BUTNER, N.C. — From its sizeable and impressive operations near Durham, Southern Pallet, an affiliate of PalEx, produces some 35,000 new and recycled pallets per week.
The company’s volume is perhaps even more impressive given its markets. “We have always tried to stay away from GMAs,” said owner and president Tony Fogleman. “We do more things that other companies won’t do.” A typical order for the company will be a trailer-load of about 300 pallets.
Tony and his father, Claude, followed one principle that served them well as they built Southern Pallet into a successful pallet company: don’t turn away business.
If there was money to be made on an order, they built the pallets — new or recycled. Tony told himself years ago that he never wanted to get so big that he would refuse to take an order for 15 pallets.
More than 15 years later, Tony is still doing business the same way. “We’ll build any amount of pallets for anybody if they’re willing to pay the price,” he said.
Recently, he found himself almost turning away a small order, but he took it. “Small orders can be very expensive,” he said, “but we will do them.”
The company’s commitment to service and its versatility are the reasons for its success, Tony believes, along with a dedicated workforce that is willing to adapt to challenges and get the job done. Success did not go unnoticed. Southern joined the PalEx fold last year.
Sixty percent of the business at PalEx-Southern is new pallets and 30% is recycled pallets. The other 10% of revenues comes from mulch sales.
The company has more than 400 customers, according to Tony. They represent such diverse industries as building supplies, cosmetics, computers, agriculture, beverage, automotive, and more. “You name it, we do it,” said Tony, whose father, now 65 and who retired in 1997, started the business with him in 1980. The company ships as far away as New Jersey, and brokers even place some orders in Chicago. Its customer base predominantly is within 150 miles, which covers portions of North Carolina, South Carolina, and Virginia.
PalEx-Southern does a heavy volume of block pallets, and it also deals in a large amount of odd-size pallet footprints. The company builds a lot of block pallets that are similar in size to the Euro-style block pallet. Common footprints in block-style are 42×42 and 48×42; PalEx-Southern also builds a 44×56 can pallet. Some customers use the block pallets to ship products overseas.
The company has about 150 employees. The workforce includes seven truck drivers, seven mechanics who work both on company vehicles and machinery, four office personnel, a full-time salesman, and three plant managers. The remainder are production workers in the pallet manufacturing or recycling operations or mulch production.
PalEx-Southern runs one shift. The plant managers are “working supervisors,” according to Tony; more often than not they can be found buzzing around the plant or yard on a forklift, not sitting behind a desk in an office.
PalEx-Southern has nearly a dozen buildings on 48 acres. It has four buildings devoted to pallet manufacturing and recycling, offices, a shop for its mechanics, one building that houses its colored mulch and mulch bagging operations, and several open-air sheds for storing inventory and incoming pallets.
One building is devoted primarily to new pallets and another for recycling. Smaller facilities obtained in the acquisition of a neighboring pallet company contain another, small production line for new pallets and space for specialty pallets that are assembled by hand.
In the company’s main new pallet facility, PalEx-Southern begins the manufacturing process with cants and 4/4 and 6/4 lumber. PalEx-Southern buys hardwood cants from suppliers in North Carolina, Virginia and South Carolina and also buys some green pine and kiln-dried pine. There are two principal production lines that begin at one end of the building, each with its own entry. One line begins with a WoodKraft cut-off system that feeds directly to a Pendu in-line notcher. The notched material feeds automatically into a WoodKraft gang saw to be sawn into stringers that are stacked by a Cornell machine. The other line begins with cants fed to a Brewer cut-off system. The Brewer line — which the company obtained in the acquisition, along with some other machinery — feeds into another WoodKraft gang saw that produces deck boards. Some pallet components also are made on a West Plains resaw system.
The company recently also began production on a third line after investing in a new Cornell cut-off system that was designed and built for bottom-cut trimming. The mill also is equipped with a Morgan single-head band resaw for cutting some material. Bundled 4/4 and 6/4 material goes to a an L-M Equipment package saw at the side of the mill; cants also occasionally are sized on the package saw. Finally, finished pallet parts are moved to one of three Viking automated pallet assembly machines. Two Viking Turbos operate side-by-side in the middle of the plant and a Viking Duomatic occupies the end of the building. The plant also houses about 10 work stations for assembling pallets by hand with nailing tools.
The recycling operation starts with more than 100 trailer vans that PalEx-Southern keeps at customer locations. Pallet cores are sorted under an open-sided shed into pallets that will be repaired, dismantled for lumber, or taken to the grinder. The recycling plant is two adjoining buildings; one houses the lumber recovery line and the other contains employees repairing pallets by hand or building pallets with recycled lumber. The lumber recovery line features four un-nailer machines. At one end, a Woodthorn Trio disc-type pallet dismantler, operated by one worker, is used to dismantle large pallets. Another worker at the other end of the Trio recovers good stringers, using a hammer to flatten any remaining nails and cutting off defects with a Heartland chop saw. Deck boards feed by conveyor to another worker who loads them onto an MSI Trim-Trac double trim saw, with another employee removing the finished material on the other end. The other part of the line features three bandsaw dismantlers — Industrial Resources and Smart machines — that are operated alongside a two-tier automated conveyor. The conveyors move in opposite directions. Deck boards go into one tier and at one end are sized on a second MSI Trim-Trac double trim saw. Stringers go into the other conveyor and at the opposite end of the line are segregated; a second Heartland chop saw is used to cut out defects. In the adjoining building, workers are repairing pallets and assembling pallets of recycled lumber, working on the floor, at tables and at jigs. The building also houses a Rayco nailing machine that the company recently set up and began running — it is another machine that was obtained in the acquisition. The Rayco is being used to assemble pallets made of recycled parts.
