Chennai man's firm figures among fastest-growing cos in US

Chennai man's firm figures among fastest-growing cos in US

However, it did not stop him from establishing one of the fastest-growing companies in the US, a firm that trades in scrap metal and is tipped to earn as much as USD 80 million in revenue this year. Milestone Metals, the 44-year old's company could rake in USD 80 million in revenue this year and is ranked by Inc magazine as one of the fastest-growing companies in the US, The Washington Post reported on Tuesday.

It was a chance entry into this business, when a friend back home asked him to help him in get some high-quality scrap for business. Initially reluctant, Guru quickly figured out how to obtain aluminium and had it shipped to India. "He barely broke even, but saw potential and Milestone Metals was born soon after in June 2003," the daily said.

Growing demand for highways, homes, offices, factories and other parts of infrastructure in the BRIC countries -- Brazil, Russia, India and China -- was creating a big boom in the metals market. And Guru got into the business. "My friend from India was doing well, and he wanted me to buy from various scrap yards and sell to him," Guru was quoted as saying.

Guru, who lives in Fairfax started his business from a basement with a single phone line and desktop, he went on the Internet to find scrap metal industry conventions, and then started travelling to those conventions in search of people who might want to buy metal. "At the same time, he started cold calling at scrap-metal yards across the United States. By the end of 2003, he had grossed USD 800,000.

"He is constantly on the prowl for new clients, looking to turn any convention or introduction into a business opportunity," the newspaper said. Guru buys used steel, copper, brass and aluminium from about 100 scrap-metal yards across the country, negotiating a price based on the Comex Metal Exchange or the London Metal Exchange, The Post said.

Once the scrap yard fills the order and sends a photo verifying the shipment to Milestone, Guru wires payment to the scrap yard's bank. The shipments are sent to ports such as New York, Boston, New Orleans, Long Beach and Portland, Ore, and then sent on container vessels around the world. Milestone pays for shipment, which can cost USD 1,500 to USD 2,000 per container from the United States to China.

Milestone generally ships one to five containers per vessel, but sometimes sends much more. A steel shipment might include 50 containers when demand is greater. About 80 per cent of Guru's transactions are back to back, which means Milestone buys from a scrap yard and immediately sells the metal to a foundry, smelter or trader.

"We are traders, brokers and middlemen," Guru told the paper, adding that his business is booming despite recession. He had revenue of nearly USD 1 million in 2003 and 2004, and then it started to climb: USD 3 million in 2005, USD 9 million in 2006, USD 27 million in 2007, USD 40 million each in 2008 and 2009.

He is expecting to gross USD 80 million this year. "Scrap-metal traders generally earn about 3 to 5 per cent net profit margin on gross revenue. By that estimate, Guru's income this year could run into the millions -- if all goes well," the daily said.