Growth at Fla.-Based Pallet Consultants Is Sustained, Selective and Structured

POMPANO BEACH, Florida — Rapid growth is great, and Pallet Consultants Inc. can cite many numbers that illustrate its own fast growth — including a 23% increase in overseas sales so far this year.

            Yet carefully structured expansion is the hallmark of Pallet Consultants, a holding company in its ninth year of business. In fact, Gus Gutierrez, the company’s CEO, gives just as much attention to the organization of the company as he does to the operations of manufacturing and recycling pallets.

            Pallet Consultants supplies new and remanufactured pallets as well as related services, such as pallet sorting, pallet banking and logistics. From its three Florida locations in Haines City, Fort Myers and Pompano Beach and a fourth facility in Atlanta, Pallet Consultants serves customers across the U.S. and in Central America and South America. The company also has a growing roster of affiliated pallet suppliers that now stands at 16.

            “Through our entire operation, we handle approximately 755,000 pallets per month,” said Gus, “processed and handled out of just four facilities. Pompano Beach handles about 200,000, including CHEP. Haines City, 100,000. Fort Myers, 35,000, and Atlanta, approximately 320,000. Our brokerage division accounts for an additional 100,000 pallets per month. This includes affiliates.”

            As a holding company, Pallet Consultants seeks to expand its ownership stake in firms under its umbrella and to acquire pallet companies that complement its operations. For instance, this year Pallet Consultants acquired full ownership of another pallet supplier in Haines City, Pallet Associates Inc. In September Pallet Consultants also is scheduled to acquire Pallet Central Brokerage Inc. in central Florida.

            Tailoring operations for efficiency drives innovations at Pallet Consultants. The results speak to the success of the approach. “We have exceeded our second quarter numbers with a 19% increase in revenue,” said Gus, “surpassing our forecasted mark.”

            Gus has years of experience in the pallet industry on which to base his business decisions. He also taps his formal education in business, having earned undergraduate and graduate degrees in business from the University of Puerto Rico in San Juan. And he relies on the expertise of key management team members.

            Al Longman, national sales director for Pallet Consultants, recently has been evaluating mulch markets. “The mulch we are currently producing is a work in progress,” said Al. The company uses a West Salem grinder at its Atlanta facility to process wood waste into mulch.

            The company’s biggest market for wood waste grindings is boiler fuel, and mulch sold wholesale is second. Pallet Consultants also is entering the colored mulch arena. “We have decided to order a colorizing unit and market wholesale colored mulch,” said Al.

            The company is considering spinning off a separate landscaping business. The landscaping division would sell the company’s colored mulch and also apply it for retail customers. “We have the moxie to go after the market,” said Al.

            Another team member has been instrumental in helping Gus make some changes in operations to supply heat-treated pallets. In order to meet standards set by the IPPC (International Plant Protection Commission), Pallet Consultants added a TEMP-AIR thermal remediation system. “Eddie Dyess, division president of Pallet Consultants in central Florida …came to me with information on TEMP-AIR,” said Gus.

            TEMP-AIR is a division of RUPP Industries Inc. in Burnsville, Minn. When Pallet Consultants began operating the TEMP-AIR thermal remediation system, it consolidated heat treating activities at Haines City.

            The TEMP-AIR system is used to heat-treat pallet components and pallets. It has enabled Pallet Consultants “to maximize…loads of treated product for shipping to any facility closest to the customer in need,” said Gus.

            The TEMP-AIR chamber holds the equivalent of two truckloads of pallets. It is heated with propane and loaded with forklifts. Stafford Inspection and Consulting Services audits the results of heat-treatment and verifies that IPPC standards are met so the lumber can be marked with the heat-treating stamp.

            Pallet Consultants buys mixed hardwood cut stock. As an example, for GMA pallets it buys 5/8-inch deck boards in 4-inch and 6-inch widths, 40 inches long, and stringers – notched and not notched – 1-3/8 by 3- ½, 48 inches long. For custom pallets the company buys 1×4 in 12-foot lengths and 2×4 in 8-foot, 10-foot and 12-foot lengths.

            The company is considering buying a sawmill. “In the near future, we plan to open a sawmill near our Georgia facility,” said Gus. The mill would produce cut stock for Pallet Consultants and also sell surplus cut stock to other pallet manufacturers. Another idea under consideration: importing lumber from South America, most likely eucalyptus.

            John Gamez, vice president of operations at Pallet Consultants, helps Gus to continually analyze and evaluate management information from all parts of the holding company.

