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New York State Environmental Investment Program (EIP)

Research Project Summary

South Bronx 2000 Local Development Corporation (LDC)

Background

The South Bronx 2000 LDC was a non-profitcommunity based development organization dedicatedto affordable housing, neighborhood economicdevelopment, community-based enterprise anddevelopment of environmental businesses. From May1994 to February 1998, Bronx 2000 operated a for-profit subsidiary called Big City Forest (BCF). BCFwas a vertically integrated reclaimed wood productsmanufacturing company. It reclaimed lumber fromused shipping pallets, packing crates and othercommercial and industrial scrap wood andmanufactured new pallets, furniture, flooring,architectural millwork and other solid wood products.

Project Description

The purpose of the project was to assess the potential toincrease sales in the company’s higher value addedmarkets for flooring, tables, stands, benches, andbookcases, and to develop an improved marketingstrategy to further penetrate these markets.

Findings and Conclusions

BCF developed a marketing strategy that focused onpromoting specific products in several distinct markets:office furniture and furnishings, flooring and buildingproducts for government agencies and the military;furniture, furnishings flooring and building products forarchitects and designers; and home furniture andfurnishings for specialty furniture retail outlets. To

reach the government and military market, BCFsecured a manufacturer’s representative group,Government Sales Associates, which focused onsales of recycled products to the public sector. BCFalso determined that it needed to develop a retailpromotions program in order to market its productsto specialty furniture stores and the retail flooringoutlets effectively. Implementation of Study Findings

With its promotional approach redefined, and itsproduct catalogue redesigned to serve all marketsand represent all product lines at a low cost, BCFintended to hire a sales manager to implement thestrategy. They also secured a domain name on theweb (www.bigcityforest.com) and began toconstruct a web page.

Future Implications

In January 1998, the Board of Directors of Bronx2000 decided to cease operations and liquidate theassets of the organization and its subsidiarycompanies. Bronx 2000 and its subsidiaries hadaccumulated liabilities in excess of its assets. Thisoccurred in part because BCF was undercapitalizedfrom the outset and was forced to rely on Bronx2000 for operating support. In addition, althoughsales were increasing steadily, BCF was unable toaccess the expansion financing it needed to increaseproduction and meet sales targets within areasonable time frame.

Contractor: Bronx 2000 LDC Address no longer valid

Investment:

County: Bronx NYS EIP: $28,051Contract ProjectManager: Not Available

Contractor Match:$10,708

Phone: Not Available Total: $38,759EIP Manager: Linda Jacobs Completion Date: June 1997Phone: 518.292.5340

http://www.bigcityforest.com/



Adirondack North Country Association (ANCA)

Background

ANCA’s mission is to promote economic growth inthe northern region of NYS. While implementing atechnical assistance program to help area companiesreduce waste and cut operating costs, ANCA foundthat many businesses generate wood pallet waste.

Project Description

The purpose of this project was to assess thefeasibility of creating a regional staging area andrelated wood pallet rebuild and exchange business.In Phase I, businesses in Clinton, Essex, Franklinand St. Lawrence counties would be surveyed todetermine the amount of pallet waste generated, andthe costs for disposal or recycling. If a critical massof pallets were identified, Phase II would begin. InPhase II, the financial, technical and marketinformation needed to prepare a business plan for aviable Pallet Exchange/Rehab/Reuse facilitycentrally located in the region would be compiled.Project findings would also include potential buyersof rebuilt pallets, sources for financing such abusiness, suggested locations, and strategies formarketing the concept to prospective developers.


Of 534 companies identified as pallet wastegenerators, 125, representing several industries, weresurveyed to obtain an average profile of waste palletgeneration, management practices and costs. Thesupply of used pallets in the region was estimated to

be about 190,000/year (3,800 tons@40lbs/pallet). Five cities within the four-countyregion generated 70% of the pallets. However,given the difference in transportation costs forpallets coming from cities in St. Lawrence Co., itwas determined that a pallet reuse business thereshould only serve clients in that county. Ageneric business plan, Wood Pallet ExchangeBusiness Opportunity, was prepared, based on astaging area in or near Plattsburgh.

Implementation of Study Findings

In conducting the analysis, ANCA was able toidentify several potential investors and alsoworked closely with developers at the PlattsburghAirforce Redevelopment Corporation (PARC) tofind possible investors interested in setting up apallet reuse business at the old airforce base.

Future Implications

Since completion of the research, at least threewood pallet reuse businesses have begunoperations. A pick-up, repair and re-deliveryservice was started in Plattsburgh. A rebuildbusiness was set up in Rensselaer Falls that hassince expanded to making new pallets. And, aretiree has applied for assistance to create arebuild operation in the region. The genericbusiness plan prepared for this project was usedfor planning each of these businesses.

