Kentucky Pallet Manufacturer Builds on Success in Hardwoods;
Associated Pallet Relies on Three Brewer Inc. Cut-Up Lines, Viking and Rayco Nailers
By Tim Cox
Date Posted: 9/3/2002
SOUTH CARROLLTON, Kentucky – Associated Pallet Inc. is a leading manufacturer of hardwood pallets, well situated to serve markets in the American heartland and with integrated, diverse operations that also produce other low-grade hardwood lumber products as well as high quality hardwood lumber.
Associated Pallet builds 40-50 types of pallets -- strictly hardwood -- with output a maximum of about 35 trailer-loads per week. Although it does not specialize in recycled pallets, the company offers a No. 2 pallet made of new but lower grade material. Associated Pallet also provides a wide range of specialty services and products, such as skids, crates, strap notches, bevel ends and chamfering, stenciling, grooves and banding. The company’s pallet customers are mostly heavy manufacturers of steel, plastics and automotive parts, pharmaceutical and food grade industries with plants in Kentucky, Indiana and Illinois and some business in Tennessee and Missouri.
Associated Pallet’s considerable cut-up operations keep the plant supplied with pallet stock. They are equipped virtually entirely with machinery from one supplier – a ‘neighbor’ and another leading pallet industry player, Brewer Inc., whose operations are located a scant two miles away in Central City.
Associated Pallet has undergone significant growth and change since the business was started by Carl Perry in 1964. Carl drove a milk truck at the time he decided to launch out on his own and make pallets. He started in a nearby hamlet called Five Spot with help from his father-in-law, J.D. Webb. He hired five workers, and he and the men used hammers and buckets of nails to build pallets they made from cut stock. The business grew quickly, and four years later Carl added a sawmill to ensure a steady supply of pallet stock.
In 1992 Carl turned day-to-day operations over to his son, Michael, who now presides over the company as president; another son, Kevin, is executive manager in charge of pallet operations. Mike was 18 when he began working for his father full-time after finishing high school, and Kevin joined the company three years later in 1981 after he completed high school.
The company’s first sawmill was a Frick hand-set mill that was used to saw flitches. The flitches came off the mill to a single-head planer and then to a swing saw to be cut to length. The last cut-up stage was an Alden gang saw.
The business grew gradually but steadily, and Carl relocated the company to Bremen in 1974 and put in a fully automated modular sawmill. He also invested in his first automated nailing machine, a Doig, adding a second Doig nailer in 1978.
Today the family business is not one entity but several affiliated companies. Operations are in several locations but predominantly in South Carrollton in western Kentucky. Associated Pallet’s plant and the Premium Hardwoods Inc. sawmill are located in South Carrollton on the same road -- Premium Drive -- just a short distance from each other.
Perry Hardwood Lumber Inc. has operations in two sites. Its sawmill is located in Fredonia, about 72 miles west of South Carrollton, and it also has storage operations at Bremen, just five miles north of South Carrollton.
In addition, Premium Hardwoods contains a timberlands division that buys timber -- Mike does some of the buying -- and contracts for logging, and Perry Hardwoods has a trucking division.
The combined companies also operate a log yard in Big Clifty, which is 70 miles east of the main facilities.
Combined operations employ about 115 people with about 50 at Associated Pallet, 50 at Premium Hardwoods, and 15 at Perry Hardwoods.
In 1984, under Mike’s leadership, the company launched a hardwood manufacturing division, Perry Hardwood Lumber, which produced hardwood lumber on the modular mill. This reduced the volume of material that was available to be sawn into pallet parts, and the company renewed purchases of cut stock and flitches. Three years later the company’s own technicians built another sawmill in Fredonia, a copy of the one that was running at Bremen. The new mill also was equipped with a Precision debarker and chipper and a Ligna edger. By this stage, in 1987, sales of grade lumber outstripped pallet sales.
The company acquired another sawmill in 1986 with the purchase of Matney Lumber Co., located about 25 miles west, although it subsequently sold the sawmill. The acquisition of Matney Lumber allowed the company to increase production of grade lumber and pallet cants. It also put the company in the business of manufacturing specialty timbers for the mining industry.
Mike had a vision to produce superior hardwood lumber and eventually expand into markets for finished lumber and secondary lumber products. The company could not accomplish that with its existing sawmill equipment, however. Mike started Premium Hardwoods Inc. in 1992 and began a four-year process of researching and planning a new, state-of-the-art sawmill to produce furniture grade lumber and flooring. The company built a new hardwood sawmill in 1996, and it began operating in 1997. The entire project was engineered by one of the company’s employees, Dwight Rickard, and its own crews did almost all the work, from preparing the ground to programming the equipment. Company staff fabricated virtually all the material handling equipment, such as infeeds, decks, green chain, transfers and roll cases.
The company uses strictly hardwoods for pallet material. Associated Pallet obtains cants from the sawmills of its affiliated companies; they provide the majority of the raw material it requires. The remaining raw material it uses comes in the form of cants and cut stock purchased from other mills. Associated Pallet continues to seek dependable suppliers of pallet stock.
