Some people just don’t like to sit still. Wade Kohler and his wife, Susan Kohler, own Pioneer Packaging, and they are some of these people. The Kohlers are always looking for new ways to expand or better service customers.
Headquartered in Portland, Indiana, Pioneer Packaging started out in 2002 as a side-project for Kohler and his wife, who both previously worked for large companies in management. Today, their pallet company serves customers all over the region with pallets, lumber, animal bedding, trailer rentals, warehousing services and much more.
“I am always looking for ways to serve the customer better and create a relationship where they will not want to leave to another supplier over a dime a pallet,” said Wade Kohler, CEO of Pioneering Packaging. “If you offer lots of services to customers, they tend to stay pretty loyal and won’t beat you up on pallet prices.”
One area where Pioneer Packaging has been very successful is its animal bedding business, which does about $1 million a year in bedding sales. Using a Rotochopper EC-366 two-stage fine grinding system, the company turns pallets and other forms of wood waste into about 120,000-150,000 lbs. of animal bedding per day. Kohler said, “Animal bedding is all about location, and we are located in the middle of dairy, beef and poultry producers. We are very busy keeping up with the demand for our livestock bedding products.”
Turning Waste into a Useful Product
Pioneer Packaging started its grinding operation about two years ago, and it has been a good decision. “Grinding allows us to turn waste from our operation, customers and even competitors into a usable product,” commented Kohler.
Kohler added, “Our focus was to make a better product at a lower cost by improving the consistency of the bedding, making it lighter and smaller, and removing more contaminants, etc.”
Instead of just using a tub grinder, the Rotochopper EC-366 uses a two-stage process that includes a hammermill to create smaller bedding particles. Animal bedding is a growing market, and farmers are increasingly looking for alternative bedding sources, while pallet professionals are seeking new wood fiber markets beyond the standard boiler fuel and mulch markets. Although pallet recyclers have been producing animal bedding for years, Pioneer Packaging is slightly unique in that it serves cattle markets as well as poultry markets. The market for poultry bedding from pallet waste is not as well established as the markets for dairy and beef bedding. Poultry producers have been typically hesitant to move away from traditional bedding sources and adopt bedding made by grinders, but this is slowly shifting, especially for companies, such as Pioneer Packaging, which largely serves poultry producers.
Kohler explained, “Poultry markets prefer lighter, fluffier bedding materials, and the Rotochopper two-stage system can produce this type of bedding efficiently…We grind it down to the size of wheat or oats in size.”
The Rotochopper system at Pioneer Packaging starts with a primary grinder that breaks down wood to about the size of mulch. During that process most of the nails or screws are broken loose and the mulch-sized material passes under a cross-belt magnet that removes all the metal. Kohler stated, “The amazing thing to me is that nails come out of this grinder fully intact.”
The material continues up a long covered belt about 20 ft. and is then dropped about 20 ft. into a collection shoot that feeds into the hammermill, which has about a 3/8 inch diameter screen to produce the smaller sized material.
Kohler said, “Rotochopper has these two units synced so that each one knows what the other is doing. If the hammermill is starting to draw more amps, the system tells the primary grinder to slow up just a bit.”
Out of the bottom of the hammermill, there is a big tubular opening. Finished material is air conveyed using a vacuum that sucks it out into a cyclone. It comes out of the cyclone onto a covered conveyor that feeds into a large material storage building. A horizontal augur drags material off the pile into a dispenser that fills trailers. The grinding operation runs every day, which means Pioneer Packaging must have enough space to store its production.
Kohler said, “There are times when I will have 12-15 trailer loads of bedding in storage because I am producing the material every day. Some days, I only have one or two depending on the time of year and demand. Our busy season is fall and winter months.”
Pioneer Packaging uses 2-3 operators to run its grinding operation. Besides routine maintenance, such as cleaning up around the machine and greasing bearings, the grinder has worked flawlessly. Kohler commented, “Our Rotochopper grinding system has helped us be competitive because it is dependable and just keeps running even after two years of almost constant use.”
