SPARTANBURG, South Carolina – Eric Foust, the owner and manager of Custom Forest Product, returned to his family’s roots in the forest products wood industry after brief detours in college and law school.
"My grandfather used to love to tell everyone that his grandson needed to put on his business card that he was ‘an attorney at lumber’," recalled Eric, who graduated from Washington and Lee University in Virginia and then earned his law degree from the University of South Carolina.
"But I discovered while at USC that I had always had an interest in the business side of things. About half-way through my first year, I realized there wasn’t anything that seemed to really ground me in law. I ended up using my time there to receive more of a business law degree, taking tax law, employment law, worker’s compensation and any course I felt would be beneficial to running a business."
Eric went on to take challenging courses in which he had an interest — not worrying that some may have the toughest professors — with the knowledge that he would not be practicing law when he graduated. His father, Gene, who has been in the lumber business all his life, graduated from North Carolina State University.
From 1995 until a transition in 2002, Eric worked with his father in Spartanburg, S.C., at FairForest Lumber Sales. The company’s principal market was industrial lumber sales, supplying lumber products for the roof truss industry, which Eric and Gene still do. "That market was actually starting to get very squeezed," said Eric.
Eric formed a partnership with Jamie Gilbert of Custom Pallet & Crating in Charlotte, N.C. in 2002. Eric managed Custom Pallet’s Spartanburg location. After a year, Eric bought the facility from Jamie and officially launched Custom Forest Products. The company now has 55 employees.
"Jamie Gilbert is a class act, and he taught me a lot about the industry — as has my dad, Gene, who is vice president of sales for our company," said Eric. "I still learn from my dad — who is here at work — on a daily basis."
Although Custom Forest Products has only been in business two years, key management and supervisors bring a combined 145 years of experience in the lumber and pallet industries. Zane Wall, for example, vice president of manufacturing, has worked with the Foust family for over 20 years. He runs the production facility "and is invaluable to keeping our customers satisfied," said Eric.
Custom Forest Products has 10 acres with about 7,500 square feet under roof. It is located near a four lane highway that connects two major interstates, I-26 and I-85, which bisect Spartanburg.
Custom Forest Products has annual sales of $5-6 million. About half of sales are lumber products to the roof truss industry. Boozer Lumber, a large South Carolina truss manufacturer, is the biggest customer.
Custom Forest Products buys much of its low-grade softwood lumber through Spartanburg Forest Products. Bundles of lumber are cut to length on a Pacific Trail cross-cut package saw for sale to Boozer Lumber and other lumber and building supply businesses.
Pallets account for the other half of sales – new pallets, combination or ‘combo’ pallets, and recycled pallets. "In the pallet end of our business, we are primarily dealing with specialty sizes," Eric said. "There are several companies out there that deal in the commodity pallet market. Because we’re willing to take smaller orders, we fill the niche for pallet sizes that the larger companies don’t want to deal with."
Custom’s largest customer requires new pallets, but the company’s largest customer base is businesses that buy combination and recycled pallets.
Custom Forest Products buys rough hardwood lumber and remanufactures the material into deck boards and stringers for pallets. Its principal lumber remanufacturing equipment consists of a Morgan Saw Co. Scragmate and a Morgan four-head band resaw system, and a pair of Baker Products band resaws.
With the Morgan Scragmate, the company can remanufacture random width lumber into the widths it requires. The Scragmate runs four circular saw blades on a single arbor.
"We might take random width lumber, run it through the Morgan Scragmate to turn it into two by fours, and then run it through our Baker resaw to make them into pallet boards," said Eric. "The Morgan Scragmate is set up in line with a Morgan four-head saw, which will take thicker wood, three by fours, four by fours and four by sixes – making several pieces in one pass. So we are set up to do that, too." The company’s saw blades are supplied by Wood-Mizer and also Saw Service & Suppply.
In its pallet recycling operations, the company is equipped with a Smart Products bandsaw dismantler to disassemble used pallets. Recycled lumber from the dismantled pallets is conveyed to a Pallet Repair Systems Optimax trim saw to be cut to the appropriate length.
Custom Forest Products uses Max power nailing tools and collated nails distributed by Duo-Fast for assembling pallets and performing repairs. Eric has recently been evaluating whether the company should invest in automated pallet assembly equipment.
