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Three Companies Made Sizeable Bets on Recovery!
Recovery Technology: Three pallet insdustry companies invested in the recovery package put together by Auburn Machinery and Profile Technology, and the results are paying off.
By Staff Writer
Date Posted: 3/1/2001
Gambling is putting money on the roulette table. A calculated risk is playing blackjack and counting the cards. A sure thing is buying stock based on credible insider information.
And according to the experience of three pallet industry businesses, it is a good bet to invest in technology to recover wood fiber from the typical mill waste stream and convert it into useable, valuable material.
Auburn Machinery Inc. exhibited the Yield Pro machine at the Richmond Expo in 1998. The company teamed with another industry supplier, Profile Technology, to provide the tooling for the machine. The recovery package can convert random sized, odd shaped material into uniformly sized, square edged stock. In addition, equipped with the Profile Technology "2001 Series" Nailbuster® indexable tooling system, it also can process recycled pallet lumber that contains pieces of nails.
As with any relatively new technology, however, many companies are slow to embrace it, carefully weighing the investment decision. Only a small handful of companies in the pallet industry have made the decision at this point, but the number is growing.
Three pallet industry companies — H&H Wood Products in Hamburg, N.Y., Wappoo Wood Products in Sidney, Oh., and Woodway in Georgetown, Tenn. — that have added a recovery package to their operations understand the importance and value of increased utilization of their wood resources. They were persuaded that it made good sense to invest in a machine that could convert low value waste stream material into higher value products.
The three companies differ quite a bit in their operations. They are manufacturers of pallet components, standard and custom pallets, crates, skids, flats, and recycled products. Their raw material varies from cants and lumber to cut stock.
As different as they are, the three companies had a number of important things in common. All of them spent considerable time and effort struggling to find practical ways of producing more products and reducing waste wood. At this stage all three are producing only proprietary products from the material they recover. They have not yet taken advantage of markets for other products that could generate additional revenue from their waste streams, although some of them are looking at these opportunities. Nor have they taken advantage of utilizing offal material from other mills.
Each of the three companies selected an Auburn Yield Pro recovery machine equipped with Profile Technology’s "2001 Series" indexable cutters for their recovery operations.
Recycler Recovers More, Better Quality Used Lumber
H&H Wood Products, led by president Bill Heussler, has been manufacturing pallets and skids since 1973. The company expanded its operations to include retrieval and repair services on a limited basis in 1998. Now operating out of two facilities, it employs about 30 people and produces about 400 146x31 block skids, 500 custom pallets, and 200 repaired pallets per day. Its main source of raw material has been 4x6 and 4x4 hardwood cants, although it added used lumber recovered from its recycling operations.
When H&H committed to retrieve used pallets from major customers, the new service "embedded" the company deeper with the customers but created new challenges. One was to find an outlet to use lumber recovered from used pallets. "From the start," said Bill, "I knew we had to find a solution to turn this new challenge into a positive opportunity. In the beginning, it seemed that producing combo pallets, built with new stringers and used deckboards, would offer the best opportunity for converting the ‘free’ raw material into saleable products.
"Because my main product is a block skid that utilizes 9/16 by 31-inch deckboards, I knew I could generate a lot of good components from the retrieved pallets," he continued. "We also have a steady requirement for half-inch boards ranging from 24 inches to 42 inches in length. With lots of ‘free’ material available to generate components worth 25 cents to 40 cents each, and being able to resell those components, I was determined to find a viable and money making solution."
However, Bill soon learned that the deckboards recovered from used pallets varied widely in size and species. The mixture of different sizes and species prohibited the company from producing the consistent quality products for which it was known, and the growing stockpiles of odd size boards caused problems.
"After about two years of struggling with this situation," Bill said, "I knew that the missing link to implementing this concept was to find a machine that could efficiently convert used, random sized boards, nails and all, into uniform components."
Last spring, Bill learned about the recovery package when Auburn began promoting the machine and the concept of wood recovery in advertisements in Pallet Enterprise. "That’s when the light bulb went on," he said. Bill called Auburn and obtained an information package and video and talked to a few users of the machine. He asked one of his strategic partners to take a thorough look at the machine soon afterward at the Richmond Expo. Based on favorable reports about the machine’s capabilities and performance and an estimated payback of two years in a worst case scenario, Bill decided a recovery package made good financial sense for H&H.
