WAVERLY, Ohio – Location, location, location. It is considered a key factor in real estate.
For Milltree Lumber Holdings Inc., it’s an example of how to spot and act on a good business opportunity others might pass by.
The owners of Millwood Inc. (Lionel ‘Chip’ Trebilcock, Steve Miller, Lionel ‘Corky’ Trebilcock and Ron Ringness) Milltree’s parent company, were searching for acquisition or merger opportunities to expand Millwood’s reach into targeted markets. Ohio Valley Hardwoods Inc., a sawmill business, provided the answer to their quest.
Millwood’s owners realized this particular location in Southwest Ohio would bring strategic benefits in terms of efficient highway access, a solid customer base, and an established, experienced workforce.
“We envisioned the potential for opportunities,” said Joe Commodore, project manager of Milltree, the new name given the acquired business.
They were concerned about controlling the rising cost of raw material in a competitive market, noted Joe. “Milltree’s proximity to an excellent raw material supply will help us in this area,” he said.
Millwood has 19 pallet manufacturing or recycling facilities in nine states, from the East Coast to the Midwest. The establishment of Milltree will enable the parent company to vertically integrate its operations and control the quality of the lumber.
“The lumber produced will be used to manufacture new pallets and to replace damaged components needed in the process of repairing used pallets,” said Ron. “This will further support our sales initiatives and our growing customer’s needs.”
Millwood acquired this facility fully realizing that it would have to make significant investments in equipment to modernize the mill. “We chose this location due to its strategic supply of raw material,” said Joe.
New Brewer Machines
The Milltree team rolled up its sleeves and got to work planning which machines and which manufacturer they would choose to upgrade the mill. “We decided to work with Brewer,” said plant manager Rick Taylor. “We looked at downtime, set-up time and changeovers, and Brewer provided us with the equipment allowing us to manage these concerns at the highest level.”
Milltree considered several suppliers of sawmill and lumber remanufacturing equipment. “I spent about six months traveling throughout the country, visiting existing sawmills in an effort to identify the best set-up and equipment we would need to meet our goals,” said Joe. “Brewer met our needs.”
Installation of the Brewer machinery began in the summer of 2006. At the time Joe and others spoke to Pallet Enterprise, Milltree had been operating for just under a month with two of the three new pieces of Brewer-Golden Eagle equipment: a Model 2000 one-head splitter bandsaw and a Model BR9915 stretch gang saw. The third piece of equipment, a Model 2000 five-head bandsaw system, was recently installed and is up and running and doing a great job. The air jets and carbide guides provide accurate, dust-free boards.
Brewer custom designed its standard 9912 gang saw to meet Milltree’s applications for cant widths and other variables, Rick explained.
With the new Model BR9915, Milltree can cut either stringers or deck boards for pallet material. “We have that flexibility, depending on what our customers’ needs are, so we can give them the widths, thicknesses and the heights they need,” said Rick.
The new gang saw already has improved lumber quality, he said. “The five-head bandsaw increases our quality as well as our production flow,” he added, and now provides dust-free boards.
“Brewer, in addition, provided all of the material handling conveyors as well as the computer logic,” reported Joe.
The Milltree team expects production to at least double as a result of all three Brewer machines operating. “We had been averaging two truckloads a day prior to getting the Brewer equipment, and the number is expected to increase to four loads,” said Rick.
In addition to the new Brewer equipment, Milltree added a high-velocity dust extraction system from AirFlow Systems Inc. “Between AirFlow and Young & Bertke in Cincinnati, we now have a great dust evacuation system,” Rick said. “The equipment will improve safety and health conditions.”
“Removing the old equipment and getting the new machinery installed was a huge team effort,” Rick noted. “It was a well-orchestrated project with good team support. Chip took a hands-on approach throughout the project. When the first machine arrived from Brewer, we worked four 10-hour days that week to fulfill our obligation to the team members. The team worked tirelessly over the three day weekend to get back into production as quickly as possible – not just for production’s sake, but also to keep our customers’ needs met as well as making sure our employees continued to get their regular paycheck.”
Touring Milltree
Milltree is located on 17 acres, with 10 acres dedicated to log storage and inventory. With the installation of the new Brewer equipment, the company plans to expand production from one shift to three shifts. With three shifts running, Milltree expects to produce about 3,000 truckloads of pallet stock annually.
Incoming log trucks are weighed and then unloaded with a Prentice 180D loader. “We are currently buying gate wood from logging contractors,” said Joe. “We have about 15 solid suppliers delivering to us every week.” The company buys hardwoods, primarily 8-15 inches in diameter and 8-20 feet long. Most common species include red and white oak, chestnut, poplar, hickory, gum and sycamore.
Logs are sorted, stacked in rows and inventoried using scale tickets. “Our inventory is accurate to 1/100th of a ton per row. We rotate our rows on a first-in, first-out basis,” said Joe.
