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Indiana-Based Company Opens Recycling Facility in Mid-Atlantic: Industrial Pallet Turns to Trace Equipment for Expansion Plant
Industrial Pallet: Indiana-based company looks to a trusted supplier, Trace Equipment, to equip new pallet recycling plant as it expands operations into the Eastern U.S.

By Tim Cox
Date Posted: 7/1/2006

GREENCASTLE, Penn. – When Industrial Pallet Corp. looked to expand and open a new plant, it went by the adage, ‘If it ain’t broke, don’t fix it.’

    To start up the new pallet recycling operations, the company looked to a proven, trusted supplier that it already had a business relationship with – Trace Equipment. The company’s new equipment is dominated by the Trace nameplate.

    Although Industrial Pallet has more than doubled in size in the last five years, the company’s owners and managers were not necessarily viewing further expansion. However, they eventually responded to the entreaties from a major customer.

    Rob Meister, president and CEO of American Fibertech Corporation, (AFC), the parent company of Industrial Pallet Corp., integrated the company to control costs, offered service that customers could not get from other suppliers, stayed ahead of the curve in terms of new products and business opportunities, and hired and retained employees who are committed to success.

    For example, the company quickly moved into the market for supplying heat-treated pallets, investing in Kiln-Direct heat-treating equipment in 2002.

    American Fibertech’s operations are fully integrated; the company starts at the stump and takes the wood to the finished pallet. It operates a sawmill and resaw operations, several pallet manufacturing and recycling plants, a wood waste recovery center that produces colored mulch, and its own transportation fleet, AFC Logistics Inc.

    Industrial Pallet was founded in Remington, Ind. in 1986 by Jon Schwab, a farmer who developed the company into a major supplier with more than $11 million in annual sales by 1998. Jon brought Rob aboard that year, then began to curtail his direct involvement in the day-to-day operations of the business. Rob was named president and CEO in 1999 and manages the company along with chief financial officer Jay Wiegand. Jon remains chairman of the board of directors, and the three men own the business jointly. American Fibertech has continued to grow and now has annual sales of almost $30 million.

    The company’s new plant in Greencastle, Penn., began operating in December 2005; it is the fourth pallet plant of AFC. The facility is located in south-central Pennsylvania, roughly mid-way between Chambersburg, Penn. and Hagerstown, Md. The plant building is situated on about five acres, and the building contains 50,000 square feet.

    Jeff Deike joined the company in September from a different industry and was charged with getting the new plant up and running. The newest Industrial Pallet facility employs about 35 workers, whom Jeff referred to as ‘associates.’ The figure includes six employees who work off-site at customer distribution centers, sorting pallets for the customers on-site. About 25 employees are directly involved in pallet recycling operations in the Greencastle facility, and the other employees include managers, office staff, and truck drivers.

    Industrial Pallet started operating strictly recycling pallets, but the plant also has recently begun to build remanufactured pallets from recycled lumber. The company currently does not use any new lumber to build or repair pallets, but that likely will change in the future, Jeff indicated.

    “The reason we are here,” Jeff explained, is at the request of a customer the company already was doing business with in Indiana – a national retail chain. The customer was experiencing pallet issues at its distribution center in Maryland, according to Jeff, and it had discussions with Industrial Pallet about starting an operation in the East to service that facility. After several discussions among the owners and management team, Industrial Pallet decided to launch a new plant to provide additional service to the customer.

    The plant is set up mainly for sorting and repairing used pallets. It is equipped with two Trace Equipment bandsaw dismantling machines to disassemble pallets into usable lumber. The used lumber is conveyed directly to a Trace Equipment trim saw to be cut to length. The plant also is equipped with a pop-up saw and another trim saw from Trace Equipment to cut boards to length.

    The company’s twelve pallet repair tables also were supplied by Trace Equipment. They feature a crowned surface to make it easier to spin the pallet, and each table is also equipped with a pneumatic-powered lead deck board remover.

    The plant has two repair lines. There are eight repair tables along one line and four on the other. The lines consist of a two-tiered conveyor system supplied by Industrial Resources. The bottom conveyor carries finished pallets to the end of the line to a pair of stackers; the top conveyor carries scrap material in the opposite direction to a waste hopper.

