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Fontana Forest Products Continues To Evolve in Specialty Packaging Arena: Division of Michigan Box Has Adapted Successfully to Changing Markets and Cu
Division of Michigan Box has adapted successfully to changing markets and customers; Fontana Forest Products continues evolution in specialty packaging.
By Peter Hildebrandt
Date Posted: 10/1/2005
DETROIT — Carl Fontana, CEO of Fontana Forest Products, has maintained a positive, forward-looking attitude from the early 1970s, when the company was purchased by Carl and his father. Today he is gearing up for any new changes the future might hold for the custom wood packaging business.
Fontana Forest Products is a division of Michigan Box Company, which makes corrugated boxes and corrugated paper. Carl is president of the parent company.
Carl attended the University of Detroit in the late 1960s to study engineering. After graduating, he entered the military and served a year in Viet Nam. When he got out of the service in 1971, Carl’s father, who had been working for a corrugated box company, decided he wanted to be in business for himself.
Father and son bought an old box company, Michigan Box Co., basically a small shop that built wood boxes before corrugated was invented. The company was equipped for making both wooden boxes and corrugated containers.
Apart but Together
Carl put his engineering background to work and adapted the wood products operations in order to make the company more of a specialty-designed container producer. Not long after the company started up, Carl’s brother, Peter, came to work for the company, followed by another brother, Lou.
As the company grew, the family spun off Fontana Forest Products. Carl’s stepmother, Elaine, became chairman of the board, and Carl’s stepbrother, Joe, became CEO of Michigan Box.
Fontana Forest Products became a specialty wood container producer for the many glass manufacturers in the region, including Ford Motor Company’s glass plant, Guardian Glass, and Libby Owen Ford; the companies made glass products for patio doors and other applications.
The wooden packaging Fontana produced for these customers ranged from containing 60 to 140 board feet of lumber and a variety of material. "It was really a logistical nightmare," recalled Carl, "but we automated an assembly line and broke things down so it was extremely efficient. Subsequently we became the only supplier for Ford, the largest supplier for Guardian and one of two suppliers for Libby Owen Ford. We were fortunate in that there were three glass plants around us, and we had a very good niche carved out." In the 1980s, Fontana Forest Products perhaps made more wooden containers for glass manufacturers than anyone else in the world.
Being a single source supplier brought Carl an awareness of the importance of providing strong customer service. The glass manufacturing customers produced glass products around the clock virtually every day of the year. Having a steady, reliable supply of transport packaging was essential to their businesses.
"Timing was very important," said Carl. "We were plugged into them with daily inventories, and they were good about giving us schedules that we had to adhere to. Those were good years."
Need to Regroup
But by the end of the 1980s, however, market changes rendered the glass manufacturers no longer viable. They adapted by retrofitting to manufacture glass for Detroit’s powerful automotive industry. Windshields and other products were shipped in steel racks, eliminating the need for wood packaging the businesses previously bought from Fontana. Sales and production at Fontana plunged.
"Instead, we just decided that we’d be more flexible," said Carl. "Lou, our vice president for sales, went after a more diverse line of products to package." Fontana went after business for specialty pallets and transport packaging. The company looked to exploit the market for shipping containers, export packaging, dunnage, and other products.
Although the two companies manufacture different types of packaging, Fontana Forest Products and Michigan Box also work hand in hand. Fontana gets corrugated board from the parent company for packaging that requires a pallet and a corrugated container, and Michigan Box often requires wood components for some of its products.
The businesses service several auto manufacturing plants and their suppliers. The companies also have other industrial customers within 100-150 miles, most of them in Michigan, Ohio and some in Indiana.
At the end of the 1980s the Fontanas invested in a building and moved out of their leased facility. The new plant had a larger yard and also was equipped with a dust collection system. The building is over 100 years old and once housed part of the manufacturing operations for Studebaker automobiles circa 1900.
