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Tenenbaum’s Sale Marked End of 128-Year Family FirmLock Icon

6 min read

The sale in August of the Tenenbaum Recycling Group of Little Rock marked the end of a 128-year-old family business in Arkansas.

The scrap metal recycling company, with 10 locations in Arkansas and Missouri, is now a division of Alter Trading Corp. of St. Louis, which bought TRG for a price the companies did not disclose.

“And those are our long-term plans to continue to” be a part of the division, said Jack Grundfest, who was the president and CEO of TRG but now has the title of vice president of operations at Alter. “All of the employees that we had previously … are still involved in the company.”

Being a part of Alter Trading gives TRG “access to a lot more resources and access to markets that we didn’t have access to before just because of their size and their offices,” Grundfest said.

About 10 years ago, Alter opened an office in Hong Kong. “We found with our sheer size and the amount of scrap that we ship over there, that it was important for us to have a presence there 24 hours a day in order to make the trade,” Michael Goldstein, the vice president of operations for Alter, said last week.

The St. Louis Business Journal reported in May that Alter’s estimated revenue for 2017 was nearly $2 billion, an increase from an estimate of $1.3 billion in 2016.

TRG had slightly fewer than 300 employees when it was sold. Alter, which also has a history dating back to the 1890s, has about 1,600 employees. The TRG purchase brings the number of Alter’s locations to more than 70.

TRG was a subsidiary of the privately held A. Tenenbaum Co. of North Little Rock. Founded in 1890, the company ranked No. 46 on Arkansas Business’ most recent list of the state’s largest private companies with 2017 estimated revenue of $225 million, the same amount as in 2016.

“This year has been a better year for our companies than the several previous years,” Grundfest said of 2018.

The U.S. Geological Survey estimated that 66 million metric tons of iron and steel scrap were processed in the United States in 2017, according to the 2018 Recycling Industry Yearbook by the Institute of Scrap Recycling Industries of Washington. That’s up from 53 million metric tons in 2016.

The United States’ trade war with China, however, has been feelt in the scrap metal industry, Grundfest said.

“It really hasn’t affected us as far as steel is concerned,” he said. But the markets for nonferrous metals — essentially all metals that aren’t steel — have been difficult because “China has been an off again-on again market,” he said in an email to Arkansas Business. “And we are having to develop new markets for nonferrous domestically and in other parts of the world.”

As the markets shriveled or disappeared for some of the nonferrous products, “we were forced, in some cases, to adjust our processing to derive new products to satisfy new markets,” Grundfest said in the email. “However, as markets move over time and the countries we export to change, we have adapted and will continue to adapt our products to satisfy our consumers.”

Robin Wiener, president of the ISRI, said in a statement to the Senate Recycling Caucus on Nov. 14 that China’s actions “over the last 16 months placing restrictions on the import of scrap have sent such large tremors throughout the U.S. recycling infrastructure.”

He said scrap exports to China have fallen approximately 40 percent during the first eight months of this year. “And that is only expected to grow,” Wiener said in the statement, found on the ISRI website. “The Chinese government has set a priority the growth of its own recycling industry with a goal of becoming self-sustaining.”

The Business
TRG and Alter acquires all types of metals, from aluminum to steel, to process.

“If there’s scrap metal being produced, we’ll buy it,” as long as it complies with state laws, Alter’s Goldstein said.

Harold Tenenbaum

The recycling process for the material involves sorting and shredding, which is similar to using a rock crusher. The main source of the scrap metal is automobiles. Alter operates 16 auto shredders in the country, which Goldstein said was the most of any scrap metal company.

From there, the material can be sold.

The prices for steel and other metals are difficult to predict, though.

In fact, TRG didn’t do any forecasting, Harold Tenenbaum, then the owner, told Arkansas Business in 2005. “This business has cycled for years,” he said. “You have to be ready for the good times … and when it turns sour, hopefully you break even.”

Founded in 1890
Harold Tenenbaum’s great-uncle, Abraham, began the company in Little Rock in 1890.

Abraham, who had emigrated from an area near the border between Germany and Poland, sold the company to his brother, Julius. Julius ultimately sold the company to his son, Joe, who was Harold’s father.

The scrap metal company was first located on the Arkansas River in Little Rock, at the base of Rock Street where the Riverfront Amphitheater now stands. Harold Tenenbaum, back from the University of Oklahoma, opened the North Little Rock yard in 1971, and a federally funded Urban Renewal program sent the offices to North Little Rock in 1976.

Joe Tenenbaum preferred fishing to working, Harold told Arkansas Business in 2005, and left the scrapyard’s oversight to Harold.

Harold Tenenbaum had only a basic knowledge of the financial side of the family business, but suddenly he was in charge. Fortunately, he said in the article, “I’m smart enough to surround myself with people who are very smart.”

The company continued to grow. In 2009, it opened a recycling center in Hot Springs, adding to the portfolio of locations in North Little Rock, Harrison, Jonesboro and Berryville. In 2011, it expanded into northwest Arkansas, opening a scrap metal recycling plant in Rogers.

“Having a facility in northwest Arkansas furthers our objective of serving the major markets throughout the state,” Grundfest said in an 2011 Arkansas Business article.

Family Connections
About two years ago, the Tenenbaum family started thinking about selling the company sometime over a decade, Grundfest said.

But no efforts were made toward that end until Grundfest was contacted by Alter’s Jay Robinovitz, who in January was promoted to CEO. Alter asked Grundfest about possibly selling the company.

The Tenenbaum family and members of the Robert Goldstein family, who own Alter, have been friends for decades, said Michael Goldstein, a fifth-generation family member in the Alter business.

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Robert Goldstein joined Alter in 1977 and remains its executive chairman. The Goldsteins and Tenenbaums would run into each other at scrap metal industry conventions or other meetings over the years, Michael Goldstein said.

So when the purchase offer came up, “I felt like it was something that our shareholders might be interested in,” Grundfest said.

And they were.

Grundfest, who worked at the Mitchell Williams Selig Gates & Woodyard law firm in Little Rock before joining TRG in 2006, said the transaction went smoothly. “I would say from my previous legal career and the number of transactions I’ve been involved in, I would say this was particularly amicable,” he said. “And I think everybody is happy with the results so far.”

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