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Obstacles Donít Stop Pennyrile Pallets
Pennyrile Pallets LLC: Family-owned pallet manufacturer and sawmill overcomes obstacles with the right people and a willingness to try new things.

By DeAnna Stephens Baker
Date Posted: 9/1/2013

Crofton, Ky. – During the past few years, Pennyrile Pallets LLC has dealt with a devastating fire and having its largest lumber supplier shutdown in addition to the economic troubles felt by the entire industry. The company has survived and grown by trying new ventures and having the right people to help the company overcome challenges. 

                Pennyrile Pallets was started in 1983 by brothers Alton and Marvin Yoder building pallets by hand for another pallet company. This year Pennyrile Pallets is celebrating its 30th anniversary under the ownership of the second generation, Melvin Kauffman, Alton’s son-in-law, and Leland Yoder, Marvin’s son. The automated pallet line produces both hardwood and green pine pallets, supplied by on-site sawmill and cut-up operations.


Overcoming Fire Damage and Disruption

                A fire in August 2003 destroyed the nailing building and warehouse full of pallets. The cut-up line, housed in a separate building survived unscathed. The company assembled pallets by hand for several months in a rented space as it worked on rebuilding and acquiring new equipment. Pennyrile did not lose any customers during the time that production was low because other mills worked with them to ship the pallets needed to fill orders.

                “It was just a very strong community effort from the pallet community,” said Kauffman. “It was just amazing what was accomplished for us.”

                Thanks to a lot of help from others, Pennyrile Pallets was back in production less than three months after the fire. Despite the losses, Kauffman said that he believes the fire happened for a reason and was an experience that taught them a lot.

                “There are things that God allows to happen in people’s lives,” said Kauffman. “And those things are always for our benefit. It could be good things that we look back and are happy about and it can be disappointing things that we can learn and grow from. So to accomplish this we are very, very grateful to God and to the many, many people who contributed to helping us find equipment and rebuild.”


Responding to Lumber Industry Changes

                A few years later, the company faced another hurdle when its largest lumber supplier went out of business. Kauffman and Yoder considered different options but decided to put in their own mill and started production in 2008. A lot of the credit for the mill setup belongs to Mahlon Graber, the sawmill manager, Kauffman said.

                “He has considerable experience in sawmilling and came along just in time,” Kauffman said. “He helped us overcome quite a few obstacles as we were relatively new to sawmilling. He played a big part in helping us get established in the sawmill industry.”

                Initially the mill cut only pallet cants but has increased production by adding some equipment and has grown considerably. Today the mill operates as Pennyrile Sawmill and is leased and run by Graber. It’s main focus is still providing cants for the pallet operation although it also cuts rail ties and grade lumber.

                It’s having Graber and other people like him that have helped Pennyrile Pallets overcome the troubles it has faced and improve its operations, according to Kauffman.

                “We’ve had some hurdles to work through, but we’ve had the people here at the time we needed them to help us work through them,” said Kauffman. “We certainly shouldn’t have all the credit for doing this. We have people here who have been strong in helping us.”

                Beyond his help starting the sawmill, Graber also had the idea to design a board accumulator that handles the random width cants produced by the mill. He worked with Keystone Machinery in Ephrata, Penn. to design and build a system that makes processing them smoother and more efficient. The maintenance manager, Cephas Beachy, has also made notable contributions, using his expertise to redesign parts of a nailer that have improved production and quality, such as adding a soft-touch system that eliminated stringer breakage while increasing the speed.

                “We have an excellent group of employees that play a large part in our success,” Kauffman said.


Breaking Down the Sawmill

                At the sawmill, logs come into a Cleereman headsaw circle mill that squares up the logs. They are then dumped onto a Brewco B-1600 run-around system before going through a Cornell edger onto the green chain. The edger has a setworks that sizes the cant for a specific size of material. This puts out all usable products, producing no shim.

                “That has been a huge lumber savings for us,” Kauffman said.