At present, Fontana makes specialty containers and pallets for shipping, storage and sometimes long-term inventory storage. The company is certified to supply wood packaging for export. Annual sales are in the range of $3-$5 million. "We have ‘preferred supplier’ status for wood packaging for several auto companies," said Carl.
Fontana Forest Products buys most of its raw material from Canada. The company has an excellent relationship with several brokers who keep it supplied with lumber.
Fontana also sources some pallets from a Canadian manufacturer when it gets orders for large quantities. The Canadian affiliate uses the Pallet Design System, the computer program licensed by the National Wooden Pallet and Container Association. The program, among other things, can determine safe load weights for particular pallet or container designs.
Like other pallet suppliers that are certified to provide export packaging, Fontana stamps its pallets and containers to show they have been heat-treated. The company buys heat-treated SPF from mills in Canada and Michigan.
Fontana Forest Products has about 30 workers and offers them health insurance benefits, paying 35% of the premium
"We have good people," said Carl. "We really don’t have that much turnover in our business. Also, because we are located on the west side of Detroit, we are easily accessible. I have employees coming to work by bus, car and even by bicycle."
Fontana Forest Products has a safety committee that meets quarterly to review problems or accidents. Each member of the panel does a plant tour each quarter, looking for hazards. If they find anything, it goes in a written report — whether it is someone without proper eye or hearing protection or an exposed saw blade.
"I’m happy to report that we haven’t had an accident in over two years," said Carl. "The insurance company has sent us a nice plaque – then again we’ve probably paid for it well with all our premiums!" Injuries, when they do occur, frequently are linked to the pneumatic nailing tools. "It is very easy to injure a finger or limb when you get too close to one of these tools," noted Carl. "Saws, however, are the things I am most concerned about. We have been very fortunate in that area."
From Start to Finish
Fontana Forest Products buys 1/2x4 to 4x6 random length lumber from 4-20 feet, both hardwood and softwood. It mainly buys 2x4 and 2x6 material. Hardwood lumber generally is used for pallets while the softwood lumber – SPF as well as Southern yellow pine, plywood and oriented strand board — is used to make containers.
Wood is cross-cut to the appropriate length on one of two computerized saws, an Alpine PF and a Tiger saw. A worker enters into the computer information about the number of boards needed, the length, and other factors. The saws have automatic feed systems. Workers offload the finished boards and stack them on pallets. The company also is equipped for various other operations, including drilling, notching, and more. The cut-up shop occupies about 10,000 square feet.
"Though the Alpine is an older machine that is no longer manufactured, it has been a real workhorse for us," said Carl. "We also have a multi-headed KitCan, a 20 foot saw with five heads that you put boards on and it rolls them right through. That one is used for large quantity jobs."
There are separate areas for sub-assembly and final assembly. For example, one worker may assemble components to make the bottom of a crate while others may assemble the sides or top. The company uses this approach especially for large orders. The assembly area is about 20,000 square feet.
Sawdust gathered by the dust collection system is sold to horse farms for bedding. Most of the company’s wood scrap goes to a landfill. "We don’t generate enough to mulch it and sell it," said Carl. "So much of that needs to be generated weekly in order for such equipment to pay for itself, and we don’t do that."
"Ours is a smaller operation that is not really a mill, though we can resaw, reman, gang-rip and process random width material. We used to have a large vertical 36-inch band saw, but we replaced that with a Baker horizontal resaw." Other equipment in the cut-up department includes a Diehl gang rip saw, two Diehl straight line rip saws, a panel saw, and two double-head notching machines, a Bob Hanna and an Irvington. The notchers are equipped with Profile Technology cutting tools.
Carl emphasized his company’s longstanding reputation for quality and service over simply being the least expensive.
"We know what our product costs us, and we know what we need to do to make a profit, but we also know how important it is for our containers to be on time and to be made correctly," he said. "It is always more than just money. People always need to do their homework when looking for a container or pallet supplier. We’ve always stood by our product and our reputation in the industry."