            Pallet Consultants employs as many as 300 at its four core installations and its brokerage business. “It bounces between 220 and 300 with the season,” said Gus. The company increases production of GMA pallets for Florida growers to ship mid-winter and spring crops.

            Affiliates of Pallet Consultants maintain separate employee payrolls although purchasing of some supplies and raw materials is consolidated where feasible.

            Frank Gutierrez, operations director, has been considering how Pallet Consultants might manufacture saw blades for its own use and to sell to other companies. For now, however, it is not easy to beat Saw Service & Supply, said Gus. “We generally purchase our blades form Saw Service & Supply,” he said. “They are reliable and professional…the kind of vendor committed to providing [us] with a quality product and great service.” The company uses mainly disposable saw blades; nondisposable blades are picked up and serviced by a local supplier for each plant.

            Custom pallets are assembled by hand with Stanley-Bostitch power nailing tools. “Stanley-Bostitch provides us with great on-site service at all of our locations,” said Gus. “Normally, we would use a typical 2-inch screw-shank nail. But there are custom pallets with thicker deck boards that require a 2-1/2-inch to 3-inch screw-shank nail.”

            John is looking closely at the pros and cons of automating the company’s pallet repair and assembly operations. If the company moves in that direction, it may do so next year.

            “In Atlanta we have installed a semi-automatic pallet dismantling system,” said Gus. It consists of two Smart Products 64-inch dismantling machines, a 55-foot conveyor, two Smart Products power-feed trim saws and a Samuel Kent Baker Inc. 12-foot powered round table. Lumber recovery operations at the Atlanta plant also are equipped with two additional Smart Products power-feed trim saws and a Smart Products manual trim saw. A Baker Products single-head notching machine is used for notching stringers.

            The Atlanta facility is an example of the planning that Gus and his management team have put into the layout and design of the plants. It was built from the ground up. The 40,000-square-foot building, situated on 14 acres, has 68 docks, which allow for trailers to be unloaded on one side and loaded on the other.

            The Haines City facility is designed and equipped similarly as the Atlanta plant, said Gus. It also has a Bronco Pallet Systems semi-automated nailing station for pallet assembly.

            Pallet Consultants has long relied on the Innovative Data Systems (IDS) Pallet Track ® system to determine its daily inventory of pallets at Pompano Beach, and it has added the system to its Atlanta and Haines City locations. Pallets are tagged with bar code labels, and the tracking system helps monitor inventory and sales and provide information for payroll calculations.

            “We believe we’re better in tune with trends than any of our competition,” said Gus. “We’ve got a feel for market conditions,” he explained.

            That “feel” comes from several quarters. Working with affiliates is important. So is the composition of the team that runs Pallet Consultants.

            Gus credited Al with helping the company increase sales 40%. In less than a year, Pallet Consultants has nearly doubled in size.

            Al trains and supervises eight sales associates. “What is important is to have a flexible and empowered sales service staff that can make decisions quickly,” said Al. Being responsive to customers and ever-changing market conditions has fueled sales. The Pallet Consultants sales associates view their role as a partner and advisor to customers, and cultivating long-term customer relationships is a priority.

            Sales associates are assigned regions. However, they can make sales anywhere thanks to a sophisticated centralized purchasing and accounting system.

            Pallet Consultants promises 24-hour service to any location in the Southeast. Within 150 miles of its core facilities the company uses its own tractors and trailers. Delivery routes are well planned in order to minimize miles and keep the trucks moving at optimum speed.

            “To help keep rein over this growth and consolidate all of our facilities, we are implementing a state-of-the-art accounting system,” said Gus. “It will not only help at our current size but will…help catapult us into the next phase of our growth and expansion plans.”

            Pallet Consultants purchased its corporate headquarters in Pompano Beach in July. The company previously has been leasing the 106,000-square-foot warehouse, situated on 5.5 acres just two blocks from Interstate 95 and about 35 miles north of Miami.

            Gus was recently elected chairman by the company’s board of directors; he assumes the dual role of CEO and chairman in September, when the company also expects to name a chief financial officer and senior director.

            All the changes in the works at Pallet Consultants are made with a single goal in mind: meeting the needs of its customer. “Pallet Consultants aims to give our customers choice, convenience and flexibility,” said Gus.

            Pallet Consultants emphasizes three Rs in its operations: Reduce waste, Reuse material, and Recycle the remainder. The philosophy not only benefits the environment, but it also nudges the company to look for ways to add value or extract maximum value from every product it handles. The company also collects cardboard and similar packaging material, bundles it and sends it to a recycler to be remanufactured eventually into paperboard.