PalEx-Southern utilizes plating tools for repairing some stringers. For Tony, the arithmetic is simple. “I can increase the value of a stringer by $1” by repairing it with a plate that costs 20 cents, he noted.
“We can sell more recycled No. 1 GMAs,” said Tony, but the company turns down orders daily because it cannot get enough good cores. Although they have not been as hard hit by the dwindling core supply, Tony has noticed a significant decline in core quality. “Grade is getting worse and worse,” he said. “You can’t recycle them so many times.” However, he believes that the core supply is in for a boost: cheap lumber now in abundance will result in an influx of new pallets into the pool, he predicted.
PalEx-Southern does not station any employees at on-site customer locations for pallet recycling or repair. The company also currently does not manage any fully closed loops although it does recover and return a substantial number of pallets for some customers.
The third mill, housed in a building obtained in the acquisition, features another Brewer cut-up line. Sized cants are fed to a Brewer gang saw or a West Plains multi-head band resaw and then cleaned on a Brewer de-duster. In an adjoining building, about eight workers hand-build specialty pallets for a small group of customers.
The company also has an impressive operation for making mulch products and, according to Tony, is positioned to handle all grinding and mulch production for PalEx’s North Carolina plants. The company makes both standard and custom mulch products, including a playground surface covering, and sells them both wholesale and retail. It began with grinding equipment supplied by West Salem Machinery. The West Salem unit is still in use and is an integral part of Southern’s mulch production process. The company has added other equipment, however, in order to increase capacity. Its West Salem Machinery system now is used primarily to regrind oversize mulch. Another grinder supplied by Rotochopper converts scrap pallets and wood into ground fiber. Both machines, equipped with extensive conveyor systems, are located in the same shed. Finished mulch that is to be colored is moved by front-end loader to an adjacent yard where the coloring and bagging systems are located.
A Becker Underwood coloring system — reportedly the largest unit in the U.S., according to Tony — applies dye and mixes the fiber to produce colored mulch products. The company’s most popular seller is red. A conveyor piles the finished colored mulch outside, where loaders can move it to inventory or feed the company’s new bagging operation. The colored mulch is bagged — the bagging system was supplied by Amadas Industries — in clear plastic bags that carry the trade name Southern Mulch. Filled, sealed bags are conveyed to a pair of workers who stack them on a carousel. Finished unit loads of bagged mulch are shrink-wrapped. The company also has a Duratek tub grinder that it uses for producing mulch. Shavings are sold for animal or poultry bedding and sawdust is sold for boiler fuel.
The Fogleman family lived in Butner, where Tony grew up. After he graduated from high school, he went to work with his father in the family clothing business — Claude had two retail locations for Fogleman’s Men’s Shop. Within just a few short years, however, Claude embarked on a new career, and Tony went with him. He sold the clothing business, and father and son decided to try the pallet industry in 1980. They started out renting space in a defunct pallet mill. Claude began selling. When he got the first order, they bought some nailing tools and a flatbed truck and went to work. The only other equipment they had consisted of a radial arm saw and a compressor, so as they got started they relied heavily on purchasing pallet cut stock. Claude continued to devote his efforts to sales but also operated a forklift truck and helped to oversee day-to-day operations while Tony focused on management. The business grew fast, and they quickly began adding employees. Within a couple of years they outgrew their rented facility and moved to a new location in nearby Creedmoor in 1982. At their second home the company started buying cants, cutting them to size and sawing pallet lumber on a gang saw. In 1987 they moved the business to its current location in Butner, a suburb of Durham, the home of Duke University.
Southern has benefitted from joining PalEx because the larger company has greater buying power, Tony observed. “Health insurance definitely has decreased,” he said. The company is beginning to benefit more from the stronger buying power of PalEx, which can obtain some supplies at cheaper prices. Being affiliated with PalEx has not changed the way the company operates, according to Tony, because the business already was managed well and operated efficiently. “We’re kind of lean anyway,” he said.
In addition to the problem with declining pallet core quality, labor is a challenge. Like other employers, the economic boom has pushed down unemployment rates, and businesses are competing for good workers. In the current economic climate, turnover is considerable, Tony indicated.
PalEx-Southern is a member of the National Wooden Pallet and Container Association and local business organizations. Tony also is a member of a number of civic clubs and organizations in the Butner community although he confessed he has little time for attending their meetings. What spare time he has he likes to use for hunting or fishing. A veteran deer hunter, he recently began turkey hunting and this year killed his first spring gobbler. “I was ecstatic with that,” he recalled. “I’m going to get hooked on turkey hunting.” His wife, Betty, who works in the company’s offices, also is a hunter; the walls in her office are decorated with a number of her trophies. His daughter, Samantha, also workers in the office, and his brother-in-law, Gerald Oakley, is one of the plant managers, overseeing pallet recycling. Ben Farhbow supervises lumber production and new pallet production.
After talking about his company’s operations in his office, Tony returned to what he believes are the reasons for its success — its focus is on service and versatility, and committed production and management staff.
The company’s versatility has been critical to its success, he said. “I think we do it all really well,” he said. If the margins in an order are sufficient, the company is averse to turning away business. “If there’s enough money involved, we’ll do it,” said Tony. “We don’t rule anything out.”
“We’re one of the few that can do anything,” he added.
The Southern staff gets equal credit. “If it wasn’t for our dedicated employees, we couldn’t have made it to where we are,” he said. Time and time again they have been willing to do whatever was necessary to get the work done, he said. “We’ve been blessed with good personnel who will roll with the flow.”
