POPLAR BLUFF, Missouri — A lot of things have been changing at Mid-Continent Nail since founder and former owner David Libla announced two years ago that he would step down as CEO at the end of 2015.
At the same time, however, much about the company is the same: it’s commitment to manufacturing quality nails for the pallet industry and providing it with strong service, and the continued leadership of members of the Libla family and other key company executives.
Located in Poplar Bluff in the southeast corner of Missouri, Mid-Continent is the largest manufacturer in the United States of bulk machine-quality nails for the pallet industry — bulk nails used in sophisticated automated nailing machines such as those manufactured by such suppliers as Viking Engineering, GBN Machine & Engineering, and Storti. It is also one of the largest manufacturers in the world of collated nails, including collated nails for the pallet industry.
Not only is Mid-Continent an important supplier and partner of the pallet industry, it is also an important member of the business community of Poplar Bluff, a small city of 17,000-plus people located on the edge of part of the Mark Twain National Forest. Mid-Continent provides jobs for more than 500 people in the rural community.
Two members of the Libla family — David’s son, Jeff, and daughter, Marsha — with lengthy experience in the pallet industry and Mid-Continent continue to hold key positions in the company. Marsha oversees customer service for all of the company’s divisions while Jeff, general manager, is responsible for all purchasing, production and shipping. Their father owned a pallet manufacturing company before launching Mid-Continent 30 years ago.
In addition to Marsha and Jeff, the company continues to benefit from the presence of other key executives with long careers at Mid-Continent. They include George Skarich, vice president of sales & marketing, and Kirk Henningsen, U.S. national sales manager;
Like Jeff, Marsha has a long history and familiarity with the pallet industry. She began working at her father’s pallet company as a teenager and continued after college. Her duties included administrative functions such as customer service, accounting and booking trucks.
Next year will mark her 20th year as an employee of Mid-Continent. As the company’s customer services manager she oversees a team of customer services representatives. Her duties also include managing inside sales of machine quality bulk nails and matters related to packaging the company’s products, and she serves as a liaison between production and sales.
The company is recognized in the industry for the quality of its nail products and its reliability and dependability as a supplier, she noted.
“We’re still doing business the exact same way,” stated Marsha, “and we still have a lot of the same staff and employees. We’ve been here for 30 years and plan on being here for another 30 years.”
Jeff also first worked in the pallet manufacturing business started by his father and later worked with the family when the Libla family launched Mid-Continent Nail. He managed Pasadena Pallet & Skid in Texas for two years. He then returned to Poplar Bluff and a role in Mid-Continent in 1999 when the company was beginning to experience significant growth. Jeff has held the positions of production and plant manager and now serves as operations general manager.
“My familiarity with the pallet industry is one reason we put so much emphasis on supplying bulk nails for the pallet industry,” said Jeff, who referred to it as the “heart and soul” of the business. He described his and Marsha’s roles as “the leaders behind the nail plant.”
“People can feel comfortable still dealing with us,” said Jeff. “The Libla family as a whole is still 100% involved.” In fact, David still serves on the company’s board of directors and is involved with key business decisions.
“The foundation of our success,” explained George Skarich, “is our people, teamwork, our culture, and… sustainable growth. Those are the big things for us.”
“Our main focus or goal…is to be easy to do business with,” he added, to provide “world class service.”
“If we do that, we will always have the ability to grow,” said Skarich.
“We sell on the total package,” boasted Kirk Henningsen. The company emphasizes product quality, strong customer service, and its ability to meet customer requirements. “All three of those things have kept us being the number one supplier to the pallet industry.”
So, if Mid-Continent still has the same leadership, the same approach to doing business and the same company culture, what’s different?
Plenty. The company has invested about $6 million in plant and equipment over the past two years.
“A lot of this is expansion and automation to stay competitive with the global market we compete against,” said Henningsen.
Those investments included adding manufacturing equipment, automating some processes, and returning some plant space to use. Mid-Continent now operates one specific facility for the pallet industry.
The company plans an additional $2 million in capital improvements in 2017, said Henningsen. Next year’s improvements will continue to focus on automating some operations and expanding manufacturing capability.
“We are the largest domestic nail manufacturer in the United States,” commented Skarich. “To continue to do so, we have to re-invest.”
“We see a real future here,” he added.
“We’re in a small rural community,” explained Skarich, “and it’s important that we continue to do this for the community. We’re focusing on doing what we have to in order to compete with the rest of the world.”
Mid-Continent is located on 25 acres in a sprawling building that encompasses three plants that produce more than 100 million nails daily. The facility for manufacturing collated nails encompasses about 320,000 square feet; bulk nail production, 180,000; and the portion where nails are collated with paper tape, about 100,000. The company also has two warehouses. In all, its operations comprise about 660,000 square feet under roof.
“We’re kind of in the center” of U.S. pallet production, noted George. “We happen to be in a good spot for that,” within reach of large pallet manufacturing companies in states like Missouri, Ohio, Indiana and Texas.
The manufacturing process is similar for both bulk and collated nails. The company buys large coils of wire rod ¼-inch in diameter. It is first processed by machines that draw the wire down to the diameter required for manufacturing nails, then stored for later use.
