A fire that strikes at the wrong time can expose the limits of an operation. It can also cast a spotlight on a company’s core strengths.
For Madeca, a vertically integrated Portuguese sawmill and new pallet manufacturing company, a 2021 fire at its main plant came at the peak of one of the strongest pallet markets in recent history. Fueled by the COVID-19 pandemic, demand was surging across Europe, and new equipment was largely unavailable. Instead of potentially waiting years for replacement machinery, Madeca chose to do what it does best. The company rebuilt and upgraded the equipment it already knew. That decision reflects an operating philosophy built on maintenance excellence, flexibility and a long-term view of performance.
From Forestry to Pallets
Madeca’s origins trace back to 1904, when the Verdasca family, which already owned timberland, became involved with partners in an early sawmilling venture. The Verdasca family bought out those partners in 1952, and the company was rebranded as Madeca. The business became heavily involved in wooden crate production in the 1960s, including a large program of bins used for citrus fruit shipments from South Africa. Pallets gradually became a staple of the company’s product mix in the 1970s.
Today, the business operates two sawmills and three pallet plants, producing between 1.7 million and 2.5 million pallets annually. It employs approximately 140 people companywide.
“We came from forestry, and we continue to be landowners,” explained Paulo Verdasca, the third-generation administrator of Madeca. “The pallet business is a complement to that. It allows us to create more value from the wood instead of selling it only as raw material.”
This vertical integration remains a defining feature. Approximately 80% of the company’s lumber production is consumed internally for pallet production. The remainder is sold into construction and other markets. In Portugal, where most forestland is privately owned, this model provides a degree of supply control that is attractive to customers. This approach helps limit exposure to lumber market volatility.
A Fire at the Peak of the Market
The 2021 fire struck at what Verdasca described as the “worst moment.” Pallet demand was exceptionally strong and lead times for new equipment were extended. He jokingly referred to that moment in history as “the golden age of pallets.”
“The fire was really a disaster for us,” he acknowledged. “The market was growing very fast, and it was impossible to get new machinery in any reasonable time.” The company responded by immediately shifting affected personnel across its remaining facilities and running extended shifts to maintain supply.
“We moved our people to the other pallet mills and kept running them day and night,” Verdasca recalled. “The objective was very clear. We could not lose the market. We had to continue supplying our customers.”
That decision maintained continuity. It also forced a different approach to rebuilding. Rather than replacing its pallet nailing lines entirely, Madeca worked with AVM in the Netherlands, a company that supports and rebuilds legacy Vanderloo equipment, to restore and upgrade its systems. The result was a comprehensive rebuild that combined existing mechanical platforms with updated components and controls.
“We worked with the original knowledge base of the machines, and we upgraded what made sense,” Verdasca explained. “Electrical systems were new, key components were replaced, and the lines were brought to a very high level of performance.”
He emphasized that the outcome was not a compromise. “At the end of the day, we achieved a very good result,” he said. “We are very satisfied with the output, and we did it with a fraction of the cost of buying completely new lines.”
Some of those lines have been in operation for decades, including the oldest, which has historical significance. Shipped from the United Kingdom several years ago, it had been used by GKN CHEP to nail the very first CHEP pallets in the UK over 40 years ago.
“Even the manufacturers themselves say the same thing when they come to our plants,” Verdasca noted. “They say the machines look like new. That comes from how we maintain them.”
While high-volume production is anchored by the Vanderloo nailing lines, Madeca has also built flexibility into its operation. A Corali machine is used for shorter production runs and frequent changeovers, allowing the company to handle more customized or lower-volume orders without disrupting high-volume runs on the other lines.
“We use that machine for smaller runs where we need to change setups several times a day,” Verdasca said. The company also uses Cape chamfering machines.
Managing Volatility Through Flexibility
Madeca focuses on block pallets, as is typical in Europe. It uses both solid timber blocks as well as presswood blocks when specified for products such as EPAL pallets. Production can vary significantly from year to year, ranging from approximately 1.7 million to 2.5 million pallets. This variability is driven in large part by agricultural demand, which plays a major role in the Portuguese market. “There are years where we are at the higher end, and others where it is lower,” Verdasca admitted. “It depends a lot on crops and market conditions.”
Rather than viewing that variability as a problem, the company has built this mindset into its operating model. “We adjust shifts and resources depending on demand,” he explained. During the 2021 surge, that flexibility extended beyond Portugal. “We were shipping pallets to many countries at that time,” Verdasca recalled. “It was a very unusual situation, but it showed how important it is to respond quickly.”
The ability to pivot was rooted in Madeca’s plant maintenance expertise. The company takes significant pride in its approach. “We invest a lot in training, but we also invest in good practices,” Verdasca noted. “Some of the most important things you learn by working with the machines and understanding how they behave over time.”
One example is the company’s focus on upgrading electric motors. “Electric motors today are very different from what we had 20 years ago,” he explained. “The difference in energy consumption can be more than 30%. In some cases, you recover that investment very quickly.”
Supplier and part standardization also play a key role in its approach. By working with a limited number of suppliers for key components, Madeca simplifies maintenance and improves reliability.
A European Market in Transition, Doing More with Less
Verdasca also pointed to broader market conditions shaping the industry. In Europe, Germany continues to play a central role as the region’s economic engine. “When Germany slows down, everything slows down,” he commented.
The transition to electric vehicles and broader industrial adjustments have contributed to a slower recovery in German manufacturing. These trends in turn affect pallet demand across the continent. At the same time, current geopolitical factors and energy spikes continue to impact market stability.
“These economic factors affect everyone,” Verdasca said. “When you touch energy, you touch everything.”
Beyond operations, Verdasca has been actively involved in European pallet industry organizations, including FEFPEB and EPAL. As an association executive member for both organizations, he has contributed to discussions around standardization and international cooperation.
This leadership experience shapes how he views the industry’s future. He is mindful of the importance of wood as a carbon sink and lightening the company’s environmental footprint. Madeca is achieving these goals by reducing the energy consumption of existing equipment. “We need to think globally,” he said. “The world is a small village, and we need to work together.”
He pointed to past efforts, such as ISPM-15 and current initiatives like the Packaging and Packaging Waste Regulations (PPWR), as examples of how international collaboration has helped establish common frameworks. “Without this cooperation, it would be much more difficult for the industry to function,” he added.
Looking ahead, Verdasca sees the company’s path defined less by expansion and more by efficiency. “We need to do more with less,” he said. “That is the reality today. We have to use resources better and improve how we operate.”
Doing more with less and building things to last are recurring talking points for Verdasca and Madeca. “The most important thing is to provide a good service,” Verdasca concluded, adding that his company has strived to provide just that for over 120 years. “If you are reliable and you deliver what you promise, you have already done most of the work.”
