Pallet Company Expands into Metal Recycling: W4 Pallet Invests in Sweed Equipment Machine to Process Scrap Metal Material

DEQUINCY, Louisiana – When recycling for a wood market goes in the tank, what do you do? Try switching to metal.

                  Justin Wilkins, his brothers and father are equal owners in W4 Pallet, which started out as a pallet recycling business. Like some pallet entrepreneurs in the pallet industry, they launched the business by working in their spare time, rebuilding pallets in a shed at the home of their father, Dalton. The business prospered to the point the brothers eventually would work in it full-time.

                  However, their business was dramatically impacted by the economic collapse of 2008-2009.

                  “When the economy crashed, we didn’t’ have a lot of work,” explained Justin. To offset the decline in their business, the Wilkinses moved into a completely new direction: recycling metal. They began hauling away scrap metal banding out of Port of Lake Charles for an international shipping business with operations there. The metal bands were used to bundle lumber products and other imports.

                  The Wilkinses started by simply hauling the scrap metal banding for a fee, moving it to their pallet yard. Eventually, they accumulated 400 tons of material. They sold it to a scrap company that came on-site, bailed the bands, and hauled it off.

                  “The price of scrap metal has gone up so high,” noted Justin. Although the company’s pallet business had rebounded in recent years with its entry into the new pallet market, Justin and his brothers are aiming to build on the foothold they have gained in the metal recycling business. They recently made several investments, including a Sweed Machinery Inc. machine to chop metal banding, wire and cable. They also added a 25×30 area onto their shop for metal recycling operations. Metal will be hauled in on open-top trailers, and a knuckleboom loader will be used to reach inside and remove the material. When Justin talked to the Pallet Enterprise recently, the Sweed chopper was scheduled to be wired in a day or two so it could begin operations.

                  The company plans to sell its scrap metal through a broker to markets such as steel mills and also has sold some directly to a scrap metal business.

                  Although the company only has one primary customer so far for its metal recycling operations, it plans to expand and go after customers at other ports, too. They may invest in metal containers to stage to customer sites, too.

                  “As soon as we get it going we’re going to jump into a lot of different things,” said Justin.

                  Dequincy is located in southwest Louisiana, about 25 miles northwest of Lake Charles and just under 50 miles northeast of Beaumont, Texas. Lake Charles contains a major industrial port, the 11th largest in the U.S. by tonnage. The Calcasieu Ship Channel provides direct access to the Gulf of Mexico, 34 miles downstream from the city docks. The major commodity shipped on the river is crude oil. Other commodities include petroleum coke, calcined petroleum coke, limestone, gasoline, diesel, and jet fuel.

                  W4 Pallet’s customer is an international shipping business specializing in transporting forest products, non-ferrous metals, steel and other unitized break-bulk cargoes. Through its subsidiaries, Lake Charles Cargo Terminals and Arrow Terminals, the shipper provides a full range of warehousing and distribution services. Arrow Terminals was established in 2001 to handle the growing volume of forest products being shipped from South America to the U.S. through Port Manatee, Fla. In response to customer demand, the company established other facilities at Lake Charles as well as Pascagoula, Miss.

                  With the aid of the Internet, Justin researched Sweed and its equipment for a year or two before they decided to invest in the equipment. He was attracted to Sweed because he already was familiar with the company through the port’s metal recycling operations.

                  “I looked into it,” said Justin. “I couldn’t find another machine. That’s the only one I really know of.”

                  W4 Pallet purchased its Sweed Chopper through a Sweed distributor, J&B Container Co., Inc. in Woodstock, Ga. J.R. Jessee, the owner of J&B, had sold a Sweed metal chopper to the shipping company, but it decided to cease the recycling operations since it wasn’t part of its core business. Personnel there referred W4 Pallet to J.R.

                  “They have so much of this banding coming in it’s actually a good revenue source for them,” noted J.R. The pallet company has room to store the material so it can sell it when steel prices peak, he added.