Logs are fed into the mill by a Komatsu log loader. Grade logs are removed as logs are placed on the infeed deck. “The operator will set aside the bigger logs,” said Joe. The grade logs are sold to other companies. Low-grade logs also are sorted out in order to be processed into firewood.
“Once the logs are put on the deck, the sawyer makes a determination for the best cut of that particular log so we can maximize our yield,” Rick said. “He will cut the log to the length needed to supply our internal process, either a 48-inch or 40-inch cut.” The bolts then are debarked with a FastLine Eliminator, which can process logs up to 60 inches long.
The bolts enter the building via conveyor and head to the Tipton scragg mill. The scragg mill has two horizontal band blades followed by a circular saw to make a three-sided cant. “The first set-up determines our width,” explained Rick. “This is where the operator optimizes the yield on the log. Then the cant continues down to an automated Tipton cant end-trim saw that cuts it to length. It reads the length of the cant coming in and automatically adjusts to cut the best length. For example, if it comes in as a 41-inch, the saw will make a 40-inch cut. This means we are minimizing our waste and maximizing our yield.”
At the scragg mill, slabs falling off either side of the log go onto a belt conveyor and are carried to a slab recovery system. The slabs are processed through an edger to size them to a width of 3-1/2 or 5-1/2 inches. The edged slabs then go through an end-trimmer to be cut to length.
“Here is another instance where we are maximizing our yield by allowing our operators to make decisions on the best cut from each piece of material.” said Rick.
The three-sided cants will be resawn on the new Brewer equipment. Large cants will be center-split on the new splitter, and smaller ones will bypass it. The cants will continue on to be resawn either on the gang saw or the bandsaw system.
“We might be running stringer material on our gang saw and deck boards on our bandsaw,” said Rick. “If there’s anything shorter than stringer length, the operator can advance the short piece to our bandsaw. This material will then be resawn for deck boards, which can be 48 inches down to 36 inches in length. The longer material will continue on the conveyor and into the new Brewer gang saw. We have the flexibility here to maximize our yield.”
Finished deck boards and stringers exit onto a belt and are sorted according to two categories. “We have a No. 1 or premium grading system and a No. 2 grading system, which is lumber with wane,” Rick said. “We have three men stationed at the end of the belt that stack, grade and continue the process.” Finished bundles of pallet stock are wrapped with steel bands and placed in inventory or loaded for shipment.
One hundred percent of Milltree’s residuals are marketed for paper and pulp mills, mulch for landscapers, litter for poultry farmers, and fuel for energy plants. For example, wood scraps are fed to a CM&E Norman Model 48-inch bottom discharge chipper to be processed into pulp and paper chips.
Parent Company
When Millwood acquired this facility, it kept the workforce intact. In fact, Millwood evaluated everyone’s position and gave all employees an across-the-board pay increase.
“Our management team had given our team members a new incentive and a new vision,” said Rick. “Our employee philosophy is a big part of who we are.”
Rick added, “The philosophy of this organization is to aid, assist and even upgrade each individual’s economic standard, so this is an outstanding company to work for.”
Rick Lombardo, director of human resources, explained that Millwood is a faith-based business with four major pillars: trust, integrity, discipleship and servitude. “Our people are as important to us as the products we produce and services we offer to our customers,” he said. Millwood employs two staff chaplains. “They serve our employees and their extended families, both personally and spiritually. This is a very important part of our spiritual philosophy.”
While some companies may pay lip service to ‘being a family,’ Millwood puts this philosophy into direct action. For example, employees receive full medical benefits, a 401K savings plan, vacations, and paid holidays. The company holds quarterly family events, such as picnics and barbeques, where managers wear the aprons and serve the employees and their families.
“We also have employee safety recognition, both individual and team-based, for which employees receive monetary rewards,” Rick Lombardo added.
Career development is offered to all employees. “We sit down with individuals to see where they are and where they would like to go in their lives. We also provide tuition reimbursement.”
The parent company sponsors a week-long summer day camp at a local YMCA for children of employees. The company also sponsors an annual mission trip to the Dominican Republic, where employees rebuild homes and work on infrastructure projects.
With this level of commitment by the executive team to company personnel, it’s clear that employee loyalty runs high at Milltree.
“One of the things we do really well is recognize a good business opportunity when we see it – whether that means an acquisition or the benefit of a strategic partnership,” Ron explained. “These opportunities will continue to help expand and grow our business. We are insightful when it comes to project management, and we have a highly qualified team of individuals that can go into a business, look it over, and make the necessary improvements quickly.”
Many times, acquisitions, mergers and partnerships go through a period of downtime as companies transition through a change in ownership. “But we’ve demonstrated we can merge businesses quickly so they become very effective,” Ron continued. “We’ve been very fortunate in being able to do this aggressively through team and ownership involvement.”
What’s on the horizon for Milltree? “We will continue expanding operations to sell not only cut-up material but generating other goods from our byproducts to better serve industry,” Ron explained. “With Milltree we are creating a model for our future expansion that will allow us to successfully grow our company. We view Milltree as a stepping stone.”