Contractor: Adirondack North Country Assoc.183 BroadwaySaranac Lake, NY 12983-1328

Investment:

County: Essex/Franklin Counties NYS EIP: $18,497Contract ProjectManager: Terry deFranco Martino

ContractorMatch: $6,138

Phone: 518.891.6200 Total: $24,635EIP Manager: Brenda Grober Completion Date: July 1997Phone: 518.292.5340


Capital Project Summary

Chemung County IDA

Company Background

Pallet Corp of America (PCA) was established in1992 as a manufacturing and wood waste recyclingfacility to divert clean wood waste from the landfillsin the following counties (Broome, Chemung,Chenango, Cortland, Delaware, Steuben, Tioga,Tompkins). PCA converts the waste into pallets,skids and shipping containers; converts the residueof those operations into materials for boiler fuel,mulch, and feedstock for medium density fiberboard

Project Description

PCA replaced its old outdoor diesel tub grinder withan indoor electrically powered system consisting ofa grinder, ferrous purging unit, and transportconveyors. In addition, new pallet disassemblyequipment was installed to recover usable pallets. Inturn a portion of PCA's output would be sold to

Norbord Industries, a medium density fiberboardmanufacturer seeking to convert from virgin torecycled feedstock.

Project Results

The new equipment was successfully installedand led to the delivery of 166 tons per month offeedstock material to Norbord (2000 tons/year).

Benefits

The project assisted in the modernization of theoperations of PCA, acting to increaseefficiencies. Increased output was then divertedto a manufacturer that switched to recycledfeedstock in the production of medium densityfiberboard

Contractor: Chemung County IDAP.O. Box 251Elmira, NY 14902

Investment:

County: Chemung NYS EIP: $48,500Contract ProjectManager: George E. Miner


Phone: 607.733.4635 Total: $142,297EIP Manager: Tom Kacandes Completion Date: Dec 1996Phone: 518.292.5340

4

New York State (EIP) Environmental Investment Program


Long Island City Business Development Corporation’s WoodWi$e New York Project

Company Background

Since 1993, the Long Island City BusinessDevelopment Corporation’s (LICBDC) IndustrialWaste Recycling and Prevention Program(INWRAP) has helped local businesses improvetheir waste management practices and minimizetheir costs. Wood waste has always been one of themost problematic materials for INWRAP. Limitedstorage space, contamination by paints, stains, andglues, and limited markets have conspired to forcemost businesses to discard their wood scrap, ratherthan reuse or recycle it. This project, known asWoodWi$e New York, was created to documentthese problems, and explore strategies to overcomethem.

Project Description

There were three primary elements to theWoodWi$e New York project:• An analysis of the supply of waste wood that is

currently available in New York City• An analysis of existing markets for waste wood

in the New York area• An analysis of potential opportunities for new

business development promoting the reuseand/or recycling of available wood scrap in NewYork City.


Based on the project survey, INWRAP estimatesthat there are more than 200,000 tons of woodscrap and sawdust generated in New York Cityeach year, the vast majority of which is currentlydiscarded. Current markets for this material arerather limited, primarily because of issues relatedto contamination, the long distance to market, andthe relatively low value of the productsmanufactured by current waste wood users.

Considerable opportunity exists to establish newventures, but businesses interested in pursuingthese ventures must find their way around theobstacles that hinder most manufacturing businessdevelopment in New York City – high wages, highrents, and poor transportation links in and out ofthe city.

Future Implications

INWRAP has identified a number of reuse andrecycling ventures that appear viable in New YorkCity, and intends to use a follow-up grant from theU.S. EPA to continue to research and promote theirimplementation. Many of these involve existingbusinesses that have expressed an interest inaccessing the large available waste wood supply inNew York City.

.

Contractor: INWRAP29-10 Thomson Ave,Long Island City, NY 11101

Investment:

County: Queens NYS EIP Investment: $51,280Contract ProjectManager: John Okun

Contractor Match: $19,337

Phone: 718.786.5300, ext. 24 Total: $70,617EIP Manager: Linda Jacobs Completion Date: Apr 2000Phone: 518.292.5340



Industry Labor Education Council of the Mohawk Valley, Inc. (On behalf of JoRose Clean Wood Waste Recycling)

Company Background

JoRose Clean Wood Waste Recycling is a family runcompany established to provide an alternative tolandfills for green waste wood, wooden constructiondebris, wooden packaging material and woodenpallets. JoRose had two major products, green wasteground into landscape mulch, and dry wood chipssold for fuel. In order to expand, JoRose needed toincrease its capital equipment base.

