Sometimes the best way to grow is to find a good partner. That’s what Jason Nitchie, the former owner and now the CEO of Durham Pallet, did when he recently sold his company to Groupe Savoie, a leading New Brunswick-based pallet and cut stock supplier. While the process was far from easy, it has set up the Whitby, Ontario-based pallet, cut stock and logistics service provider with the resource to fuel future growth. Finding the right partner is worth the wait and the process to ensure that any new partner is a solid fit.
Nitchie shares the details and lessons learned in this process and explains why he is excited about the future under the new owners.
Durham Pallet’s Focus and Capabilities
Since opening its doors in 2001, Durham Pallet has been razor-focused on delivering excellent service to its main rental pallet client. That same approach has informed its approach to the recycled white-wood market, which it entered in 2018. Durham’s plant is situated in Whitby, Ontario, east of Toronto, in a region known as the GTA (Greater Toronto Area). The company currently has about 66 employees and operates on three shifts.
A diverse range of local businesses, including automotive manufacturing, food processing, grocery distributors and fulfillment centers, generates ample pallet demand. Due to its location, Durham Pallet can offer inexpensive and premium pallet stock. In addition to pallet sorting and repair services, the company also provides cross-docking and lumping services as needed to reconfigure freight or rework loads shifted in transit.
Who You Know May Produce the Best Partners
In recent years, Jason Nitchie was interested in expanding, but a lack of resources constrained his growth ambitions. He decided to look for a partner who could provide the necessary financial backing to take Durham to the next level. Through his former business partner, Stewart Richardson, Nitchie connected with longtime industry colleague Jean-Claude Savoie, owner of Groupe Savoie. And so, the merger and acquisition process began.
Groupe Savoie has provided quality pallet cut stock to Durham Pallet for many years, so a very positive relationship was already in place. “Still, the process was very intense,” recalled Nitchie, who still retains a minority position. He was expecting a detailed scrutiny of the business, but it was more so than he anticipated.
“If you compare it to buying a car it is less like how most people look for a car, and more like if you take every body panel off, take out the engine, remove all the parts, x-ray the frame and put it back together again.”
When Nitchie first entertained the idea of finding a financial partner, he was cautioned that a transaction might take over a year to close, even after finding a partner. Still, even with that knowledge, he wasn’t prepared for the exasperatingly deliberate pace of a business acquisition. With outside lawyers and other professionals involved, every step of the transaction required thorough analysis. Luckily, the transaction was concluded faster than at first expected. The conversation with Groupe Savoie began in September 2023, and the deal was completed in June 2024.
To be sure, overall merger and acquisition activity (M&A) has been down over the last year or more, dampened by poor market conditions and high interest rates. When asked if the recent doldrums of the pallet market had impacted the transaction, Nitchie said that he did not believe so, noting that a majority of the company’s business is related to sorting and repair services, which is very stable. At the same time, the company’s white-wood business has been growing at a double-digit pace, even as the overall market has flatlined.
Having gone through the daunting journey of partnering, Nitchie is delighted with the outcome. “Groupe Savoie has a very reputable name, especially on the East Coast,” he emphasized.
Aside from Durham Pallet, Groupe Savoie’s industrial facilities include two sawmills, one pallet plant, one component plant, one pellet plant, and dry kilns in St. Quentin, N.B., one component plant and a dry kiln in Kedgwick, N.B., one pallet production and recycling plant in Moncton, N.B., and one sawmill in Westville, Nova Scotia. Its sawmills produce 80 million FBM of hardwood lumber annually and over two million pallets.
Look for a Partner with Similar Values
One of the compelling factors for Nitchie was the similarity of their corporate values. “They care a lot about their staff and their wellbeing,” he said. “Plus, they give lots back to their communities, which aligns with my philosophy with Durham Pallet.”
Groupe Savoie echoes that point of view. “We heard the staff at Durham Pallet welcomed the news of the acquisition, which led to a smooth transition,” said Jason Somers, the company’s executive vice president. “We think both companies can learn from each other. One area where Groupe Savoie and Durham are on the same page is recognizing the value of people. We know that staff is the key reason for great success.”
Nitchie is excited about Groupe Savoie’s vision for the plant. “Their Durham Pallet five-year plan is one of exceptional growth and expansion, and I’m proud to be a part of this new chapter.”
Savoie is equally excited about the newest addition to its pallet division. “This new venture will expand our pallet inspection and repair abilities,” said Marco Turcotte, vice president of the Pallet Division, “Adding to our current offering of pallet manufacturing and sales of pre-cut wood for repair or new builds.”
“Our experience over the years with Durham Pallet Services as a cut stock supplier has now transformed into a partnership,” Turcotte continued. “It also builds on our decades-long relationship with one of our largest clients as a cut stock provider to now providing sorting and repair for them, allowing us to become a full-service provider.”