The company buys cants from sawmills within the same region as its pallet and lumber customers, reaching out further in some cases for cut stock suppliers. Its trucks will back-haul with a load of cants or cut stock after delivering a load of pallets or lumber.
The pallet plant has three cut-up lines, and Associated Pallet has relied heavily on Brewer Inc. to supply machinery for its pallet cut-up operations. Associated Pallet’s staff fabricated all the decks and unscramblers for the cut-up operations. One line begins with a Brewer single cut-off saw. Sized cant material goes through either a Brewer single-arbor, double-bay, gang saw or a second line, a Brewer double-arbor, single-bay gang saw. The first line is used to manufacture stringers and the second produces deck boards.
On the third line, cants are cut to length on a Brewer multi-select cut-off saw, and the resulting material is fed to a Brewer single-arbor, double-bay gang rip saw. The last stage in the line is a Brewer Golden Eagle three-head horizontal band saw system. This third line is used to produce either deck boards or stringers, depending on production requirements.
The pallet plant is also equipped with a Brewer chamfering machine, Whirlwind chop saws and CAT lift trucks.
One of the highlights of the company’s file room is an automated grinder supplied by Wright Machine Tool Co. that the company purchased one year at the Atlanta Expo.
The company has continued to add and upgrade nailing capacity over the years, and its original Doig nailers are no longer in service. Associated Pallet purchased a Viking Uni-Matic nailing machine in the late 1980s. "My brother was the one who was adamant about the Viking, which turned out to be a good decision," Mike recalled. The company invested in a Viking Turbo in 1994 for additional nailing capacity.
In recent years Associated Pallet also added two Rayco Pallet Buddy nailers. Mike and Kevin saw the Rayco machine demonstrated at the Midwest Forest Industry Show in Missouri several years ago and decided to add one; they purchased the second Rayco Pallet Buddy about a year later.
In addition to the nailing machines, about eight workers assemble custom pallets or small orders by hand, using jigs and Stanley Bostitch power nailing tools.
The pallet plant is equipped with a Patz material handling system for collecting and moving sawdust and wood waste. A Bruks drum chipper is used for processing the tough trim ends of the hardwood cants. It is the second Bruks machine the company has owned; the first was purchased in the mid-1980s after seeing the supplier’s exhibit at the Atlanta Expo. The chips go through a second grinding process to make a product that is marketed wholesale for landscape mulch and playground covering.
The company has a fleet of eight tractors and 30 trailers for making deliveries and back-hauling cants and cut stock to the pallet plant.
Associated Pallet is unique from other pallet companies in that it has been heat-treating pallets for 12 years. "We probably have more experience than anyone else in the country," said Mike.
There is currently strong interest in the pallet industry in heat-treating in order to meet European Union requirements for imported wood packaging that is free of insects. However, Associated Pallet has been kiln-drying pallets for more than a decade because customers wanted a kiln-dried pallet for other reasons, Mike explained. Kiln-drying eliminated pests as well as mold and also resulted in a lighter, stronger pallet. Kiln-dried pallets were particularly attractive to customers in food and pharmaceutical industries that wanted to eliminate mold from contaminating products.
Today, Associated is certified to supply both kiln-dried and heat-treated pallets. The company added an SII dry kiln four years ago for the sole purpose of drying and heat-treating pallets. It also has a 20,000-square-foot warehouse to inventory treated or dried pallets. Most pallet customers are interested in heat-treatment, Mike indicated.
The mine timber business has been good for the company. Matney, when it was acquired by Associated, had a standing order for timbers for one mine. Once Associated Pallet and its affiliated businesses began servicing the account, the company used manufacturing capacity at its sawmills and expanded the business, adding more mines.
The new Premium Hardwoods sawmill has 3/4-acre under roof. Operations begin with a Rens metal detector and HMC debarker. Primary break-down is performed on a McDonough 6-7A band mill equipped with an HMC linear positioning carriage and Silvatech setworks. Then the material is transferred to a Corley line bar resaw. The mill is also equipped with a PHL edger and an HMC double-end trimmer. A Fulghum chipper converts scrap material into pulp and paper chips. Features of the material handling systems include a waterfall grading system, a 150-foot green chain, and 54 carts so the company can provide a wide range of specialized sorting services.
Premium Hardwoods has the capability to produce 12 million board feet of Appalachian hardwood lumber annually. The mill saws hardwoods such as red and white oak, poplar, cherry, walnut, ash, hard maple and hickory. All lumber is double-end trimmed, and Premium Hardwoods sorts up to five different lengths, ranging from 6 feet to 16 feet. About 80% of the company’s grade lumber is sold green with the remainder air-dried or kiln-dried. The company’s lumber is shipped to customers in Kentucky, Illinois, Indiana, Tennessee, Missouri, Minnesota and elsewhere.
For more information on Associated Pallet’s mill direct products, call (270) 754-4087, e-mail email@example.com, or visit the Web site at www.associatedpallet.com.
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