Courtesy Pallets Inc.
By Christine Graf
Pallets Inc. in Fort Edward, a third-generation family owned business, was recently acquired by Damabois, a Canadian company that operates nine factories in Quebec and the Maritime provinces of Eastern Canada.
A leader in the transformation of wood and wood derivatives, Damabois was founded in 1986. The company harvests its own timber to manufacture pallets and uses milling by-products such as shavings and sawdust to make eco-friendly, slow-burning energy logs.
Damabois’ first U.S. acquisition was Essex Box and Pallet (renamed D Pallet Shop) in Keeseville, N.Y. After acquiring Pallets Inc., the company consolidated its U.S. operations in Fort Edward.
According to Jean-Philippe Bertrand, director of operations for Damabois, the company is seeking to grow its business in the United States.
“On the north side of the border in the province in Quebec, we are a key player in the pallet manufacturing business. We reached a point where our market shares were maxed out, and we needed to go into a larger market. We chose the northeast of the United States,” he said.
Pallets Inc. was founded in 1942 by Arthur Binley, Jr. During the company’s 80 years in business, it has been operated by members of the Binley family. It was third-generation owner, Clint Binley, who made the decision to sell the company.
Binley will remain with the company during the transition, and Damabois has retained the company’s approximately 35 employees. They have also hired several additional administrative staff members.
“We wanted this company because of the people. We needed people that knew the business and knew the market in the US,” said Bertrand. “We acquired teachers.”
The employees at Pallets Inc. have an average of more than 13 years of experience. Their part-time mill manager has been with the company for more than 45 years.
“There’s a lot of knowledge here which is one of the reasons Damabois was really interest in us,” said Marvin Horowitz, controller at Pallets Inc.
Damabois took ownership of Pallets Inc. at the end of February, and Bertrand said he has been happy with how well the employees have handled the transition.
“They have been adjusting very well. It’s a different country, and there is a language barrier. We were expecting challenges, but so far, I’m waiting for the first one. It’s been very, very smooth.”
According to Horowitz, “The employees are very excited for the future. They are looking forward to the growth that we are trying to build on. It’s been a very exciting time for us. Damabois has been great to us.”
Since purchasing Pallets Inc., Damabois has already invested $1 million in a new pallet nailing machine. As the company expands its market share in the United States, Pallets Inc. is likely to grow.
“What we have done with our other businesses is that we bring the business up to maximum capacity with the first shift, and then we create other shifts,” said Bertrand. “Down the road, that could mean a new building or an addition. It could also mean additional equipment.”
In addition to manufacturing new pallets, Pallets Inc. also refurbishes used pallets. The majority of the company’s clients are in the papermaking, mining, farming, and pharmaceutical industries. Damabois hopes to expand its customer base, serving customers both large and small.
“Anybody that uses wood pallets is a potential client,” said Bertrand. “We don’t cherry pick. Big or small, we are here to help anybody.”
When asked if Damabois plans to make additional acquisitions in the United States, he said, “The market is so uncertain now. Business is a lot slower than during COVID. COVID created a boost of demand, and now we are 30 percent below last year. Further expansion is on hold, but it’s never out of the question. Right now, our plan is to grow Pallets Inc.”
According to Bertrand, the forest fires that are raging in Canada are expected to impact prices of pallets as well as other lumber products.
“The impact will be huge. It’s going to create a shortage of wood on the market which means that prices are going to go up. Prices will increase but not to the extent they did during COVID.”
At the present time, there are no fires burning in the areas where Damabois’ mills are located or where the company harvests its wood.
“For us, there will be an increase in cost because of the fires,” said Bertrand. “All of our equipment is stuck on the field and we cannot move it around. We can’t get access to those areas.”