A 50,000-ton-per-year pellet plant operating five days a week for 10 hours per day will produce 200 tons of wood pellets each day. While instances of bulk pellet delivery are on the rise, the overwhelming majority of pellets produced by manufacturers serving the domestic residential market are placed in 40-pound bags, stacked on pallets and covered to keep the sun and rain off them. At a 200-ton-per-day clip, pellet manufacturers have to efficiently fill more than 10,000 bags, stack them on 200 pallets comprised of 50 bags per pallet, wrap them and move them into a waiting storage area. Once a daunting task that introduced a very real bottleneck and operational challenge for pellet manufacturers, advances and investments in packaging automation have largely driven out the vast majority of human labor the task once required.
Ray McCleod, plant manager at Olympus Pellets in Shelton, Washington, worked his way through college in the early ‘90s bagging pellets and building pallets. “I went from what you’d probably call the dinosaur age to what it is now,” McCleod says. Starting his career in the pellet industry by packaging pellets at night, McCleod knows firsthand the physical toll that kind of work takes on a person. “I’d bag and stack a whole ton by hand, run around the pallet with a stretch wrapper, then jump on a forklift and take it outside,” he recalls. Still, the throughput McCleod and his fellow co-workers were able to achieve with that entirely manual packaging solution would not be able to keep pace with current production standards. “We had at times six people in the packaging department, seven if you count the forklift driver packaging the tons,” he says. “We were only getting 100 tons per day, maybe a bit more on a very good day.”
At that rate, manual packaging would cut current throughput by nearly 50 percent. Fortunately for McCleod and the industry, a robust and well-established packaging industry began to knock on pellet plants’ doors and one machine after another drove in vital operational efficiency.
While options abound for pellet producers, an automated packaging solution needs to accurately fill bags with 40 pounds of finished product, deliver them to a pallet-building robot that will construct a perfectly built pallet of 50 finished bags, and finally protect the entire pallet from the elements with shrink wrap or a plastic hood. All of this needs to happen without fail at nearly a 20-ton-per-hour clip.
Jeff Conrad, eastern regional sales manager for Hamer, works with pellet manufacturers on a weekly basis, and still finds operations that are not yet fully operational. “I go to facilities and see folks putting a bag up underneath a scale and triggering a switch that releases pellets into the bag. Then that person feeds that bag into a hot-air sealer. We have people who are doing that and then sending those bags to a pallet-building robot. If they aren’t doing that, then someone is hand building those pallets, and there are all sorts of those kinds of operations still out there,” Conrad says.
The challenge, Conrad points out, is finding consistent, quality labor. “Good workers are hard to come by,” he says. “People don’t want to work as hard today as they did generations before. Employers are having a hard time finding workers. The kind of worker they are finding won’t stay there very long, so they have to retrain people, and there is constant worry over a work-comp injury—someone twisting their back wrong.”
This manual approach can be expected to yield six to 10 bags per minute. “That’s with the supervisor watching,” Conrad says. An automated solution, like Hamer’s 2090 bagging machine, can be expected to form, fill and seal 15 to 20 bags per minute. “You set the machine to the pace you want and it will do that all day long,” he says. “It doesn’t take breaks. It doesn’t come in late.”
Conrad reports that upon seeing an automated form, fill and seal machine run, they almost always believe the machine will be far more expensive than it actually is. “The perceived value on these solutions is sky high,” he says. While producers could opt for automated bagging alone, they seldom do. A complete solution will include a hopper or a surge bin that receives finished pellets from the chiller; a scale that delivers exactly 40 pounds of pellets into the bagging machine; the form, fill and seal machine; a pallet-building robot; and finally a stretch wrapper or hooder.
An entire packaging solution can represent a half-million-dollar investment for producers. Conrad notes that producers continue to show strong interest in automated solutions because they enjoy a return on their investment so rapidly, usually between 30 to 36 months. As if to underscore the obvious value a packaging solution adds to pellet operations, Conrad adds, “We’re taking people who have never bagged a single bag of pellets before and selling them a fully automated system from day one.”
Keep It Simple
Jeremy Collins, a sales professional from Rethceif Packaging—another OEM serving pellet producers interested in packaging automation—stresses the importance of operational simplicity when considering an automation investment. “The value proposition that we have for producers in an automated system is simplicity,” he says. “We don’t have a lot of moving parts in a vertical form, fill and seal―fewer moving parts, less maintenance, more uptime.”
Collins identifies the pellet industry as a “targeted market,” but by no means does it represent the bulk of Rethceif’s annual business. “The vast majority of what we do is compression for the wood shavings industry,” reports Collins. That said, many of Rethceif’s wood shavings customers also produce pellets so the segment was a good fit for their business, and Collins notes that activity in the sector is on an uptick. “There is definitely an increase for us in capital upgrades and capital improvements for the wood pellet industry this year,” he says. “It has been soft in the last couple of years, but the last two winters being hard winters have increased their confidence in the market and they are making investments to increase their efficiencies.”