H&H received its new Yield Pro recovery machine and a Dust Technology two-bag dust collection system early last fall. "We added the separate dust collection system with a bullet magnet in-line to separate the metal fragments from the wood chips and eliminate the potential of any sparks entering our main system," Bill explained.
H&H retrieves between 150-200 used pallets daily from customers, and pallets are dismantled to recover used lumber. In addition, the company generates a significant volume of random shim boards from its cant break-down operations. Now, both of these materials are being processed on the Yield Pro — about 2,500 boards per shift. About 75% of the volume is used deckboards that are resized, and the remainder is random shim boards that are converted into usable uniform components.
Bill has been very satisfied with his investment. "The system has done everything that I expected it to do," he said, "and the Nailbuster® tips are performing well with this previously difficult material. At an average recovered component value of 30 cents each, the system can generate over $700 per day in raw material for my company. If we had the staff to run it at least three days a week, our return on investment could be met in about 6 months.
"A couple of unexpected benefits included developing dry, bagged animal bedding, worth about one-third more money than our bulk bedding, and selling the scrap metal (nail fragments) — which sure beats paying traditional disposal fees," Bill added.
With the recovery package performing successfully and generating uniform, good looking material, Bill now is looking into converting some of this stock into flooring, paneling and other value-added products made of recycled wood.
The biggest challenge so far has been the on-going labor shortage, which has prevented H&H from running the Yield Pro every day. "We regularly need to make a choice (based on manpower) to run that operation or perform final assembly. Since sales dollars can’t be generated until the product ships, we make assembly our first priority," said Bill.
Bill wants to position H&H to develop by-products it can sell in higher value markets. Such a move would require processing more material with the recovery package than currently and may entail a fundamental change in how the company does business. "Going into a new account and having a prerequisite where the customer must give us their used pallets in order to do business with us would be a huge paradigm shift," said Bill. "This machine has completely changed our mindset about the potential in the pallet recycling business. I now see opportunities where before all I saw was scrap."
Wappoo Turns Grinder Feed Stock into Pallet Parts
Wappoo Wood Products, directed by president Thom Baker, was started in 1980 and today employs 26 people. The company is a combination wholesale lumber operation and a lumber remanufacturing facility with about one-third hardwood and two-third pine and spruce products. Wappoo converts about 70 mbf per day of cants and lumber into components for the pallet industry.
In the past, the reman operations generated about 48,000 pounds a day of wood that was fed to the grinder. Thom became very frustrated as he watched this volume of potentially recoverable material turned into low value by-products. But he had no idea how to convert the steady stream of waste material into quality pallet components without throwing too much machinery, labor and money at the problem.
Thom happened on the demonstration of the recovery package at the exhibit at the Richmond Expo in 1998. As he watched random sized and odd shaped materials put into the machine and processed into uniform size, square-edged stock, Thom immediately knew the machine might help him to improve his yield and profitability. He asked a lot of questions and carefully examined the equipment.
For Thom, the choice was between risking an investment on a machine that did not yet have a strong foothold in the pallet industry, or playing it safe and waiting until its performance was proven by the experience of other companies. Like many other entrepreneurs in the woodworking industry, Thom decided it would be better to reduce his risk by waiting a while. He did not wait long, however, before deciding that the recovery package was the solution to regain potentially valuable material that was fed to the grinder. Wappoo’s Yield Pro recovery machine came on-line last spring.
"The system is delivering positive results in several areas," said Thom. "Because of its compactness and fast changeover capability, we use it to convert a range of random grinder feedstock material into pallet components. We also converted some of our standard three-quarter-inch stock into custom sized components, handled a variety of short order odd jobs that come our way, have it function as a planer in some situations, and used it to produce wane-free products from our random materials. This machine has proved very valuable in producing 5/4 components from waney 2x4 stock."
Here is an example of how Wappoo uses the recovery package. "We recently received a four truck-load order for 2x6 by 40-inch pallet rack boards," said Thom. "Whatever 2x6 stock does not generate the target board will be converted into a 2x3 by 40-inch component. Whatever does not give us the 2x3 product will be converted into a 1x3 by 40-inch product. In the end, we will suffer little waste in this production run."
