HASSELT, Netherlands — When it comes to successfully managing a pallet business — or for that matter, just about any business — it is in no small part about combining the best of what you have with the best of what is new.
This is the case whether it is a veteran family business bringing an energetic new generation into leadership roles to complement decades of experience, or an efficient, mature plant bringing in new technology and managers to boost production and provide new perspective.
Such is the case of Phoenix-Pallets, located in an industrial park in the town of Hasselt, about an hour by train to the northeast from Amsterdam’s Central Station. The company is one of the leading pallet manufacturing businesses in The Netherlands.
The plant is housed in a modern facility built in 1995 and located on about 100,000 square yards of land. It combines old and new — the latest in robotic technology and mature but reliable equipment — to produce over 3 million pallets yearly. The company added three robots to increase output on its pallet production lines, which are anchored by Gunn Vanderloo and Corali automated nailing systems.
After a short taxi ride from the local train station, I was greeted in the reception area by H.P. Herwig, the director of Phoenix-Pallets. With around 125 employees, the plant is one of the top three Dutch pallet manufacturing operations, according to H.P. Three of the bigger plants in the Netherlands, including Phoenix-Pallets, are owned by the Netherlands-based Faber Halbertsma Group. Faber Halbertsma produces 18 million pallets per year at its eight plants in The Netherlands, Belgium, Germany and France. Faber Halbertsma Group (FHG) also operates pallet pools for the electrical, chemical and food industries totaling over 30 million trips annually, making it one of the largest European pallet pool providers after CHEP.
Phoenix-Pallets has roots that go back to the 1920s. The company, established in the nearby town of Halfweg, specialized in building wooden cases and crates for domestic use as well as export. In 1929, however, a fire destroyed the plant. "But just like the bird from the Egyptian myth," the company’s Web site explains, "the company rose out of the ashes and gave itself a new name: Phoenix."
After rebuilding, the company quickly gained a national reputation in the wooden packaging market with its slogan, ‘Ever had a case, crate or barrel from the Phoenix?’ The company prospered until the sixties, when the market for its wooden specialty products began to gradually diminish in the face of competition from alternative materials. Faced with this downturn, Phoenix turned its attention to wooden pallet production, which it launched in Hasselt. The Halfweg factory closed in 1985.
Phoenix-Pallets became part of the Faber Halbertsma Group in 1990. In 1993 it became the first pallet producer to obtain ISO-9001 certification. In 1995, the company moved to a new factory on the outskirts of Hasselt, where it is located today.
"The general rule is one pallet per inhabitant per year," said H.P., explaining a rule of thumb for estimating pallet production in his country. "So in The Netherlands, that translates into about 16 million pallets manufactured yearly."
Like Phoenix-Pallets, H.P. clearly was a quick study in the pallet industry. He is an engineer by training and has extensive manufacturing experience, but he has only been employed in the pallet industry with Phoenix for a few years.
Phoenix-Pallets manufactures a variety of pallets. The pallet market in The Netherlands is a "hybrid market," H.P. explained, with EUR pallets, pallet pools and custom pallets. "No one system is very dominant," said.
The Dutch pallet market is notably different from Germany, Spain or France, he added. Germany has a strong EPAL pallet presence, Spain has a very strong CHEP market share, and France is characterized by strong pallet pools operated by CHEP, LPR and IPP Logipal. "It makes for a very interesting market," H.P. said wryly.
Only a few of the major Dutch pallet companies buy and sell used pallets. While Phoenix-Pallets provides some pallet repair services to large new pallet customers, most of the largest pallet companies specialize only in manufacturing new pallets. As in the U.S., larger manufacturing businesses tend to use larger pallet suppliers, such as Phoenix-Pallets, while smaller pallet companies compete successfully on smaller accounts.
Competition stretches beyond the borders of the Netherlands. H.P. reported that high volume German pallet manufacturers sell a lot of Europallets into the Dutch market. One major German plant produces 4 million Europallets a year compared to about 800,000 for Phoenix. The Dutch, on the other hand, can compete outside the Netherlands on very high quality custom pallets, which is their hallmark.
As president of the Dutch national committee for EPAL, H.P. has strong views on the EPAL system. "The Europallet (EPAL) is an interesting phenomenon in the Dutch market," H.P. noted. Because The Netherlands is a relatively small market, it was not a high priority in the past for EPAL. "As a result, there are a lot of counterfeit EPAL pallets in the Dutch market," said H.P.