While producers are drawn to the immediate reduction in personnel introduced by automation, the financial benefit isn’t limited to labor savings. “The other savings customers see moving from a manual solution to an automated solution is film cost, the cost per bag,” Collins says. “It’s less expensive to buy single-wound sheeting and form the bag on the machine than it is to buy premade bags. Typically, what we hear from film suppliers is the savings is 10 percent when moving towards an automated system.” At roughly 20 cents per bag, producers producing and bagging 50,000 tons per year are likely spending nearly $500,000 on bag stock, so a 10-percent savings in that expense is significant.
While the throughput of a Rethceif 5010 is certainly impressive―bagging at rates of 20 bags per minute when operating with dual scales―Collins urges producers to maximize the efficiency gain by also deploying pallet-building robots. “Actually, manual bagging can be very fast, but finished bag handling is where the bottleneck comes into play,” he says.
A well-formed pallet of wood pellets includes 50, 40-pound bags of pellets, arranged neatly to create a uniform stack of bags that doesn’t lean or bulge. Rethceif deploys Kawaski pallet-building robots, and with their automated solutions, the robots are programmed to match the speeds of the automatic bagging line. A dual-scale bagging line will deliver 20 bags to the pallet-building robot per minute, allowing the robot to build a full pallet, 1 ton of pellets, in under three minutes. The biggest challenge for producers at that point is managing their inventory and storage capacity.
Once built, a pallet of bagged pellets must be protected from the elements as finished product is often stored outside for months at a time before being delivered to pellet retailers. In the industry’s early days, finished pallets were manually wrapped in multiple layers of stretch-wrap. Eventually, producers began to opt for automation in stretch wrapping. “We used to wrap everything by hand,” McCleod laughingly says. “We finally got a stretch wrapper. I was so proud of myself to push my boss to get that thing.”
Automated stretch wrappers can still be found across the industry, but the trend is to move towards a stretch-hood, pallet-wrapping solution—one of the fastest growing applications in the automatic-packaging space. “There’s a lot of customers who have this item on their wish list, “Conrad says. He adds that about a third of the systems he quotes now include a stretch hooder. A stretch hood is made from a continuous roll of material. The machine stretches the material over a finished pallet, releasing it to create a water-tight barrier that greatly contributes to the integrity of the pallet.
Wayne Cornella, plant manager at Lignetics of Idaho, recently supervised the installation of a hooder at their production facility in Sandpoint. “There was a lot of different reasons we moved to the hooder including stretch-film pricing and labor,” he says. “One of the big issues we had here is putting on the plastic covers that we had, and we’d actually have to go and tie the covers on to the pallet. That was pretty labor intensive.”
Before installing the hooder, workers at Lignetics would stretch wrap the pallet and then tie a final cover over the wrapped pallet. Invariably, some covers would be blown off by the wind and time would have to be spent re-covering pallets. “Once the hoods are stretched over the pallet, the wind can’t blow it off,” Cornella says. “With the covers, the wind would blow them off and then, of course, you’d get sun damage. There were just lots of reasons for us to switch to it.”
Olympus Pellets has also installed a stretch hooder. “My forklift driver rarely ever gets off his forklift now that we have the hooder,” McCleod says. “Once the ton comes out the door, he picks it up and puts it away. Before, our forklift drivers had to cover the ton, staple the cover onto the ton, put a piece of plywood on the top—if they were going to stack it—and then go take it out. Now, they just have to put a piece of plywood on it every once in a while.”
The durability and efficiency enhancements of a stretch hooder are immediately apparent, and producer inquiries are coming in at an increasing rate. This isn’t a surprise for Conrad. “Certainly, the pallets are going to be more water tight,” he says. “You are definitely going to get a water-tight situation. With wood pellets, you don’t want moisture, but it is a more expensive solution. Instead of $100,000 for a stretch wrapping solution, you might be looking at $220,000.”
Return on Investment
While automation can and does get deployed in an à la carte manner, a fully automated, end-to-end solution is more common. Depending upon the various options, including the decision to opt for a stretch hooder versus a stretch wrapping solution, producers can expect to see prices ranging from $450,000 to $500,000. A fully automated packaging line, however, has an immediate impact on plant staffing and labor expenses. “When I used to run a plant in Coeur d’Alene, we had 14 people working six days a week, and those 14 people did not include secretaries,” McCleod says. “Now, I’ve got 10 people working five days a week and those 10 include absolutely everyone.”
Additionally, McCleod points to the relatively light footprint his operation currently sits inside. “Our building is 200 feet long and we’ve got everything we need in this building except for the burner, the dryer and the hammer mills and stuff,” he says. “Everything we need to make the pellets is inside including the pellet mills, the cooler, the bagger, the robot and the hooder. It’s all right in front of us and you can see it running. You just stand there and watch it run.”