Young Entrepreneur Looks to Diversification and New Equipment to Accelerate Growth: L-M Verticut P4 Critical to Cut Stock Operation
Pete’s Pallet: Young Canadian entrepreneur starts pallet company when he was 21 and has built it up over the last five years. Peter Rempel shares how diversification, risk taking and the right suppliers has fueled growth. LM Equipment has made all the difference for his cut stock operation.
By Rick LeBlanc
Date Posted: 9/1/2017
Most 21-year-olds are not interested in starting a pallet company. But Peter Rempel is not your typical 20 something adult. At the age of 21 after losing his parents and brother in a tragic car crash a few years before, he decided to prepare a future for his family by starting from scratch a pallet company. And as a young entrepreneur he quickly discovered that he would have to do things differently from the competition if he wanted to survive and thrive.
Rempel grew up around the farming industry and construction in the Lethbridge, Alberta area. Like many of his friends involved in the home building trades as well as the manufacturing of structures, he was interested in starting a business. It didn’t take him long. He launched Pete’s Pallet Manufacturing Inc. in 2012. “The younger generation was going into construction or manufacturing of buildings and housing,” Rempel explained with a quip. “I decided that I had to do something that was even more complicated – making pallets and cut stock.”
Despite starting as a novice at a young age, Rempel has been successful thanks to his willingness to diversify, look for new opportunities, and buy the right equipment to meet production challenges. A key partner in its cut stock business has been L-M Equipment Co. and its Verticut package saws. This machinery has boosted production with minimal maintenance or operator headache.
Rempel first began to look at pallets as an opportunity while working at a local manufacturing plant, and came across inefficiencies resulting from poor pallet applications. “I found there wasn’t much knowledge about pallets,” Rempel recalled. “People didn’t understand that a properly engineered pallet could make a big difference. I saw that there was an opportunity to make things better.”
With only some limited experience in carpentry, Rempel went into the pallet and crate business. While the new company gained some traction, opportunities for growth proved to be limited, however, due to the modest size of the Lethbridge community. While Lethbridge is Alberta’s fourth largest city, its population is still less than 100,000 people in size. The company serves the market with softwood pallets and crates. Production runs tend to be small, often in the 200 to 1,000 unit range. Frequent changeovers are the norm. Today, Pete’s Pallet Manufacturing proudly offers heat treated wood packaging, custom cutting, pallet kits, crates and pallets, in addition to survey stakes and laths.
Expansion and Diversification Takes Risk
Given the limited growth prospects locally, the company began to spread its wings. “We started to look further afield for potential business,” Rempel explained, “and that is what led us down into the United States. We discovered there were opportunities to ship our manufactured components and kits into the States, and that is exactly what we did.”
In 2015 the company began shipping pallet kits to the United States. However, the recurrence of the softwood dispute and the introduction of tariffs has thrown a monkey wrench into that part of the business for now. Currently, the company’s U.S. bound shipments have slowed down to a trickle – only a few loads per week. “We are just doing some specialty orders,” Rempel stated. “Ones that make sense.”
Sensing that export might be a problem going forward, Rempel decided to diversify yet again, this time purchasing the assets of a survey stake and lath company, which it relocated to the 2.5 acre Pete’s Pallet Manufacturing site. While Rempel believes there is a substantial market for stake and lath products in the United States, he is just marketing them domestically for the time being, as they are included in the scope of the softwood investigation.
Rempel is also looking into opportunities in Mexico to ship lumber, stakes and more. He is actively seeking business partners in Mexico to make these opportunities a reality.
High Volume Production and the Need for Better Equipment
When the company started, Rempel initially found himself shopping for used equipment and looking for good deals. With the development of its cut stock product line, however, priorities changed. “Once we started exporting kits into the States, that’s when we realized that our equipment was not designed for high volume production output,” he said. “That was the reason we purchased the L-M Verticut, as well as our new Baker resaws.”
Regarding a package saw, Rempel chose to go with the Verticut P4 system and bump rollcase from L-M Equipment Co. One of the attractions for Rempel was its reputation for reliability. He listened to very positive reports from other owners, who described years of trouble-free use except for minor maintenance items. The business case was also aided by its P.E.T. cutting tolerance of just +- 1/32". He also liked that it is a “made in Canada” product and uses commonly available parts.
“We can get all the parts locally,” Rempel added. “It’s robust and heavy gauge. It’s a good saw in our opinion.” With a long history of building equipment that can stand up to the rigors of handling massive logs, L-M has a reputation of always “thinking heavy” when it comes to designing machinery.
The fully automated Verticut P4 also features wireless remote starting, providing an important productivity gain and enhanced safety for the forklift operator, who does not need to dismount to start it. Another positive is that the initial first cut is also automated, eliminating the need for the operator to manually place it. Other productivity enhancing features include depth controlled cutting and FACT (Fast Advanced Cutting Technology) cutting. FACT results in the saw advancing to the package at a much greater speed, but then switching to a slower cutting speed when it comes to within 2" of the package, resulting in improved overall cycle time.