Rotochopper has provided strong support after the sale including answering questions and offering best practice tips on everything from operation to material handling strategies.
Inside Pioneer’s Pallet Operations
The pallet part of Pioneer’s business is made up of almost three equal segments of new pine pallets, new hardwood pallets and recycled pallets. It produces a lot of combo pallets and pallets made completely from recycled lumber. Much of its lumber comes from cut stock or recycled lumber. The company doesn’t operate its own cant sawing system because Kohler has found he can buy material on the open market cheaper than he can produce it himself.
Pioneer Packing runs two shifts and tears down about 3,000 pallets per day for the recycled lumber. Pioneer Packaging has a total of twelve pallet dismantling machines. Incoming cores are presorted and then moved via forklift to eight repair stations. Employees use one-man Smart Products or Pallet Hawg dismantlers. All repairs are done right at the dismantling stations. Some recycled components are trimmed using seven Smart Products or Pallet Hawg trim saws and hand stacked for later use by nailing stations.
Last fall Pioneer Packaging bought an existing pallet plant in Summitville, Indiana and has turned that facility into a 48×40 repair operation. This new Summitville location is located very close to many of its existing customer base. It uses two Smart Products and two Pallet Hawg dismantlers.
“Unlike many other operations, we reuse 100% of what we break down. If we can’t use the material in a remanufactured pallet, we can grind the waste for livestock bedding. We will cut a damaged stringer to 24 inches and truss plate it to form usable 48 inch stringers.” Although this requires additional labor, Kohler said that the plater is a good place to use workers who may not be up to the physical demands of other parts of the repair process. His company produces tens of thousands of plated runners each year.
The majority of its pallets are produced by workers by hand on its 20 build stations using custom-made jigs. Others are built on a Woodpecker nailing line from Mona Tracy of Universal Equipment Sales. This machine is used to produce new GMAs built with new lumber.
Customer Service Drives Growth
Pioneer Packaging has prioritized growth over other things. This has led their company to expand and worry about profits after the fact.
Kohler explained his business philosophy when he said, “It is important to get the job instead of trying to figure out first how to make money doing it. Many times if you have to figure out how to make money before doing something, you will talk yourself out of it and never do it. The opportunity may not look good enough on paper.”
This doesn’t mean the Kohlers operate at a loss. It just means that they focus on finding ways to do things better, and more efficiently after securing the business.
Given the real estate and trailer assets they own, the Kohlers leverage these to provide services that other pallet providers cannot offer. This includes leasing extra space to customers to store products that Pioneer Packaging will then provide a low-cost transportation service that ships goods from storage to the customer location. Also, the company rents out many 53 ft. trailers to customers. These are revenue producers as well as a way to become so connected to a customer’s supply chain that you become almost invaluable to them.
The Kohlers have found that warehousing and logistics is a key to maintaining customer loyalty and growing their business. Its fleet includes 190 trailers and nine trucks.
Pioneer Packaging also offers a wide variety of material types in its pallets including combo and remanufactured pallets. Kohler commented, “We do a lot of combo pallets because we generate so many deck boards and runners in our tear-down operation. We use these pallets to compete against companies that mainly offer new pallets. I try to go in and offer what other providers cannot do.”
Getting people to switch is not always easy. Kohler explained, “Sometimes I will give customers a trailer load of pallets for free to try something new and see how combos or remanufactured pallets work for them.”
Starting Small, Working Smart
While still working for large companies, Kohler and his wife, started Pioneer Packaging back in 2002. Susan Kohler is the chief financial officer of the company. They worked full-time for the other employers while running the pallet firm on nights and weekends until May of 2011. By that time, they had grown the company to about $4 million in sales.
The Kohlers credit their growth and success to the hard work and determination of their management staff and employees. Today, it does more than $11 million in sales when you consider its pallet, industrial lumber and livestock bedding businesses.
Pioneer Packaging supplies a lot of industrial lumber to customers that want to produce their own crates, pallets and packaging to ship specialized products. This includes both dimensional pine lumber and plywood sheeting. Pioneer Packaging also supports their customers by removing their wood waste that is used for recycled pallets or animal bedding.