The processed wire is drawn into a machine that cuts it to length, puts a point on the end, and hammers the head to the correct size — all at high speed. The nails are then aligned to go through the next process. If they are going to be threaded or ring-shanked nails, they go through tooling that cuts the threads or rings. Collated nails then go through processes to collate them either with strips of wire welded to the nails or with plastic. Constant inspections ensure quality in the manufacturing operations as do quality control checks using process gauges. There are a few variations to the processes. Automation is used in some operations to move and palletize boxes of finished nail products.
Approximately 65-70% of the company’s nail sales are for collated nails while bulk nails make up the remaining 30-35%.
Since its inception, Mid-Continent has sold bulk machine-quality nails directly to pallet manufacturing businesses, and it continues to do so. Only a very small percentage of its bulk nail production is sold to distributors. Collated nails, on the other hand, are sold primarily to distributors for the pallet and home construction markets.
Mid-Continent operates an affiliated trucking business with 25 tractor-trailers to ensure it can be responsive to customers. “If we were held captive to buying all our freight, we would not be able to respond in a timely manner,” said Skarich.
Bulk machine-quality nails are sold primarily to leading pallet manufacturing companies east of the Mississippi River that buy in large quantities. In fact, about 90% of nails supplied to the pallet industry are sold by truck-load quantity, according to Skarich.
In terms of nailing equipment and fasteners, pallet companies fall into one of three groups, observed Henningsen. Some pallet companies use automated nailing machines that use bulk nails. Others use automated nailing machines that utilize pneumatic nailing tools and collated nails. The third group consists of pallet companies that use only pneumatic nailing tools to assemble pallets by hand.
Although Mid-Continent got its start manufacturing machine-quality bulk nails, it has made a “natural progression” into producing collated nails, said Henningsen. “We’ve grown in collated,” he added.
The company has grown market share of collated nail sales while the market for bulk nail sales has matured, acknowledged Henningsen. “Yes, for us the coil nail business is growing faster.
The maturation of the market for bulk nails has coincided with consolidation in the pallet industry in recent years, noted Henningsen, just as in other industries — bigger businesses absorbing smaller companies.
The use of collated nails in the pallet industry has “really grown” in the pallet industry over the past 10-15 years, Marsha acknowledged. A number of new equipment manufacturers entered the market with pallet assembly machines that use mounted pneumatic nailers. “We’ve been real flexible,” she said, and helped develop new nail products for those companies and their customers. Mid-Continent also has helped develop new nails for other applications, she added.
Machines that use mounted pneumatic nailers cost much less compared to machines that use bulk nails, explained Henningsen, so the cost of entry to pallet manufacturing is less. In addition, many pallet companies that assemble pallets by hand have the benefit of using tools that are loaned to them from suppliers; those suppliers make their money on sales of collated nails.
Even in the case of machines that use mounted pneumatic nailing tools, those tools may be provided free by suppliers that sell collated nails to those pallet companies. Henningsen estimated the pallet industry is divided roughly 50-50 between companies that assembly pallets with bulk nails and those that use collated nails.
However, as a company grows, automated nailing machines using bulk nails may become more attractive because — among other factors — bulk nails are less expensive than collated nails.
That price differential between bulk nails and collated nails also has narrowed significantly, according to Marsha. There was a time when bulk nails were approximately 30% cheaper than collated nails. However, that figure now is probably closer to 10% or even less, she suggested.
Mid-Continent is organized in three divisions. The wire division, the largest, supplies wire rod to other companies in the U.S. to make anything from fencing to bobby pins. The fastener division, operating as Mid-Continent Nail, is the next-largest in size; about 60% of the company’s fasteners are supplied to the construction industry for building single family homes and multi-family buildings, and 40% are supplied to the wooden pallet and container industry. (The fastener division also supplies and services pneumatic nailing tools to companies that need them.) The company’s agricultural division manufactures such products as fencing, bailing wire, and staples. An affiliated business unit based in Arizona converts rebar to structural steel welded reinforcements used in the construction of parking garages and other buildings.
“We’ve been extremely reliable for the pallet industry for the past 30 years, and we’re looking forward to the next 30 years,” said Jeff.
Edwards Wood Products in Marshville, N.C., one of the largest pallet manufacturers in the Southeast, has been buying bulk machine nails from Mid-Continent since the Missouri company began producing them. Perhaps more importantly, it has purchased nails from Mid-Continent continuously since then.
Jeff Edwards, president and owner of Edwards Wood Products, explained the reasons why. “They’re reliable,” he said. “They’re made in the states. That’s pretty big for us.”
“They’ve provided a quality product and timely delivery,” added Edwards.
Another thing that Jeff Edwards appreciates about his relationship with Mid-Continent is that he does not need to shop the market for nail prices because his supplier gives him the benefit of reductions in the cost of raw material. “If there is a drop in steel prices, they will come to you,” said Edwards, with a price reduction. “That’s unusual in this day and time.”
“They’re proactive about that kind of thing,” he added. “That says a lot about the kind of people we do business with.”