Groupe Savoie also saw other critical benefits. By expanding its recycling operations, it is moving towards its goal of becoming a full- lifecycle pallet provider. “The acquisition supports our sustainability goals by supporting the full circle of life for our products,” Turcotte stated.
“With Durham Pallet on board, Groupe Savoie will now be able to start from the harvesting, sawmilling, nailing new pallets and repairing them during their life cycle. Durham Pallet will take care of the eastern regions while our other pallet company, Pallets Plus LTD (New Brunswick), will take care of building new and repair pallets for the Atlantic regions.”
Optimize the Operations Through Data and Reorganization of Existing Capabilities
The Ontario facility will also benefit from overhead reduction as it takes advantage of corporate-level services from Groupe Savoie, such as human resources, information technology, accounting and electrical. The Ontario facility, which currently does not have an enterprise resource planning (ERP) system, will be installing Groupe Savoie’s corporate system.
Installing the corporate ERP system at a newly acquired facility can help support standardized processes, improved data integration, and better resource management, leading to enhanced operational efficiency and cost control. It also facilitates seamless communication, supply chain coordination, and scalability, ensuring the facility is aligned with the company’s overall goals and ready for future growth.
One possibility Groupe Savoie is considering is moving its new pallet production to Durham, which would decrease the cost of landing pallets in central Canada. Instead of shipping assembled pallets from New Brunswick, it could just ship cut stock into Durham to nail pallets, significantly reducing freight costs.
Ergonomics and Employee Engagement Lead to Productive, Happy Employees
Durham Pallet has been successful because of its laser-focus on customer service and quality. And the secret to this success has been its people and employee engagement. The company has spent a lot of automation and work to reduce the physical stress of the operations on its workforce. Durham Pallet has also deployed employee-centric initiatives, such as games and recognition programs.
Ergonomics is top of mind at Durham Pallet. The company operates from a 42,000-square-foot facility with 66 employees on three shifts. Nitchie has prioritized ergonomics as a way to improve working conditions and, over the last decade, has invested in machinery to eliminate lifting and bending as much as possible, including lift tables, lift assist equipment, tool balancers and powered conveyors. The company aims to become a “zero lift” facility eventually.
For pallet inspection, the plant relies on three single-operator sorting stations equipped with custom lift assist systems, including Ingersoll Rand tool balancer, hoist lift and overhead rail guide. The operator picks up each pallet with handheld forks acting as a manipulator and places it in the appropriate stack.
Stacks of pallets are moved by forklift to the repair infeed rolls and then to the repair stations. Bishoman power lift tables, tool balancers and power outfeed conveyors that run to automatic stackers eliminate the bending and worker strain associated with many common worktable configurations. From there, finished stacks are placed into inventory or loaded directly.
In 2022, the company brought in an ergonomist to review its operation. A key recommendation of the outside professional was to consider job rotation. “Changing the position, they worked allowed recovery and rest of their regularly used extremities while at the same time strengthening up their other side,” Nitchie explained. “The goal here is to limit the repetitive strain injuries. It is a small change, but it makes a big difference over time.”
Regarding employee engagement programs, Nitchie has a goal of engaging with every employee, which can be challenging, as he attests. The company has a “birthday wheel” for each team member to spin to win a prize on their birthday. They also have a Plinko game. “This game is staff-driven,” Nitchie explained. “They nominate another staff member who they feel deserves to earn a ‘Plinko chip’ for whatever reason. So, every couple of months, staff will gather up ‘chips’ they have earned for the game where they are able to potentially win some gift cards.”
Durham Pallet also actively supports employee recognition on its website and social media channels, including frequently updated Facebook, Instagram and YouTube accounts. A quick review of the Facebook account reveals daily updates featuring birthday and work anniversary announcements, fun and life advice, as well as pallet and business information.
Nitchie believes that these collective efforts help build bonds of inclusivity and open lines of communication. The company values those dialogues, and employee insights have resulted in process improvement changes.
Being alert to new opportunities is a core tenant of Durham’s approach. A recent example of that has been hiring immigrants with little or no English. “Two guys were going door-to-door at local businesses, handing out resumes,” Nitchie recalled. “One guy wouldn’t speak, and the other one had very broken English.”
In spite of that, they communicated successfully enough for Nitchie to understand they were French-speaking and from Africa. “I called them back the next day and showed them our operation,” Nitchie said. “I was thinking, well, there’s definitely a language barrier, but they want to work, and they only need to know measurements, so I hired them. Then they tell their friends, and the word has spread.”
Durham now has 16 French-speaking newcomers. To qualify for permanent Canadian residency, they must establish a solid employment record. Some of them have adequate English skills to act as translators during training and safety meetings. Job postings and training documentation have now been translated into French.
Stick With Your Formula
Durham Pallet has grown and thrived, powered by its commitment to customer service, continuous improvement and employee engagement. Now part of Groupe Savoie and with access to its considerable resources, Nitchie is excited to participate in the next phase of the company’s future.
