Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, July 30, 1993                   TAG: 9307300179
SECTION: BUSINESS                    PAGE: A-5   EDITION: METRO 
DATELINE:                                 LENGTH: Medium


To be successful in the '90s, Jack Smith said, a new business needs to do four things: tap into the computer and communications industry, thrive on new technology, be environmentally sound and have a presence in all corners of the globe.

That's not an expected line from someone in the junk business.

"What we have here is Fred Sanford with a Ph.D.," said Smith, marketing director of Salem's R. Frazier Inc. The company recently leaped into the global marketplace, becoming one of the world's leading high-tech junk firms.

Smith uses phrases such as "end-of-the-line asset management" and "nonperforming investment recovery" to describe what is essentially a recycling graveyard for discarded computers and telecommunications equipment.

With offices in Scotland, Costa Rica and China, R. Frazier is calling itself the only company in the world that can offer full-service recycling, refurbishing and parts recovery for office equipment on an international scale.

"There's nobody else we know of that does this," Smith said.

The environmental problem many companies face in disposing of outdated computers is that they contain hazardous mercury switches and poisonous batteries that no longer can go into conventional landfills.

By becoming experts in rebuilding some old computers and scrapping others for their valuable parts, R. Frazier proves that one man's garbage is another's treasure.

"Look at all that gold," Smith said, leaning over a cardboard box full of gold-circuited computer panels gutted from telecommunications equipment. "There's got to be $100,000 worth just sitting right here."

Smith's manic side was up Thursday as he toured his company's warehouses full of copper wire computer entrails and refurbished monitors packed to the ceiling in boxes headed for Russia and China. He pointed to figures from a recent study by Carnegie-Mellon University that estimates people will have discarded 150 million obsolete computers across the country by 2005.

"This is where old mainframe computers come to die," Smith said, opening the door to a gymnasiun-sized warehouse crammed with hundreds of the 1,200-pound computers. "We strip them. I mean we take everything from them, down to the last screw."

R. Frazier makes 90 percent of its profit, he said, fixing up old computers. It sells them to companies in developing economies that are happy to get American technology that's only a few years old. If the computers aren't usable, the working parts are salvaged and recycled for scrap metal and plastic.

Randy Frazier, the chief executive and founder, said his secret for success is offering clients, such as the major U.S. computer manufacturers, the environmental security of breaking down machines to their smallest scraps. Other companies in the same business take only the most profitable parts from the machines and toss the rest in a landfill.

Even though R. Frazier earns just 10 percent of its profit from recycling plastic, aluminum and steel from scrapped machines, it's that service that keeps clients coming back, Frazier said.

Frazier shows each client a summary of what happened to his or her hardware. On average, he said, 98 percent of each machine is recycled.

That summary is, in many cases, used by Frazier's clients as proof to the Environmental Protection Agency that their machines have been disposed of properly.

Frazier said he recently closed a large contract with an international client demanding a guarantee that his company could handle its machine disposal all over the world. That was a major step in developing international offices, he said - his next target for expansion.

The trouble is keeping his company's growth to manageable levels. Founded in 1988 with eight employees, the company grows about 25 percent annually. Frazier now has 75 employees and sales of about $15 million last year. Planned are operations later this year in Texas and Nevada.

Frazier said he expects to add about 25 people in the next 12 months. He emphasized that he's financially conservative, reinvesting company money rather than going into debt.

"We could grow a heck of a lot faster if Randy would let me," Smith said, adding that R. Frazier's employees are paid based on performance. "I could have doubled this entire business just with my trip to California last week."

"The warehouses are bulging at the seams," Smith said. "The supply out there is limitless. I mean, who would ever think about getting rich off junk?"

 by CNB