When the Rifkin family sold OmniSource Corp. to Steel Dynamics Inc. for $1.1 billion, the brothers signed a five-year non-compete agreement.
Guess what expired last month?
Danny Rifkin today will officially launch a new scrap recycling business, MetalX, in Waterloo. Plans call for the owners to invest well over $100 million in the next two to three years on expansion at the DeKalb County site, future acquisitions and building additional operations in other locations.
Danny Rifkin, president and CEO, expects to employ up to 250 within two years, including workers from acquired operations. The workforce is projected to reach 75 by the end of March. Pay will average more than $40,000 a year for varied positions, including general labor and heavy-equipment operators.
But it wasn’t supposed to be like this.
The Rifkins – Danny, now 58; Rick, 55; and Marty, 52 – went to work for Steel Dynamics in late 2007 planning to stay.
When we did the deal, we never really expected to leave that company, but things didn’t work out, Danny Rifkin told The Journal Gazette.
They lasted only about eight months.
That’s when the Rifkins and three top OmniSource executives reached what they described as an amicable decision to leave the company after respectful and healthy discussions on how the scrap operation would be integrated into the steelmaker.
John Marynowski, executive vice president of ferrous; Gary Rohrs, chief financial officer; and Grant Schultz, vice president of business development, also were in that group.
The longtime OmniSource colleagues formed North River Capital LLC, an equity capital firm, and have since acquired an axle components manufacturing and engineering operation, invested in excavation and oil drilling, and even dabbled in moviemaking.
White Hat Enterprises, a division of North River Capital, was the executive producer for Robot & Frank, a feature-length film starring Frank Langella and Susan Sarandon.
Marty and Rick Rifkin will join Marynowski as board members for MetalX. Rohrs and Schultz will be advisers to the company. Danny Rifkin will be a full-time employee, as will Paul Everett, a North River investor who will be chief financial officer.
We’ve had plenty of time to explore other activities and do what we’ve wanted to do, but retirement was never a viable option, Danny Rifkin said. I enjoy the challenge of business.
He also likes the idea of rebuilding a family business that can be passed on to the fourth generation of Rifkins. Danny’s son Neal, 24, is working for MetalX. His son Mark, 19, is still in school but might one day want to join the company.
That’s been a big motivator to get back in the industry: my family legacy, Danny Rifkin said. We intend to revive the kind of family culture we’re accustomed to from our past work.
As of Tuesday afternoon, Danny Rifkin hadn’t notified Steel Dynamics officials of his new business plans. He said the company could become a customer.
And we hope that they will be, he said.
MetalX has plenty of other prospects, however, including Nucor, North Star Steel, Gerdau, U.S. Steel and ArcelorMittal. The brothers hope to renew business ties with numerous former customers.
Danny Rifkin believes there’s opportunity in the market for an independent scrap provider that isn’t tied to a steel company and isn’t burdened by high capital costs.
MetalX will process scrap into a form that can be re-melted by foundries and steel mills. Materials will come from three sources. The general public will be able to cash in metal including aluminum cans. MetalX will also buy scrap from industrial sources, such as factories, and from wholesale suppliers, such as auto parts dealers and wreckers.
MetalX will open operations officially at 1 p.m. today.
Fort Wayne Mayor Tom Henry is among the elected officials scheduled to attend a ribbon-cutting ceremony. His spokesman, John Perlich, said the mayor is honored to be included.
The Mayor appreciates and respects the Rifkin family’s commitment to economic development and improving the quality of life in Fort Wayne and northeast Indiana, Perlich said in an email.
The 70-acre MetalX operation is off I-69, near the Indiana 6 exit at 295 S. Commerce Drive, Waterloo. The land was previously used for a scrap operation, but that business closed about two years ago. The Rifkins demolished what was there and started from the ground up.
The location’s advantage was that it was already zoned for a scrap operation, Danny Rifkin said.
Construction began in late June, and workers moved in Oct. 29, he said. The non-compete agreement expired Oct. 26.
The company has been receiving industry shipments but hasn’t been open to the public.