Diversification has been a major reason for Franklin Pallet’s success, and the company has added another product line by turning its wood waste into a value-added product – bagged pellet fuel.
Kelly Gregory, the operator of Franklin Pallet located in Franklin, Kentucky, admitted, “Honestly, the main reason we decided to get into pellets is our partners who took our scrap started charging us a lot to take our scrap. But I now see this is a big investment for our future.”
A Vecoplan grinding and pellet plant were installed in January 2021. Gregory stated, “Our biggest goal for next year, I want to get the pellet operation running at 100%. I would like to eventually expand the operation to 3-4 tons per hour.”
Looking to the future, Gregory projected, “When we get the pellet production up and running right, I think it will be the most beneficial part of our business.” A major reason for his optimism is the low labor costs associated with the pellet mill. He explained, “Finding good help is really hard to do in this market. One big advantage of the Vecoplan grinding and pellet system is that it is highly automated and designed to be run by only one person.”
Why a Pellet Mill?
It all started with a pain point. For years, Franklin Pallet sent scrap material to a waste processor. But then the market changed, and the mulcher wanted to be paid to take the wood. Gregory said, “We have such a high volume of scrap coming in with good pallets, we need to do something with the waste.”
Gregory explained, “We didn’t have the room for a major mulch or bedding operation. We had enough to do a streamlined, automated pellet operation. Plus, there are a lot more customers for pellets than there are chicken farmers for bedding.”
Franklin Pallet bought in 2020 and had installed a Vecoplan pellet system. The process starts with a refurbished Vecoplan VAZ 1600 shredder for handling pallets, large wood pieces, etc. This material then goes to a hammermill to be ground up into a finer consistency. It then travels through a magnet to remove metal debris before ending up in a holding tank. The biomass goes through an auger into a mixer and then an extruder where the pellets are actually formed. A conveyor takes the material into a cooling tank where it sits until it reaches the right temperature. Formed pellets go through a shaker to remove dust and particles. Then it goes to another elevator into a holding tank. Once this tank gets full, a Hamer Fischbein bagging system automatically starts bagging pellets. Finished bags run down a conveyor to a Yaskawa robot for palletizing. About 50 bags of pellets fit on a typical skid. Franklin Pallet sells its bagged pellets to Easy Heat Pellets, a division owned by BDL Supply.
Gregory admitted, “We now realize that we should have bought a bigger grinder. We are still taking some wood scrap to the mulcher just to keep up.”
“The Vecoplan pellet system virtually runs itself. It only needs one operator,” commented Gregory. “The design of the Vecoplan grinder and pellet system are awesome.”
Getting everything working perfectly has been a challenge. Gregory said, “Our investment in Vecoplan equipment is intended to turn costs into profits. We aren’t there yet, but we are working to fully get the grasp of the system and all its capabilities.”
He further explained, “It’s been a process so far to learn how to deal with changing variables, especially moisture content, temperature and humidity. These factors can impact the pellet system performance.”
Diversification in Lean Labor Times Requires Automation
Franklin Pallet Inc. began in 1998 when David Carver started repairing and refurbishing pallets. David Carver is the father-in-law of Kelly Gregory, who now runs the day-to-day operations of the company. Gregory joined his father-in-law in the business in 2011. David’s son, J.D. Carver, helps manage some aspects of the operations as well.
The original building was a flour mill on one acre. The company has grown to about 35 employees working on five acres. Over the years, the company has added two new buildings.
A key aspect of the company is its diversification. Franklin Pallet produces both new and used pallets in addition to reclaiming cardboard. In addition, the company offers warehousing services. The pellet mill gives the company another way to make money while putting waste material to better use. Gregory said, “You have to diversify and change how you do things or else you won’t remain profitable for the long haul.”
He added, “The pallet business changes every day. And the rate of change we have seen over the last 6-7 months is unprecedented from the skyrocketing lumber and core prices to the labor crunch to strong demand.”
Franklin Pallet has worked to be nimble in this unprecedented time. But labor shortages are constraining growth. Gregory admitted, “We are growing, but we are starting to take a more scaled back approach to growth due to the difficulty of finding people to work.”
The company may transition more toward recycling in the near future and away from new pallet production. It serves customers in a 50-125 mile radius of its facility, producing on average 15 truckloads of pallets per day. About 85-90% of its business is recycled pallets, Franklin Pallet processes and sells more GMAs than anything else.
The flow in the plant is fairly simple and straightforward. Incoming loads are taken by forklifts to four sort stations where pallets are sorted into six areas. Forklift drivers take damaged pallets to repair tables to be fixed. The company actively uses a Smart Products dismantler and has a Pallet Hawg dismantler on order to increase production capacity. In its new pallet assembly area, the company produces some by hand and builds some pallets on a GAP nailer.
Success Factors for Franklin Pallet
Thinking about what stands out about his company, Gregory said, “We cater to our customers and service them with speedy delivery and consistent quality pallets. Our customers are loyal because we take good care of them.”
The business is family run and they strive to put forward a professional appearance. Frankin Pallet has its own truck fleet, three tractor trailers and four flatbeds. Gregory explained, “All of our trucks are clean, branded with our logo. We see our trucks as advertising that reflects the quality we put into our work.”
Keeping trucks staffed isn’t always easy in this market. Gregory suggested, “In spite of the driver shortage, we have been fortunate to foster a good name in the area to recruit drivers.”
The company is willing to take risks and make unconventional moves. This explains part of the thinking behind the pellet mill. Gregory explained, “There is no other pellet mill in our target region. It gives us another diversified way to make money and is a differentiator.”
Thanks to aggressive investing, the company has shattered its goal to pay off the system in 3.5 years. Within six months, they have paid off 50% of the system.
Currently, the Vecoplan pellet mill is producing on average a little over a ton per hour and has a capacity of 2 tons per hour with equipment set in place to expand to 3-4 tons per hour in the future. Gregory projected, “We are going to get this pellet mill ramped up to full production over this year. And I foresee it becoming an important part of our business, a way to diversify our profits.”
The 520 pellet mill is designed specifically for medium commercial scale pellet production. It can pelletize hardwood, softwood, wood scrap, virtually any type of biomass. The system has a small footprint and is easy to operate and maintain according to Vecoplan.
You don’t have to be a huge company to invest in pellet technology. Franklin Pallet is a good example of how you can turn waste into a better byproduct. For more information on Vecoplan and its grinding and pellet systems, visit www.vecoplanmidwest.com or call 812-923-4992.