                  J.R. represents Sweed and other manufacturers of recycling and materials handling equipment, serving customers in the Southeast and stretching to Texas, Illinois and Virginia.

                  The ports and some industrial businesses need companies that can come to their site and remove scrap metal banding, wire, and similar material, he noted. For example, there are several oil refineries in the region that have excess scrap wire. Some other metal recycling or scrap recovery businesses use drop-off boxes or bailing equipment, he said, and some use chopping equipment in their recycling operations.

                  W4 Pallet is currently producing about 3,000 pallets per week, including new and used. The business is split roughly 50-50 between new pallets and recycled pallets, said Justin.        

                  Some months the split may tilt more to new pallets. The company does a lot of business in recycled GMA pallets as well as 42×42, and also new and recycled 44×44 two-way pallets and 48×48.

                  Justin, 29, works in the company with his two older brothers, Cassidy and Jerad. (Their father retired two years ago but still advises his sons.) Justin runs the office and handles sales, Cassidy oversees trucking operations, and Jerad supervises the yard. Besides the brothers, the company employs about four to five workers.

                  W4 Pallet supplies pallets to a neighboring graphite plant where Cassidy used to work, an oil refinery where Dalton retired, and other energy-related businesses. “Most customers are within 50 miles, although we have a few customers that are 200 miles away,” said Justin.

W4 and Its Pallet Business

                  The idea to start the pallet business came from Cassidy and Dalton, who both worked at plants that accumulated excess pallets. In 2003, the four began recycling pallets out of a shed behind the father’s home on evenings and weekends while they continued their various occupations.

                  When they first started, Cassidy was working at the graphite plant. Jerad was an electrician, and Justin was attending community college to study drafting. Dalton, now 57, continued working at the refinery until his retirement two years ago.

                  After two years they bought 70 acres at an old plywood mill, including 13 acres of concrete slab, and put up a new building. With additions, the shop now is 30×250. When they set up their own shop, the brothers began working in the business full-time. They ran it with part-time help until they decided to expand into new pallet manufacturing in 2009 and began investing in more equipment and adding employees.

                  The company’s sales have doubled in the last two years with its entry into the new pallet market. “It’s just really picked up over the last two years,” said Justin.

                  “I guess the good Lord just blessed us,” added Justin. “A lot of prayers.” Many companies are still struggling, he noted.

                  For new pallets the company buys softwood material from Lincoln Lumber and LowGradeLumber, and some pre-cut hardwood material from mills in Arkansas. From Lincoln Lumber the company buys 2×4 to 2×12 random length pine. From mills in Arkansas, it buys 5/4 boards, 6 inches wide by 48 inches long, as well as some 1-inch deck boards.

                  Most new lumber is cut to length on the company’s Pacific Trail package saw, then split on a Morgan edger. “That’s an awesome machine,” said Justin, referring to the Pacific Trail machine. The package saw does the work that two men previously did and in half the time, he said. The remaining pieces are resawn into deck boards on either a Baker Products single-head band resaw or a Morgan single-head band resaw. The company also has a Smart Products double-head notching machine for notching stringers. Pallets are assembled by hand and also on a GAP nailing machine.

                  When it entered the new pallet arena, W4 Pallet began a series of investments in new equipment although the nailing machine was purchased used. The resaws were purchased new since 2009, and the company added the Morgan edger, the package saw, and the nailing machine in 2011.

                  The GAP nailing machine uses pneumatic nailing tools and collated nails. It has nailing tools on the top and bottom so the entire pallet can be nailed in one pass. It is typically set up with three nailing tools top and bottom although the company sometimes uses four for four-stringer pallets. The machine can assemble pallets made of recycled material although the company normally uses it for nailing new pallets.

                  With a two-man crew working the GAP, the company normally produces about 600 pallets during a normal shift, said Justin. The machine runs large coils of fasteners, and the company uses collated nails provided by Southern Fastening Systems. Individual pneumatic nailing tools for pallet repair and recycling are also used in the company’s operations.

