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Start-Up Indiana Pallet Recycler Takes Fast Track to Profitability, Success
Plating with Eagle Metal Plates and Equipment Integral to Operations at Pallet Recyclers
By Jack Petree
Date Posted: 5/1/2004
Even in those days, though, some pallet recyclers were beginning to build substantial enterprises. Machinery manufacturers brought automation to the pallet recycling industry while the entrepreneurial owners learned how to build and streamline plants for efficient production of quality recycled pallets.
Today, Clarence and the pallet recycling industry have grown up together. The one-time laborer on the repair line has become a well known author, speaker, pallet recycling plant consultant, and sales representative. Meanwhile, pallet recycling has grown in importance both within the pallet industry as well as to pallet-using businesses.
Although maturing, opportunity still abounds in pallet recycling, according to Clarence. As an example, he singled out Pallet Recyclers LLC, a very young but already substantial pallet recycling company in the southwest
Pallet Recyclers has demonstrated that there is still room in the pallet industry for start-up companies that are run by entrepreneurs with business savvy who take a professional approach to doing business.
"This is a company begun with an initial investment of about $150,000 that became profitable in just nine months and continues to provide a 10% return after three years in the business," said Clarence. "That's success by anyone's measure."
Andy Cosgrove, a partner of Pallet Recyclers, was already in the pallet manufacturing business when he and Clarence first got together almost four years ago. Andy and his wife, Jackie, had purchased Vision IV Inc.,a pallet manufacturing company, and were running it successfully. Jackie managed the business since Andy is vice president of operations for ARC Industries, an organization that provides development, employment and independence for individuals with disabilities.
Jackie got frequent calls from businesses seeking to buy recycled pallets, but the company lacked the space and expertise to add pallet recycling operations. "Andy felt that full service to the community should include both new and recycled pallet opportunities, so he began to look around to see what could be done," said Clarence.
In order to explore the potential for recycling, Andy attended a trade show. He met Clarence, a sales representative for Eagle Metal Products, which had an exhibit at the trade show. (Eagle Metal supplies plates and plating equipment to pallet and container manufacturers and recyclers.)
Andy liked what he heard and saw and soon decided to start a pallet recycling business from scratch. He sought a partner, Art Green, to run the day-to-day operations for the newly formed company, Pallet Recyclers LLC. Art is president of the company, Jackie is administrative coordinator, and the Cosgroves’ daughter, Nicole, is a sales associate.
Andy and Art consulted with Clarence for laying out and equipping a plant. Together they decided on a ‘straight line’ pallet repair line capable of producing more than 2,500 pallets daily.
Doing research to determine the potential market for recycled pallets is a vital first step, noted Clarence. "I can design a system to handle nearly any need," he said. "So the real question is: how many pallets do you want to repair? If the system is too large for the market, the client has spent too much up front. If it is not large enough, the client cannot fully realize the opportunity existing in the market. That means it's really important to have a realistic idea of what the market is like and of how much of that market the client wants to serve."
In a ‘straight line’ pallet repair line, all the pallets to be rebuilt flow down a straight conveyor line from start to finish. The approach eliminates much of the lifting and handling of the pallet.
In the Pallet Recyclers plant, incoming pallets are first counted, then are moved to one of the five repair stations, which are located adjacent to the conveyor line.
Each repair station is equipped with a Minick Enterprises lead board remover -- which doubles as a pallet repair table -- and a stack of repair stock is adjacent to the table. The Minick machine has ‘fingers’ that remove the damaged lead board. They also can stabilize the pallet, allowing for removal of other damaged deck boards and fastening of repair stock. After the pallet has been repaired, it is placed on the conveyor; pallets that require plating are placed face down for easy identification. Scrap material is placed on the same conveyor.
The pallets continue down the slider bed to a 20-foot roller conveyor. There is an 18-inch gap between the slider bed and the roller conveyor. The gap is small enough to allow the repaired pallets to pass from the slider bed to the roller conveyor but wide enough so that scrap wood falls below to a second slider bed conveyor to be carried into a dumpster.
Three Bronco Pallet Systems stackers are adjacent to the final stretch of roller conveyor. A worker grades the pallets coming to the end of the line and slides them to the appropriate stacker.
One customer needs to know the precise weight of each pallet for shipping purposes. Pallets designated for this customer are weighed on a
Pallets deemed by the repair workers as not suitable for rebuilding also continue down the line to the grader, who slides them onto a second roller conveyor to be carried to the pallet dismantling area.
The worker grading the finished pallets also performs stringer repairs. The grading area is equipped with an Eagle JCU plater for plating damaged stringers. The Eagle JCU plater is floor mounted with a boom that easily swings over the stringer so the worker does not have to lift and carry the pallet. Plating damaged stringers is efficient and effective, Clarence noted, compared to the costs associated with removing and replacing stringers.
Pallets that cannot be repaired provide the raw material for recycled repair stock. The pallet dismantling and lumber recovery operations are equipped with several machines supplied by Smart Products. A Smart Products bandsaw dismantler is used to disassemble the damaged pallets. Good lumber is put through a high-speed Smart Products trim saw to cut deck boards to length. A Smart Products chop saw is used to cut stringers and specialty products, such as half-runners. Half-runners are assembled into stringers using an Eagle stringer splicing system and Eagle plates.
Plates and plating systems have enabled pallet recyclers to improve pallet quality and profitability, Clarence noted. Before the advent of plating systems, stringer repair was an inefficient, costly process. Many stringers could not be repaired, so a lot of wood previously was wasted. In addition, stringers that could be repaired often were unsightly and inadequate in terms of strength.
The solution for stringer repair is a plating system like those supplied by Eagle Metal, which is based in
At Pallet Recyclers, Eagle Metal plates and equipment enable quick, easy repair of stringers and stringer splicing. That means used lumber that would have been discarded can be recycled. Plating allows for the recovery of more used lumber and the further re-use of recycled pallets. Plated and spliced stringers perform well and also may be more acceptable visually to customers.
A number of studies have demonstrated that steel connector plates like those produced by Eagle Metal are effective when used for splicing stringers and repairing stringers. For example, the Virginia Tech pallet and container research laboratory studied the performance of spliced stringers in 1999. According to the study, tests have shown that taking two half-notched stringers and putting them together end-to-end using a metal connector plate to effectively create a 48-inch long stringer will have 75% to 80% of their original stiffness and may be as strong or stronger than the original stringer.
In fact, plating has been so successful and widely used in pallet recycling that it is becoming more prevalent in manufacturing new pallets, according to Tom Whatley, founder of Eagle Metal. End plating stringers is one successful innovation with significant implications for pallet users as well as profit opportunities for pallet manufacturers. Joint research by the Canadian Pallet Council and Virginia Tech revealed that end plating stringers can delay initial stringer repair by 70% to 85%. Tests also showed a 76% reduction in the estimated repair frequency of stringers and a 60% reduction in the estimated repair frequency of all components if proper fasteners are used to manufacture and repair the pallets.
Pallet Recyclers is on the cutting edge of progress in the pallet recycling arena. In bringing a professional approach to pallet recycling, Art, Andy, Jackie and Nicole have found another level of success.
"This is an industry I'm proud to be a part of," Clarence said. "And it's companies like Pallet Recyclers that will make it an even better industry tomorrow than it is today.”