"With recovery experience under our belt," said Thom, "we are now looking at the possibility of recovering even more of the material in our current waste stream as well as producing picture frame components from our low-grade stock."
Like H&H, Wappoo has not yet taken full advantage of the recovery package, and for similar reasons — other operations that sometimes have a higher priority and a shortage of staff have prevented the recovery system from running full time. Thom remains strongly optimistic, though. "As soon as we can dedicate more time to our recovery program, we will see a faster payback on our investment. Even though we are not using it as much as I had planned, I would invest in this system again without question. We are proud of this installation and always make a point to show it off to visitors."
'We Feel That We Have Gained Three Machines...’
Woodway, owned by brothers Ken and Joe (Jr.) Hartert, was started in 1974. According to Ken, company president, Woodway employs 15 to 20 people and processes about 20 mbf per day of cants and pre-cut boards. These materials are used to assemble 1,200-2,000 pallets and about 800-1,200 flats (appliance skids). Woodway also manufactures crates and other custom wood products.
The company uses ¼-inch boards to manufacture flats. Like other pallet companies, it was generating random thickness shim boards from cant break-down and was sending a steady volume of waste wood to a pile to be processed later by a portable grinder.
The Harterts realized that they could recover ¼-inch boards from thin or reject deckboards and produce more components from some of their waste material. In order to accomplish this on the company’s multi-head bandsaw system, however, would require several passes and tie up their main cant break-down line. The Harterts decided to look for a cost-effective solution to recover more wood from the waste stream and convert it into valuable material.
Ken saw one of Auburn’s advertisements for the recovery package in late 1998 and decided to attend the IWF Expo because he wanted to inspect the machine. The demonstration at the trade show proved the Yield Pro had the capability to meet Woodway’s requirements. But since the machine was not yet established in the pallet industry, the Harterts put off the investment and instead bought another bandsaw. By late 1999 the Harterts decided they could not wait any longer to implement a recovery system, and they invested in a new recovery package that was delivered in December.
"When planning for the arrival of the new recovery machine, we knew it would be best utilized at the end of the three-head band resaw," said Ken. "We soon realized that by placing it there, we would in effect be gaining another saw system because this machine not only resizes the thickness but also the width, leaving a dedusted board in the process. So we feel that we have gained three machines with the purchase of one recovery machine."
Woodway still is finding new ways it can use the recovery package. "Being a custom pallet and crate builder," explained Ken, "it seems that we are constantly asked to build a sample or very small order of crates or pallets. This involves using odd size boards down to one-quarter-inch thick which cannot normally be used on other jobs. And since custom orders can be small or seldom requested, we try and cut only the material needed.
"This machine works great to cut out the materials for these jobs," Ken continued. "In the past, we were sometimes forced to shut down and reset our band resaw system just to turn out a small amount of material needed to build these orders. This was a costly and time-consuming method. The quick set up and operation of the Yield Pro has eliminated this, saving us both time and money, in addition to allowing us to use boards that would have ended up as waste in the past."
The recovery package also has proven valuable in enabling Woodway to reduce raw material costs by recovering more components from lower priced cants. "Locating a mill that can provide a uniform 3 ½-inch cant can be difficult," Ken noted, "not to mention more expensive. We have found that with a recovery machine we can now purchase full 4x6 cants that are usually priced cheaper, then resize them in our facility and recover valuable components from the shim boards cut from the cants."
The investment in the recovery package has paid off in other ways, too, according to Ken. "From the beginning, we knew that it would allow us to rerun our top boards and odd sized waste, but we immediately realized other potential uses for the machine. Instead of passing the last board off a cant through our multiple head bandsaws, leaving two or three blades idle, now we stack them on a pallet and run them through the recovery machine. This keeps our resaws cutting at full capacity."
Ken said it is difficult to estimate the total savings generated by the recovery package. "But on average we feel we gain approximately 1,000 board feet of product a day from normally wasted lumber — not to mention savings from other uses. We feel that the Yield Pro recovery package has been a wise and beneficial investment in a business where there is little or no room for waste."
(Editor’s Note: For more information on the Yield Pro Recovery Package, contact Auburn Machinery Inc. at (800) 888-4244; for technical information on the "2001 series" indexable tooling system, contact Profile Technology at (800) 369-4242.)