                The lumber is stacked off the green chain with forklifts and staged on the cant yard. A vibrating conveyor in the basement below the mill moves the waste into a Model 3680 Beast electric grinder from Bandit Industries that was installed in 2010. The grinder is also fed with waste from the pallet mill. According to Kauffman, it has been a key piece of equipment in helping turn the company’s waste into a salable product. 

                “We’ve been real pleased with it,” he said.

                The cants from the mill go to the cut stock operation in another building which is run by Orla Yoder, the son of founder Alton. There they are fed into a Pendu cut-off saw system with a green chain system from Pendu where they are chopped to length. An accumulation chain allows an employee to pull off any lengths desired while the rest is automatically fed into a Brewer gangsaw. Boards are then fed into the Keystone board accumulator that Graber helped design and onto an automatic Keystone stacker. A West Plains notcher is used for notching stringers.

                Having its own sawmill has been especially beneficial to Pennyrile Pallets as it has dealt with the current lumber shortage in the region.

                “We can recover a lot faster by producing precisely what we need at the given time,” said Kauffman. “Whereas when you are dependent on purchasing cants from local sawmills you don’t have that flexibility. You normally just receive what they’re cutting at the present time.”

                Historically, Pennyrile used only hardwoods for its pallets. But a couple years ago it had the opportunity to start purchasing green pine logs for processing into pallet lumber. After considering the idea and talking with customers to see if they would be interested, the owners decided to give it a try. Now, between 18-20% of pallets produced are made from green pine.

                “In this area, a lot of the loggers would go around pine because there were no markets for it,” Kauffman said. “It’s opened up a source for us to bring an alternative to hardwood into our system, and it has been a good thing for us.”


Customer Service Remains Key Focus for Pallet Operations

                Pallets are built on a Viking Duo-matic nailer. Pennyrile bought it used after the fire and had it shipped to Macon Machine where it was updated and retrofitted to be an auto-pallet.

                Mid-Continent Nail has been the company’s long-time supplier of pallet nails. Blade service work is done by S&D Saw & Tool in Shamokin, Penn.

                Pallets are heat treated in a Kiln-direct heat-treatment system. Around 70% of the produced pallets are heat-treated. An outdoor Heatmor wood burner heats the manufacturing facility. It heats hot water that is circulated through the floor of two buildings for radiant floor heat.

                The company runs one eight-hour shift per day, producing between 2,400 and 2,500 pallets per shift. It has some direct accounts, but the majority of its sales are to pallet brokers, many of whom have been long-time customers, with a history of 12 to 15 years with the company. There is even one customer that Pennyrile has worked with since it started 30 years ago.

                Kauffman said that the longevity of its customer relationships is due to a focus on providing quality products and service that was started by the first generation to own the company and is carried on today.

                “We find it very important to pay attention to the customer’s needs,” Kauffman said. “There are things that sometimes can be learned through observation, such as a hole in their system, and if we keep a line of communication open we can relate that. We understand that our success is largely determined on the success of our customers.”

                Around 85% of deliveries are made within a 150 mile radius. Pallets are delivered by a local company, Fentress Trucking, which has three trucks and a number of flatbeds and vans dedicated to Pennyrile’s needs.

                “Fentress Trucking does an outstanding job for us,” said Kauffman. “It also does customer inventory for us from time to time. It has a really good team of drivers that are responsible and when they go into a customer they will inventory their pallet supply which gives us a gauge for when their next load will be needed and helps us plan.”

                Though the current owners are not yet nearing retirement age, they have already started looking ahead and thinking about passing the company onto the third generation.

                “I’m only 43 years old now, but long-term I would like to be doing less and let them do more...let the third generation move forward with that,” said Kauffman.

                The third generation is already well represented at the company. Kauffman’s son Kenneth is in charge of production and another son, Marlin works in production.  His daughter Emily works in the office where she is in charge of trucking and scheduling and LaWayne Yoder, Leland’s son, runs the nailing machine.

                “They’re already on their way and do very well,” said Kauffman. “Without them I would wonder what I was doing in the pallet business.”

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