The company takes a monthly inventory. "We physically count to put our hands on our inventory," explained Eric. "It takes a day and a half to do, but we feel comfortable with this. We know exactly what we have, and our managers know on a regular basis what we’ve got. Bar coding just doesn’t seem to fit us right now."
Custom Forest Products recently invested in a Rotochopper to grind scrap wood material and color it to produce colored mulch. The company accumulates scrap for about two weeks, then processes it in the Rotochopper. The wood goes through two grinds in order to reduce it to the appropriate size, and it is colored red or black. The Rotochopper grinds wood into mulch and also colors it in a single pass through the machine. Scrap material that previously was sent to a landfill – and cost the company in tipping fees — now is being recycled into a value-added product for landscaping businesses.
The Spartanburg area is enjoying tremendous growth in new home sales, which provides a ready market for landscaping mulch. Eric’s company sells mulch wholesale to retail mulch yards. The mulch operations are new, and so far mulch accounts for less than 1% of sales for Custom Forest Products.
When it comes to sales and marketing, most of the company’s new business for pallets and other products has been generated by word-of-mouth referrals. Because Custom Forest Products has been fortunate to be in a high-growth area, a Yellow Pages advertisement has proved adequate to promote the company in the community. The company is a member of the National Wooden Pallet and Container Association (NWPCA), and that affiliation has generated sales leads and calls through the NWPCA Web site. The business also is a member of the Spartanburg Chamber of Commerce.
Spartanburg, like much of the Piedmont and upstate of the Carolinas, has been hard-hit by major losses in textile mill jobs in the past decade. The global economy has sent textile jobs to other areas of the world where labor is cheap. Fortunately, BMW Corporation opened a major U.S. assembly plant within 10 miles of Custom Forest Products.
"We have been really blessed with all the sales to outfits that supply BMW," Eric said. "We work with brake manufacturers and other suppliers to BMW as well as places not directly connected to them."
Because Custom Forest Products is a fairly young business, it was not so adversely impacted by the demise of the textile industry. However, other pallet suppliers with customers in the textile industry suffered. The BMW plant has helped turned things around. "In my opinion, BMW basically kept this community from becoming a ghost town in many ways," said Eric. "A lot of investment has since come into this area as a result."
The company buys low-grade hardwood lumber from sawmills in the region. Custom Forest Products sends one of its own trucks to pick up the material, which is stored on the yard. Recycled lumber is stored at the rear of the yard. The property has a rail spur although the company is not using it for shipping or receiving.
Custom Forest Products offers a 401k plan for employees as well as a limited health insurance plan. It has a large Hispanic workforce.
"We’ve been very blessed to have these workers," said Eric. "They really do care about their work. They come to us mainly through word-of-mouth. We have three or four families representing the different workers. When one worker has to leave, often a cousin or other relative will come in to replace the worker who’s leaving. The worker about to leave will train his replacement for us. Their main motivation in the hard work they do is to send money home to their families."
When asked why more local workers do not take jobs at the company, Eric echoed the sentiment of employers in the state, in industries such as agriculture, landscaping or low-paying factory jobs.
"If we try to hire at the rate of pay this industry affords, the folks that would come in would be gone the next day," Eric explained. "They’re probably unemployable — they don’t want to work or they cannot work for an extended period of time, whatever the case may be. The Hispanic workforce is thus performing a job that otherwise we would have a hard time getting done. They are a part of the work landscape now, and future issues in work relations for generations will be involved with questions of how to best interact and even compete in the workplace with Hispanics – as well as everyone else."
Eric found the recent Pallet Enterprise article published in Spanish to be very beneficial. The article, published in the April issue, focused on safety in using power nailing tools and bandsaw dismantling machines. Eric is looking forward to more articles in Spanish.
"That was a great idea and a good resource," he said. "It’s hard to find inexpensive translation resources out there for us. Of course, it doesn’t always work to get directions written in Spanish – especially if your workers can’t even read Spanish. Fortunately we have one employee who does read Spanish and can explain things to the other workers."
When it comes to overall business strategy for Custom Forest Products, Eric keeps things simple. "We try to keep in mind that we are always working for the customer. The customer owns our business. They do ultimately write all our paychecks, and we always try to keep that in mind."