"Licensed people are regulated," H.P. added "Unlicensed people are the big problem. We need somebody to make sure it is working, to oversee. Then we will see two things. First, an increase in demand for licensed partners, and also increased prices because there will be less opportunity to undercut." EPAL tries to inspect new pallets coming into the market through inspection of both new manufacturers and recyclers.
As for the effectiveness of the EPAL system versus other pools, H.P. emphasized that Phoenix-Pallets’ parent company, Faber Halbertsma Group, runs both open and closed loop systems. "I think a well run open system (like EPAL) can be efficient," he said, "but there is always room for a commercial pool."
There are significant challenges to running an international pallet pool like EPAL, H.P. noted. "You have very different cultures," he explained. For example, the Germans and French think differently. "You need strong leadership. Then you can get everyone’s interests lined up."
He feels that EPAL is now headed in that direction under the direction of its current board and the management team, headed up by wood industry veteran Maurizio Ciani, its Milan-based CEO, and the tireless Cesare Furlanetto, EPAL supervisor.
While Phoenix-Pallets is just one of eight FHG pallet suppliers, it enjoys a great deal of independence in its operations. "Mr. Faber is an entrepreneur," H.P. explained. "His view of pallet companies is that each one should be run independently. Each shows a profit and loss."
Within the Faber Halbertsma Group, for example, sales are handled separately at each pallet supplier; there is no centralization. However, the company does centralize the function of buying raw material and also has centralized financial services. A subsidiary, Satim-Halba, buys lumber all over the world for the different companies of the group.
Faber Halbertsma Group manufactures a substantial amount of pool pallets annually. "The pooling new pallet business is put out to tender," H.P. explained. "We don’t want to be too dependent upon it," he said, because the business is very unpredictable. He has to be careful to have a mix of business, pooling pallets and custom pallets. "You have to decide whether to carry huge inventory or reduce that business."
The commercial pallet pools typically provide short lead times on orders and are unpredictable. A pallet manufacturer has to ramp up production to meet big orders for rental pool pallets and then scrambles when they suddenly drop off. In order to compensate for these kind of fluctuations, Phoenix-Pallets concentrates on custom pallets, too.
Most of the Phoenix-Pallets production of 3.2 million pallets per year consists of block pallets although the company also manufactures stringer pallets. Walking through the company’s yard, there is ample evidence of rental pool pallets as well as EPAL and multi-use proprietary pallets.
Stringer pallets are not widely used in the Netherlands although they are popular for use in the building products industry for heavy loads, such as masonry supplies. "In Italy there still are a lot of stringer pallets for ceramics," said H.P., "but not a lot in our market."
The business that buys lumber for the Faber Halbertsma Group companies purchases lumber mainly from Germany, Eastern Europe and Scandinavia. In the past it also has bought a considerable volume of lumber from Portugal.
Phoenix-Pallets was the first pallet manufacturer in The Netherlands to become certified to supply heat-treated pallets. The company now has four heat-treating chambers, including two Nardi kilns and two supplied by the HB Group, a Dutch manufacturer. One of the Dutch units utilizes super-heated steam drying; it operates on a pressure cooker approach and does not exhaust air until the chamber reaches a certain temperature, H.P. explained. "Normal drying temperature is 85 degrees centigrade," he noted, but this particular Dutch system reaches 105 degrees. It has a faster cycle time and uses less energy.
Production at Phoenix-Pallets begins with a Kallfas block cutting saw and Zimac vacuum block lifting units as well as a Stenner vertical resaw and four planers. On the day of my visit, the Stenner was splitting boards to thin, 10mm stock for beer export pallets. The planers help address the hygienic concerns of the food industry, which prefers a smooth top deck, H.P. explained.
In its pallet assembly operations, Phoenix-Pallets runs several nailing lines and deck lines. Europallets are nailed on a Gunn Vanderloo machine, which is a Dutch manufacturer. It is "very reliable," said H.P. The plant also is equipped with nailing machines made by Corali, an Italian supplier; one of them is the fastest nailing machine H.P. has seen even though it is 25 years old.
The three robots used in the company’s plants were made by NoTech Consulting AB of Sweden. One is used at the end of a NoTech machine that stacks pallet decks. When the stack is full, the conveyor advances it to a position for forklift access, and the puts another pallet on the conveyor and begins another stacking cycle.
The other robots are used similarly; they pick up pallet decks from a stack and place them on roller conveyors feeding automated nailing machines.
Automation has two key benefits, H.P. noted. "Firstly, it improves productivity. And secondly, it decreases the working load on people. We want to make sure that work is acceptable in then long run. If safer work can be combined with productivity, that is a good thing."
For Phoenix-Pallets, blending the best of new technology with its existing expertise has been a very good thing.