                  The company buys Wood-Mizer band blades for its two resaws, and it buys other blades from Country Saw & Knife.

                  In its pallet recycling operations, W4 Pallet both assembles ‘new’ pallets made from recycled material and refurbishes damaged pallets. The company is equipped with several Smart Products machines for its pallet recycling operations – a bandsaw dismantler, trim saw, chop saw, and single-head notcher.

                  Two men normally run the dismantling machine a few days each week. The machine, which runs Lennox bandsaw blades supplied by Country Saw and Knife, is used to dismantle pallets in order to recycle stringers and deck boards.

                  Incoming pallets usually are sorted by size and staged on the yard to be recycled later although, depending on orders, some will go directly to be repaired. Cores are stored on two five-acre concrete slabs.

                  In its repair operations, two men normally will work together at a bench or table, removing them from a stack of cores staged at their work station, and typically pulling off the damaged leading edge deck board and replacing it with repair stock.

                  W4 Pallet also does some business in combination or ‘combo’ pallets – pallets made by combining new and recycled components. One customer, for example, buys a wing pallet made with new notched stringers and mainly recycled deck boards.

                  “We sell quite a few recycled pallets,” said Justin. “It’s a pretty good business. I’d like to be a (complete) recycled company because of the price of new lumber.”

                  Used pallet cores usually are trucked to the company on a haul-back from delivering new pallets. The company has a couple of customers for whom they leave a flatbed trailer to be loaded with used pallets. The company has a pair of trucks, two box vans and four flat beds.

                  For processing scrap material, the company uses a Bandit Beast model grinder.

                  The company just recently added a new 18-wheeler and now owns two trucks. In the next few years they may add a second nailing machine, said Justin. He is considering either a second GAP nailer or the Universal Machinery Sales Woodpecker nailing machine, he said.

Sweed a Partner in Recycling

                  Oregon-based Sweed Machinery Inc. is known in the industry for its technology, quality craftsmanship, customer service, and after-sale support.

                  Sweed scrap choppers and separation systems help companys eliminate their manufacturing by-products. They help keep scrap materials out of landfills and achieve recycling goals.

                  With an ever-expanding list of scrap materials – plastic and metal banding, doctor blades, baling wire and more – Sweed choppers have proven to be dependable in managing scrap recycling needs.

                  Sweed has attained prominence in recycling equipment for the forest products industry, wood and lumber, textiles, municipalities, utilities, large and small scrap processors, the beverage industry, the food-processing industry, the paper industry (including cardboard and paper board manufacturers), telecommunications, petroleum producers, retailers, metal fabricating, waste disposal, furniture manufacturing, wire manufacturing, the automotive industry, and sports equipment manufacturing.

                  While it was diversifying, Sweed also solidified its manufacturing systems and modernized its equipment to prepare for the rebirth of the wood products industry. It is poised and ready to equip U.S. and international timber processors with the finest material handling systems.

                  Sweed continues to be dedicated to refining proven products for a wide variety of industries while always offering custom engineering and manufacturing of systems to meet specific customer needs.

                  The Sweed model 5703 XHD Scrap Chopper, purchased by W4 Pallet as described in the accompanying article, is designed to meet the toughest linear metal recycling challenges. W4 Pallet will be using its scrap chopper to handle a high volume of stout steel banding. This chopper model is also especially suited for tough processing high volumes of ACSR and multi-strand communications cable.

                  The unique front opening feedworks, taper-lock flywheel/shaft assemblies, and high-performance bearings make the Sweed model 5703 XHD a tough chopper that is easy to service and maintain even when used in high-production environments.

                  Sweed has several models of scrap choppers to accommodate all forms of scrap, big and small. The Sweed model 5703 XHD Scrap Chopper is the largest chopper in their line-up and can be tuned to virtually any linear scrap chopping application—delivering exceptional power and quick payback.

                  For more information, visit www.sweed.com or call 866/800-7419.