The Verticut has no problem running outside, which is an important consideration, given the facility’s modest 8,000 square foot main building. A roof and back covering were built for the L-M saw with the front left open so that it can be accessed. For the Pete’s Pallet installation, Rempel had L-M extend their standard waste conveyor to 12’ in height so it would dump automatically into the company’s wood waste trailer. “The waste conveyor system is an absolute must,” Rempel said.
Pete’s Pallet likes to keep about two days ahead of production on the Verticut, with material stored outside. Once product is moved inside, roll conveyors lead to Baker horizontal resaws for splitting to one-inch boards, while stringers are processed with a used Kenwell Jackson notcher that Rempel purchased and then modified.
While Pete’s Pallet uses the L-M for about 80% of its cut to length requirements, it also uses a Newman KM-16 multi-trim saw as needed. Pallet assembly is performed on a Third Man nailing unit, which serves the company’s needs, given the small size of orders and diversity of pallets manufactured. Rempel, making use of his welding skills, also custom fabricated a nailing jig for larger pallets, including a five-stringer product. The company uses nailing tools and nails supplied by Bissett Fasteners, a leading industrial fastener supplier with 11 locations across Canada. “They’ve been a good, reliable supplier,” Rempel stated.
Partnering with good suppliers and getting the right equipment has been key to his success. Rempel said, “I always enjoy reading the Pallet Enterprise magazine, and it has helped me learn from other operations and find out about equipment options.”
The company ships out 2-3 million board feet of cut stock into the states monthly when busy. It also produces on average 6000 new pallets, 500-1000 recycled pallets and a few pallets of painted survey lath.
In its lath operation, Pete’s Pallet uses a Keystone pointer from Keystone Machinery, and an OGAM 220 Multi rip saw to slice the lath. Workers also use Max Tools provided by Bissett and a Cantec SYC-300M to make grooved dunnage.
The L-M package saw is critical for feeding the lumber needed for the various production lines.
Recycling is done by hand. The company focuses on repairing not dismantling. It also manufactures 48x40 and custom sizes, including some very large pallets for the oilfields.
Production is tracked with Google sheets to help coordinate the process. And Pete’s Pallet uses Pal-draw by Automated Machine Systems to design its pallets.
The company provides local deliveries in its own trucks and trailers including dry box, flatbed, and walking floor units. For dust collection, Rempel purchased a used system and customized it to meet their needs. He had observed some interesting dust collection units while attending NWPCA’s 2015 Fall Plant Tours, which served as an inspiration. Ultimately, however, he needed to come up with a unique solution that would function effectively in Lethbridge’s windy climate.
Pete’s Pallet Manufacturing offers HT pallets, certified through the Alberta Forest Products Association program. The company is a CWPCA member, and Rempel currently participates in the association’s trade advisory committee.
Business Philosophy Connected to Hard Work, Faith and Family
Faith and family has always been at the center of Pete’s Pallet. Married to the love of his life, Agatha, when he was 18, she has been helping him with the business ever since it started in 2012.
Rempel remembered, “I lost my folks and my brother in a car accident one week after marriage, in Johnstown, Colorado. I have learned so much through it all. That accident taught me resilience and strength to go on in times of difficulty.”
Having lost his closest relatives, Rempel knew he had to secure his family’s future. And that is what the pallet business has done for him. He started with a little bit of money from his family estate and then worked hard to build it into something worthwhile.
Rempel said, “It took many days of working long hours and little pay to grow the company into what it is today with its diversified product line.”
In addition to his wife, Peter Rempel also enjoys spending time with his four daughters, Nellie, Grace, Ruth and Susanna. Their family also operates a small farm where they grow vegetables and rear cows and chickens.
Away from the home or office, Rempel is active in ministry, teaching children and helping the next generation.
Rempel observed, “It has been pretty much hard work and faith. I’m a Christian, so our core value is based on Christianity. We work hard, we try to play fair as we know how, and don’t let anyone else drag us down.
“There is a lot of talk about what’s great and what’s bad in the pallet industry. I received some negative comments when we bought our new package saw, that we shouldn’t have done that. But there is so much technology in these new saws now that perhaps wasn’t there 10 or 20 years ago. With the new P.E.T. technology, we are within a 32nd of an inch. That’s important, and we’ve seen the results.”
“We try to produce a good product,” Rempel concluded. “We always strive towards continuous improvement and delivering exactly what our customers are asking for. We focus on all of these things – hard work, good spirits and faith.”
For more information, contact Pete's Pallet Manufacturing Inc. at 403/327-3274. Check them out on Youtube as well. https://youtu.be/Y_8RWDA04CA
Pete’s Pallet Website
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