One example of a unique way that Kohler grows the animal bedding business is his outreach to local farmers and livestock producers. The Kohlers used to own a custom embroidery and branding business. This connection and knowledge allows them to produce a lot of custom hats and nice polo shirts with their company’s brand on them. Kohler stated, “If you give a customer a nice hat, polo shirt or hoodie, he is going to wear that thing every week. We probably spend about $20,000 per year on custom-branded apparel and items to give to customers and suppliers.”
Kohler added that this form of marketing works better with his rural clientele than most other forms of advertising and promotion. It has helped the Kohlers grow their business quickly and create goodwill with clients.
Always looking for the next thing is a key for Pioneer Packaging’s success. Is it time that you re-examined the bedding business? See the sidebar for more information on Rotochopper’s line of grinders.
Rotochopper Offers a Wide Variety of Power Options for Grinding Machines
For over 20 years, Rotochopper grinders have been helping pallet companies turn pallet waste into commodities like animal bedding and landscape mulch. Rotochopper offers three categories of grinding equipment for the pallet industry: diesel horizontal grinders, electric horizontal grinders, and multi-stage grinding equipment.
Diesel powered Rotochopper grinders are available from 275 to 950 horsepower. The diesel line-up starts with the compact MP-2 at 275 to 350 horsepower, which comes standard with an on-board colorizer. Next is the most popular diesel Rotochopper for the pallet industry, the MC-266 with 475 to 540 horsepower. The newest addition to the line-up, the FP-66, is available with 540 to 630 horsepower. The largest Rotochopper diesel grinder, the B-66, ranges from 700 to 950 horsepower.
If a pallet recycler has access to 3-phase power, does not require mobility and has a fixed wood waste handling process, then an electric grinder will almost always offer a lower operating cost than a comparable diesel grinder. Even when a pallet recycler has to pay for the power company to upgrade the facility to 3-phase power, electric grinders still usually offer considerable savings over time. Besides the lower costs of electricity compared to diesel fuel, electric grinders can save on the costs associated with engine maintenance, including downtime. Rotochopper electric grinders are available from 150 to 750 horsepower.
Since the mid-1990s, the Rotochopper EC series has been a highly recognized name in electric grinders for the pallet industry. The EC-256 is available with 150 to 400 horsepower. The EC-366 has a wider feed opening that the EC-256, as well as upgraded standard features and additional options that are not available on the EC-256. The EC-366 is also available with 150 to 400 horsepower like the slightly smaller EC-256. The B-66 E is the largest electric Rotochopper grinder with 500 to 750 horsepower.
Rotochopper electric grinders are designed for stationary operation. By comparison, many heavy equipment manufacturers build their electric-powered equipment on the same platforms as their mobile diesel equipment. As a result, their electric-powered equipment features axles and other unnecessary components for highway transport. An undercarriage on a grinder makes cleanup under the machine more difficult. Rotochopper electric grinders are built standard with support legs instead of undercarriages. Full-length collection conveyors are also standard to further minimize mess below the machine. For companies that need to grind at multiple locations, optional trailer mounts are available.
A Rotochopper multi-stage grinder combines an electric grinder with a hammermill. A multi-stage system is designed to take whole pallets and other forms of wood waste down to fine texture products in a single pass. Fine texture products like animal bedding and short fiber fuels are becoming increasingly popular with pallet recycling companies. Pallet waste makes high quality animal bedding and fuel products because of its low moisture content.
A Rotochopper horizontal grinder alone is able to produce the right fiber size and texture specifications for many animal bedding applications. For companies that need to produce very fine animal bedding, however, a multi-stage grinding system offers better horsepower efficiency along with lower wear costs than a horizontal grinder alone. With more material produced at a lower cost, multi-stage grinders produce animal bedding and short fiber fuels at the lowest cost per ton.
For more information, visit www.rotochopper.com or call 320-548-3586.
