Carting company takes bigger haul

Action buys rivals, pushes for higher rates

By Erik Engquist


TALKING TRASH: Ronald Bergamini is expanding his city trash collection business, even as the giants pull out.

Ronald Bergamini proves the old saying that one man's trash is another's treasure. His company, Action Environmental Group, collects beer cans from Yankee Stadium and Citi Field, food waste at no cost from a senior center on West 49th Street and convicts from Midtown Community Court, and turns them into revenue, goodwill and productive employees, respectively.

Its appetite for society's unwanted applies to business deals, too: When Houston-based behemoth Waste Management Inc. decided to sell off its city collection operation two years ago, Mr. Bergamini and his partners hauled it in for $13 million. In coming weeks, Action will close on the purchase of its first two waste-transfer stations and a dozen trucks from another out-of-state waste industry giant, Republic Services Inc., that wanted out of New York City.

In the three years since Mr. Bergamini became chief executive, Action has become one of the two largest of the city's 70 or so carting businesses, not including the 180 other companies that pick up only construction and demolition debris. The Action Carting logo has become ubiquitous on trash bins across the city.

Mr. Bergamini and partner Michael DiBella rounded up private equity investors in 2007 and bought a majority interest in Newark-based Action for $7 million. The Waste Management deal nearly tripled Action's size, boosting revenues to $65 million from about $23 million. They have since edged up to $70 million, despite the worst recession in decades, and will surpass $100 million after the Republic purchase takes effect.

The Republic deal is a rarity for city haulers-few own transfer stations. For Action, it will mean simpler logistics and fewer middlemen. For the same reason, Action last year built a $5 million recycling center in the Bronx, where it separates and bundles aluminum, cardboard and other materials for sale to China. Carting is "really a logistics business," Mr. Bergamini says.

The company's growth is not without risk. New York City is a notoriously difficult place to do business, but it is especially so for carters, who must navigate additional bureaucracies established when former Mayor Rudy Giuliani and former Manhattan District Attorney Robert Morgenthau squeezed the Mafia out of the industry in the late 1990s. The Business Integrity Commission not only watches carters' every move-its review is holding up the Republic transaction-but limits what they can charge customers.

Mr. Bergamini's rapid expansion of Action Carting is a bet that the government will lift its heavy hand in the near future. "The rate cap is something that has to go away," he says. "We're banking on that going away."

If it doesn't, he'll be saddled with an operation with price limits, fierce competition and a lot of headaches.

Carters in the city cannot sign clients to contracts longer than two years, leaving them constantly vulnerable to competitors. The short contracts and price limits also make it hard for carters to add services that clients want.

Adding to carters' stress, customers here are more demanding and occupy taller buildings than in other cities, and all hauling must be done at night. It's no mystery why Waste Management and Republic, which apply their business models so efficiently in other cities, wanted out.

Defying stereotypes

Action also snapped up Sprint Recycling customers, including New York University and the Empire State Building, in 2008, when a plunge in the price of recyclables put Sprint out of business in a matter of weeks. Action protects itself from such downturns by sharing the risks and rewards of the fitful recycling market with its customers.

Mr. Bergamini, 47, lives in Bergen County, but there's no Sopranos air about him. In fact, he belies the stereotype of the garbage carter with the Italian surname. The NYU graduate is bespectacled, an attorney by trade, and something of an environmentalist. He has a teenaged son and daughter and coaches girls' soccer.

He likes to describe his company as "progressive" and can back it up. His director of sales, Joseph Burke, once struck up a conversation with a fellow airline passenger who turned out to be Judge Richard Weinberg. The judge presides over Midtown Community Court, which diverts people convicted of nonviolent crimes into job training.

Courtroom as job exchange

"We started schmoozing, and I told him about the court," Judge Weinberg recalls. "He said, "Oh, my boss would love to be involved in the court because we love to get involved in community activities.' They sat on the bench with me, met my senior staff, and they started training and hiring our folks."

Mr. Bergamini has the convicts sort trash at the recycling center for about twice the minimum hourly wage.

"He's giving people chances," says Manhattan Chamber of Commerce President Nancy Ploeger, who credits the Action chief with helping the chamber's Green and Sustainability Committee grow to include more than 200 companies. "That's just the kind of guy he is. The carting industry is notorious, but Ron is not your typical guy."