Mitch Martin looks for opportunities. That’s how Martin got into the pallet business in the first place. He purchased a small Minneapolis pallet company in 1998 that was going under due to a fire. “I bought several accounts and some old equipment,” he quipped. He started with five employees, operating in an old 12,000 square foot building.
Today, Northland Pallet has become a major recycler in Minnesota and was recently included on the Interpal pallet plant tour. One of the key areas where Northland is a trend setter is its approach to turning wood pallet waste into value-added products, such as pellets. A key to its approach is the company’s grinding operation, which depends on a Rotochopper EC-366.
Mitch Martin, owner and president of Northland Pallet, said, “We upgraded to the current machine in 2016. We had maxed out the previous machine and wanted to start grinding more whole pallets. We figured if we went down that road, we wanted a larger machine so we had more capacity.”
In addition to the grinder, Northland installed a Rotochopper hammermill as part of its plans to produce wood pellets. Martin has no problem getting rid of his waste. One reason is the quality of the grind. Martin explained, “Honestly, in this area, everybody that gets our product says it’s the best product they get from pallet companies. The combination of the Rotochopper grinder and hammermill produces a consistent grind that is popular for horse bedding and works well with our pellet operation.”
Northland runs a Vecoplan pellet system equipped with an automated bagging system and robotic palletizer. The entire pellet plant requires one operator. The robotic palletizer eliminates three workers that would be required to stack pellet bags if the process wasn’t automated.
Looking at the pellet operation, Martin believes the gamble is worth the investment although the benefit depends largely on the weather. He explained, “When we first got into it, it was tough to make money because the pellet market in the area was fairly saturated and we had some warm winters. Also, propane was selling at an all-time low. Since then, we have had some cold winters and pellet demand has risen.”
Martin added, “In terms of a financial payback, it probably was a good decision. If we have some more cold winters, it will be a great financial decision. From the standpoint of having more control over what we do with our wood residuals, the pellet operation was a fantastic decision.”
Previously, the company was dependent on a few large energy producers to get rid of its waste stream. These customers set the price and demand could swing significantly. This left Northland in a difficult spot with wood waste building up. Now, Northland has more waste options and better control over how much money it can make from these product lines.
Rotochopper Offers Top-Level Service and Reliability
Northland bought its first Rotochopper in 2005, a Rotochopper EC-166. The company was grinding lumber waste, scraps and some whole pallets. It moved to grinding larger pallets with the upgrade to the EC-366 model in 2016. Commenting on Rotochopper’s support, Martin said, “Rotochopper is great customer service-wise, and it certainly helps that they are located so close to us.”
The company opted for a Rotochopper hammermill because it works seamlessly with the grinder. Martin commented, “Coming out of our Rotochopper grinder, material goes directly through our hammermill. The hammermill and the grinders speak to one another. If there’s too much product in the hammermill, it’ll slow down the grinder. If it needs more product, it’ll ask for more.”
Depending on demand and supply, Northland can vary its product mix from animal bedding to pellets. A key advantage for Northland is its hammermill. This means that animal bedding coming from Northland is ready to go to the customer compared to normal pallet grind from other companies that must go through a secondary grinding process before shipping to customer locations.
Martin said, “We put in our hammermill because of the pellet operation. But it certainly has helped us secure large volume customers and higher prices for our animal bedding product.”
Another important step is employees monitoring what goes into the grinder and the hammermill for pellet production. Mark Wales, sales director for Northland Pallet, explained, “It’s extremely important that you’re making sure you get foreign objects out of material that goes into pellet production.” He added this extra step ensures better quality pellets for customers.
Money Making Requires Risk Taking
Mitch Martin and his team at Northland have certainly been willing to take on risks to seize a business opportunity. From the pellet operation to being the second test site in the country for Alliance Automation’s new robotic dismantler to working with PECO as a rental depot, Northland has been willing to try new things.
Martin mused, “Well, I guess maybe I’m risk averse. I guess I’m not real concerned with risk, because I think we have a good set of people that make good decisions, so in any of these decisions that we’ve made I feel like we do our homework. We definitely bounce ideas off of one another, and look at the whole picture.”
Some of these risks are part of holding off bigger risks, such as getting stuck with tons of wood waste or having space underutilized. Martin explained, “Bringing on PECO as a customer, we had a lot of extra space in our facility. We wanted to better utilize space and develop another revenue source.”
Looking at the decision to be a test site for the revolutionary robotic pallet dismantler, Martin admitted, “We decided to try this innovative approach because it adds safety and can reduce labor needed for dismantling pallets. We knew this would take some time to work out all the bugs. The technology is really remarkable. Alliance Automation is committed to fixing any issues and has stood behind the product.”
Martin added, “When the robot works, it works well. The current challenge is a significant amount of downtime… We hope to reach 100 plus pallets per hour when everything is going smoothly.”
Thinking about the future, Martin added, “The Alliance robotic dismantler is a game changer. I believe in the long run being at the front end of this technology will be good for us.”
It does take the bravery of entrepreneurs, such as Mitch Martin, to pioneer the way forward. Overall, Martin understands the importance of robotics and believes it will play a role in dealing with future labor shortfalls.
Some things just need a human touch, and that is where the personnel at Northland Pallet makes all the difference. “My people have led to our success. Mike Mills is my right-hand man who manages the office and handles everything that I give him. Alex Romero, the plant manager, has been with me since day one. He makes sure all the orders get processed correctly and are shipped out on time. You know, we really wouldn’t be where we are today without his commitment to Northland Pallet. Finally, Mark Wales is our director of sales and the face of Northland Pallet to customers and the pallet industry. He has helped drive our sales and achieve revenue growth.”
Diversified Strategy
Over the past few years, Northland has transitioned from being primarily a 48×40 operation to a wide variety of sizes and revenue channels. The goal is to diversify and to have a number of areas contributing to the bottom line. Martin lamented, “It has become difficult to make money in the 48×40 market with the high cost of core acquisitions.”
Today, Northland produces about 40% new pallets and combo pallets. The company relies on a Viking Champion to manufacture these pallets. Martin said, “We use the Champion every day to produce about 500 combo pallets, primarily #1s to supplement the repaired pallet production.” Northland also has a Viking Sentinel it uses on some loads.
Beyond machinery, Northland has kept up with technology when it comes to production tracking. It relies on the Palmate ERP system from Automated Machine Systems to handle production tracking and accounts. The company plans to use it to track inventory and allow greater coordination with drivers in the near future.
One of the newest pieces of machinery is an Industrial Resources Infinity sort system. It is being used to sort PECO pallets. The new sort system has reduced the number of employees handling that task from four to one.
Through its evolution, Northland has developed a strong relationship with key suppliers, and Rotochopper stands out as a prime partner for operational improvement and efficiency. Northland is content to get all of its equipment additions and plant upgrades running smoothly, but you never know what opportunities will present themselves in the future.
Talking about his strategy, Martin said, “We don’t make decisions based on a five-year plan or rigid preparation. I have great people, and we work every day to seize on opportunities, reduce costs and serve customer needs.”
