Shred-Tech : Press Room

Right place, right time a bonus for shredding firm TheRecord.com - Business - Right place, right time a bonus for shredding firm.
Cambridge firm came along as U.S. toughened privacy legislation.

Chuck Howitt
RECORD STAFF

You might call it being in the right place at the right time. But that wouldn't tell the full story of how Shred-Tech boosted its annual sales to $60 million last year, an increase of nearly 300 per cent from 2000. The Cambridge-based company makes mobile and stationary machines capable of shredding up to 8,000 pounds of paper an hour. In the past 12 years, the U.S. government passed two major laws requiring in part that banks, financial institutions and health care providers do a better job of disposing of their documents. The idea was to protect against identity theft, but it also meant demand for shredding machines shot through the roof.

Yet it was more than just luck and good timing that allowed Shred-Tech to capitalize on this significant growth opportunity, says company president and chief executive officer Rob Glass. Asked to reveal the secret behind the firm's successful products, he says simply, "A lot of smart people." Armed with $12 million in research and development cash over the past seven years, a team of 15 engineering and design people at Shred-Tech has taken the firm to the pinnacle of shredding know-how today, he says. "We feel we are the technology leader."

It's difficult to argue with this boast. The company has 1,500 mobile shredding trucks on the road right now and an equal

number of in-plant stationary machines that slice up not just paper but plastics, tires, medical waste and electronic trash as well. Its machines chew up munitions for the U.S. military, auto parts for General Motors, tires in the United Arab Emirates and medical waste from hospitals. It is just now putting the finishing touches on a $135,000 shredding machine for the Ottawa Hospital Group and has sold similar machines to hospitals in Boston and New York. This year it is raising the curtain on a new parts and service facility in Los Angeles and plans to open four more over the next five years to meet its goal of being within two hours of 90 per cent of its U.S. customers, where Shred-Tech does most of its business.

Three new products are rolling off the production line this year, including its smallest mobile shredder yet, retailing for $159,000, and a beverage recycler that removes the liquid before chewing up the metal. All this has been happening with a higher Canadian dollar, which the company has coped with, says Glass, by implementing more efficient practices and shifting some of its cost base into U.S. funds. The company employs about 130 -- up from 70 in 2001 -- at two Cambridge locations. The head office on Pinebush Road houses office staff and some manufacturing functions and will grow this year with a $1.6-million addition. A second facility on Cowansview Road is where trucks are assembled and call centre staff answer requests.

Shred-Tech also has a parts and service facility in North Carolina and third-party distributors in Europe and Mexico, two key growth markets. Shred-Tech doesn't actually do the shredding itself. It sells to companies which do their own shredding or to firms wanting to get into the document destruction business. Its clients include Iron Mountain and Cintas, two large American firms involved in data protection. Mobile document shredding makes up 70 per cent of its business, stationary shredding of paper, tires and other waste, 20 per cent, and aftermarket parts and service, 10 per cent. Its products range in price from $20,000 for its smallest shredder right up to a $5 million whopper equipped with three different shredders that separates electronic waste for shipment to various recyclers.

Shred-Tech is bucking the job loss trend. It supports 200 to 300 jobs at other firms in the area which make shredder knives, gears, shafts and the like. The company is celebrating its 30th anniversary this year. Shred-Tech was launched in 1978 by local entrepreneur John Bell. It was sold to a larger American firm in 1995 before it was brought back under local ownership in 2000 when it was purchased by then-president Carol Glass. Glass retired four years ago and now sits on the company's board. Her son, Rob Glass, started sweeping floors at Shred-Tech in 1990, became chief executive officer in 2003 and now owns the company along with the private equity firm CAI.

Looking ahead, Glass expects electronic waste or "e-scrap" disposal to be a big growth area for the company. Its goals are to stay on the leading edge of technology, continue adjusting to the higher Canadian dollar and rolling out its new service facilities. The aim is to boost sales by 50 per cent over the next three years.