    Incoming pallets are sorted prior to being taken to the repair tables, so the repair workers generally are working with one type or grade of pallet at a time. At the receiving dock, the pallets are unloaded from the trailer vans and placed on inclined gravity rollers. The rollers are about 18 feet long, and there are five lanes. The forklift driver keeps placing half-stacks of pallets on the gravity rollers. At the other end, three associates are sorting the pallets. As a stack is removed, another stack rolls down the incline to the sorter. The associates doing the sorting have seven lanes of flat rollers on which to place the graded pallets; they simply push a stack down the rollers, and at the other end the forklift operator picks up stacks and takes them to the repair line. The company currently processes about seven or eight loads of pallets daily, about 3,000-4,000 pallets, and recycles about 2,000.

    The sorters segregate the pallets into stacks for several grades of GMA-size pallets. Four types of #1 pallets are sorted out and two types of #2 pallets. Special custom sizes for certain customers also are sorted out. The pallets are sorted regardless of condition, whether it will be a ready-to-go pallet or needs repair. The only exception is odd-size or scrap pallets, which are set aside to be taken immediately to the dismantling area. With this method, each recycled pallet is inspected twice, noted Jeff – once by the sorters and again by a worker on the repair line.

    The sorters and builders are paid an hourly wage, but a quota system determines their wage. New associates are on probation for 90 days. Then the company determines if they can sort or repair pallets at a quota rate, and they are paid accordingly. The builders work on a designated grade of pallet, such as No. 1 or No. 2. Industrial Pallet normally has about three associates rebuilding No. 1 pallets and about four working on No. 2 pallets.

    The company recently bought three Bronco Pallet Systems semi-automated nailing systems – the only used equipment in the plant — to assemble remanufactured pallets. The Broncos consist of an inclined jig to hold the pallet parts, a pneumatic nailing tool suspended overhead from a holder, and an automatic stacker.

    The company uses Apache pneumatic nailing tools and Magnum collated nails throughout its operations.

    Scrap material is processed by a Cresswood hopper-fed grinder. The electric grinder is a low-noise machine so it is located in the plant. The grindings are conveyed out the building to open-top container trailers. They are sold a business in Pennsylvania that removes the scrap metal and processes the grindings further into colored mulch. Industrial Pallet generates about three or four loads of grindings weekly.

    Industrial Pallet does not currently have a dedicated sales staff for its new Pennsylvania plant.  For the time being, sales are handled by the corporate sales staff.

    Most of the accounts for the new plant are located within a 50-mile radius. Customers represent a variety of industries, including grocery, nursery and landscaping, hardware, heavy industrial, and consumer products.

    AFC Logistics Inc. has 50 late model aluminum plate trailers and three semi-tractors dedicated to the Greencastle plant and can provide ‘drop and hook’ pallet retrieval service to customers that require it.

    It obtains pallet cores mainly from about 20 different customers, and has various arrangements with them. “Every business is different,” said Jeff. He was able to save one customer $25,000 per month – the amount it was paying to landfill surplus used or scrap pallets.

    The company’s facility is located near two major interstate highways, one headed north-south and the other, east-west. The strategic mid-Atlantic region is home to a large number of distribution centers, said Jeff. “We’ve barely touched the tip of the iceberg,” he said.

    Industrial Pallet puts a strong emphasis on servicing customers with on-time deliveries and pick-ups, said Jeff.

    Short-term, the company expects to add a second shift to the recycling operation in about a year. Long-term, the company has tentative plans to expand into producing colored mulch and also production of new pallets.

    Jeff previously worked for Fleetwood, which manufactures coaches, recreation vehicles, travel trailers and other products, for 25 years, starting as an electrician and working his way up into management.       

    Managing the Greencastle plant is Jeff’s first experience working in the pallet industry. “I figured if I could frame a travel trailer, I could frame a pallet,” he said. “It’s a learning experience. There’s more to this than I thought.”

    Based on the performance of its recycling equipment and its satisfaction with the vendor, the company turned to Trace Equipment to set up the new location in Pennsylvania. Personnel in Indiana – including Rob and plant manager Mike Madison — designed the lay-out of the new plant and ordered the equipment.

    Jeff said he has benefited from strong support from corporate headquarters. “They’ve done nothing less than 100 percent support us here,” he said.

    “It’s a great company to work for,” he said, and a good business opportunity. “I feel very at ease with this business, and I’m looking forward to the future.”

    Trace Equipment supplies machinery and equipment for pallet recycling and manufacturing operations. The company specializes in pallet recycling machinery, including both bandsaw and disc pallet disassemblers, automatic trim saws, conveyors and rotating tables, and tables and jigs for repairing and building pallets. The company also supplies notching machines, chop saws, cut-off saws, and more. Trace Equipment can provide plant layout service and also complete pallet recycling systems. The company also offers used equipment for sale.

    For more information, call Trace Equipment at (877) 778-7223 or visit www.traceequipment.com.

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