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S.C. Company Cuts Back Here, Grows There: Palmetto Forest Products Closes Reman Plant, Expands into Chipping for Fuel Wood
Palmetto Forest Products – South Carolina Company Adds Morbark Chippers for New Venture
By Peter Hildebrandt
Date Posted: 4/1/2009
MONCKS CORNERS, South Carolina – The recession has companies and the people working for them wondering what their next move might be.
Palmetto Forest Products acted quickly when the housing market collapsed in the past year or so. It closed its lumber remanufacturing business for now and has found a new, growing niche: chipping wood and supplying it to paper mills and energy plants. The new enterprise is doing work in Georgia and South Carolina.
One of its customers is Council Energy, which makes steam for a chemical company in Orangeburg, S.C.
Another customer is the University of South Carolina, which recently opened a new biomass gasification plant, the only one of its kind in the country. The USC biomass gasification plant heats wood fiber to create syngas, a mixture of carbon monoxide and hydrogen that is used for fuel to make electricity and steam.
“Our relationship with the USC biomass plant is going great,” said Chris Riley, 34, owner of Palmetto Forest Products. His business is based in the Lowcountry of South Carolina.
“Typically, as in a recent job at nearby Eastover, we do clear-cutting, thinning and understory clearing work in addition to fuel wood chipping – all right on-site,” said Chris.
Palmetto Forest Products was ranked the seventh-fastest growing business in the state in 2005, according to Chris. “All that changed, and we were cut in half when we shut down the lumber side of our business in 2007.”
In its lumber remanufacturing operations, the company produced products for the home building industry – components to make roof and floor trusses; the components were sold to other companies that assembled them into trusses. One of its machines cost $1 million. The company used it for six months before the housing industry collapse forced them to close. The machine is in a warehouse as the company waits for the housing market to revive.
“We were a $15 million company,” said Chris. “Now we’re a $5 million company. This wasn’t all bad, though we did lose all that revenue. As a result, our operation became more simplified. We stayed true to the forest business, refocusing what we were doing to be able to survive in these tough times.”
Palmetto Forest Products does not perform round wood logging operations. Besides some clear-cutting, thinning and understory clearing, it goes onto jobs after other loggers in order to grind the slash and debris left behind. “We’re trying to make it so we utilize all the wood fiber,” said Chris.
His father, Clyde, worked 32 years in the lumber business and is now retired. When Chris graduated from high school, he started in lumber sales for his father, who owned a lumber remanufacturing business. Chris started his own company in 2002 and added forestry operations for timber harvesting and grinding in 2005. His brother, Phillip, is operations manager and field superintendent, supervising operations outside of the Columbia area.
Chris’s wife, Bobbie, gave up a career in dental hygiene to help him; she does the bookkeeping and other office work for Palmetto Forest Products.
“I’ll be honest: the business is a challenge,” said Chris. “There are good days and bad days. But she has stood behind me on all of my decisions, whether good or bad, and we’ve been married for 15 years.” The couple has three sons: Chase 10, Davis, 5, and Tucker, 1.
Ken Goodwin with Capstone, which owns the former Meade-Westvaco paper mill in Charleston, convinced Chris to go into the chipping business.
“Ken approached us about buying a chipper to produce fuel wood chips instead of tub-ground material because of the sand content in tub-ground material versus chipping,” said Chris.
“Ken explained to me that chipping cost a third of what a grinder does, burns half the fuel, and that he would pay me $5 more per ton. I said, ‘Here’s the phone. Tell them what I need.’ It was a no-brainer.” The company is equipped with a Morbark 4036 chipper and a Morbark 6600 wood hog horizontal grinder, which is mounted on tracks.
Palmetto Forest Products has 35 employees, 14 of whom are truck drivers. Besides the two chippers, the company also has three grinders, including two on tracks. Felling is done with three John Deere 843J feller-bunchers. Other equipment includes two John Deere 648H skidders and a John Deere loader.
The company has 14 semi-tractors and 25 trailers. “When you’re doing wood chipping, the product you produce has to be hauled to the mill,” noted Chris. “If the trucks are hung up at the mill, there is no production in the woods.”
The three grinding crews process slash and other debris from logging jobs and Palmetto’s own land-clearing operations or other timber-harvesting jobs. The grindings are sold mainly for boiler fuel or mulch.
Weather has been very challenging this winter. “This has been one of the worst winters we have ever seen,” Chris explained, because of heavy rain.
“The whole Midlands region of the state where we’re working on has soil which is clay-filled,” he added. “A tenth of an inch of rain can shut a job down due to the fact that it can be difficult to reach people’s wood, and you are slipping and sliding on the way out.”
A track-mounted grinder is a good machine for working in those conditions, Chris noted, but it doesn’t make any difference if you cannot get your trucks in and out of the woods to haul the grindings.
The USC biomass plant has proven to be a valuable new market for the company. In fact, the plant is willing to buy more fuel chips if Palmetto Forest Products can supply them.
“We were so glad we found this new source for our product,” said Chris. “Ken Sheppard at American Forest Management was instrumental in having all this come about for us and USC. They manage people’s land, while USC likes our product. Ken knows he has to keep wood flowing to us in order to keep fuel flowing to the university. This took Ken four years to get up and running, and it’s all working out quite well for all involved so far.”
American Forest Management provides forest management consulting and other services. It manages over 4 million acres for institutional investors and private non-industrial landowner clients.
“We manage land for numerous clients, and what we’re utilizing Palmetto Forest Products to do is work on some salvage stands not currently producing,” said Ken. “At the USC biomass plant we worked with Johnson Controls to determine if they could handle the unloading of the wood materials, utilize them in their mix, and what percentage of the material they could use at their facility.”
Ken described the work of Palmetto Forest Products as cleaning up forests and doing pre-commercial thinning.
“But the recent work Palmetto Forest Products did in Eastover is a bit out of the norm from what we usually do,” added Ken. “Such work also ends up helping a property to ‘show’ much better as we are getting things ready for a sale.”
An important service offered by American Forest Products, he added, is finding markets for wood products coming out of a forest. “As energy needs in the area shift to more fuel processing sites, such as the USC biomass plant, that service should become even more crucial,” he said.
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