practices, video of operations, blogs about aspects of the business, social media and a speakers bureau. "A lot of negativity is just from the fact that people don't know what we do in our industry," she says.
Rumpke Jr. stresses community relations with its facilities. "We become part of the community where we're at," he says. "We understand we're right in the middle of a community so we have to be a good neighbor."
Rumpke's landfill operations have evolved from the emergence of Subtitle D to a push today to take advantage of their renewable energy. Rumpke emerged as a strong survivor after the landmark 1976 Resource Conservation and Recovery Act (RCRA). "It got rid of a lot of competition, a lot of small haulers; they couldn't keep up, " Rumpke Sr. says. "It made us seem more professional. We made it our business to survive."
Today the Colerain Township landfill is the sixth or seventh largest in the United States, handling two million tons of waste last year. It survived a major landslide 16 years ago. It also features the largest landfill gas to pipeline system in the country, producing 15 million cubic feet per day that provides gas for 15,000 homes, says Jay Roberts, director of engineering and environmental affairs for the company. In addition, Rumpke operates a landfill gas-to-energy (LFGTE) facility in Kentucky and is looking at other opportunities.
"We see a great opportunity in the future to take the landfill gas and find a beneficial reuse for it," Roberts says.
Collecting the gas from the landfill can be difficult at times, however, and sometimes Rumpke isn't able to extract "as much gas as we might have expected."
Rumpke is emphasizing green services for its future, but landfills will remain a big part of the mix. "We have to maintain airspace, although volumes are coming down a bit because of recycling," Rumpke Sr. says. "We still have to have a place to put it in the ground."
Rumpke also is bullish on alternative fuel trucks. The company has 10 com- pressed natural gas (CNG) trucks, will add 11 more this year and 30-40 after that, Roberts says.
The impetus is coming from customers and from within. "We're trying to get ahead of our competition," Rumpke Jr. says. "It's a money saver too," adds Rumpke Sr. on the cheaper fuel.
Keeping in compliance and managing the increased cost of leachate disposal continue to challenge the company's operations. As a landfill guy Roberts would like to see organics in the landfill, but concedes it's not always the best choice. "You have to look at it holistically and the cost and the greenhouse gas impact, with less trucks [required to transport organics separately]."
The Rumpke Evolution
Talk of the evolving ton and how secondary markets are changing the composition of that collected ton of waste will help mold the industry in the future, Hoffman says. "With Rumpke, no question in my mind, this will be a company that will evolve as industry will evolve. It's a family business that'll be there with everyone else as the ton shifts."
"Going forward we'll be the best we can be at what we do, " Rumpke Sr. says. "There will be more acquisitions, we'll slowly grow. " Rumpke Jr. says the company will continue to be privately held, push business integration and be a total waste service supplier for its customers.
"Things that happen out there will tell us where to go, " Rumpke Sr. says. And it will remain a family business – which remains integral to the entire company culture. "Everyone else thinks they're a Rumpke anyway," Rumpke Sr. says. "And that's OK. That's the way we want it."
Allan Gerlat is News Editor for Waste Age and waste360.com.