Project Description

Capital support was provided to help financemachinery and equipment that would allow JoRoseto supply dry hardwood chips to Norbord, amedium-density fiberboard manufacturer, to expandmulch production, and to sell rebuilt wooden palletsto its existing pallet disposal customers and obtainnew customers. The new machinery would alsoreduce operating expenses and improve profitability.

The targets for the project where to increase palletprocessing from 4,000 to 8,000/yr and increaserecycling from 10 to 25 tons/month.

Project Results

The targets were not achieved and companyproduction fell below the baseline numbers. Tworeasons were cited. First, the company was in start-

up mode and had limited funds for expansion.Second, the business relocated, strainingresources further. JoRose was unable to purchasethe grinding equipment upon which achievementof the targets depended. The firm’s relocationreduced business volume below the baseline.

A new outlet for the wood chips was found andcreated a symbiotic relationship with two otherbusinesses, Syracuse Fiber and Earth Alliance,both recyclers of paper mill residuals. Anarrangement was established where JoRoseprovided wood chips to these companies and inreturn received animal bedding for sale to areafarmers. A new site was identified that wouldallow all dry wood to remain dry and free of dirt.

Benefits

The project allowed a small company to proceedbeyond start-up phase and become profitable.JoRose shifted part of its business focus awayfrom an uneconomic business segment,(processing wood chips for fuel), maintained theproduction capabilities of another segment,(pallet re-manufacturing and recycling), anddeveloped a new segment, (animal bedding). Therelationship that developed between JoRose andthe other companies in NY expanded the marketand revenues for all three entities.

Contractor: Industry Labor Council of the MohawkValley, Inc.207 Genesee Street, Suite 405Utica, NY 13504

Investment:

County: Herkimer NYS EIP: $62,000Contract ProjectManager: Paul MacEnroe


Phone: 315.793.8050 Total: $125,255EIP Manager: Tom Kacandes Completion Date: June 1999Phone: 518.292.5340



Herkimer County Industrial Development Agency(on behalf of North Hudson Woodcraft Corporation)

Company Background

North Hudson Woodcraft in Dolgeville, NYproduces hardwood dimension and piano parts fromrough lumber. Previously, only 55% of the lumberentering production became finished product. NorthHudson’s production facility was nearly 100 yearsold, in need of repair and too small to handleproduction levels efficiently. With a 55% yield andannual production levels of about 1.65 million boardfeet, the company needed to purchase about 3million bd. ft. of rough lumber each year.

Project Description

The purpose of this capital project was to replace thecompany’s “cut-first” lumber processing operationwith a “rip-first” system. When lumber is ripped, itis cut down the length, with the grain. Rippinglumber first allows defects in the wood to beefficiently isolated and removed, and results in ahigher yield of defect-free, long length product(longer length product is more valuable than shorterlength). A complete rough-mill package wasinstalled, including an electronic board scanner toautomatically detect defects in the lumber, and anoptimizing cut-off line that cuts the lumber to themost desirable length after it is ripped. Thecompany’s facility was too small to house thesystem so a new building was constructed. At thetime the project began, most of North Hudson’s

competition was already using the rip-firsttechnology.

Project Results

North Hudson Woodcraft operated the newproduction equipment at 90-95% capacity andrealized an average yield of about 63%. Theincrease in yield from 55% to 63% allowed thecompany to reduce purchases of rough lumber byabout 456,000 bd. ft., or 752 tons, per year. Thetarget had been to increase yield to 61%, reducerough lumber purchases by 500 tons per year andsave about $500,000 annually. Because the actualyield (63%) was larger than the projected yield(61%) the company was able to net even greaterthan projected reductions in the tonnage oflumber purchased and avoided purchase costs.

With the rip-first system, the company is alsoable to purchase a lower quality mix of lumber toproduce the same quality end product. At thetime the project closed, the company waspurchasing a grade mix of 70% #1COM (#1common) and 30% FAS (prime lumber), pricedat approximately $2.00/bd. ft. Under the oldsystem, the company was purchasing a higherquality grade mix of 70% FAS and 30% #1COMwhich, in December, 2000 was priced atapproximately $2.50/bd. ft. This is saving thecompany an additional $228,000 per year.

Contractor: Herkimer County IDAPO Box 390Herkimer, New York 13350

Investment:

County: Herkimer NYS EIP: $ 300,000Contract ProjectManager: Domiano Contino

ContractorMatch: $1,074,029

Phone: 315.867.1373 Total: $1,374,029EIP Manager: Linda Jacobs Completion Date: Dec 2000Phone: 518.292.5340



Industry Labor Education Council of the Mohawk Valley (on behalf of School House Warehousing, Inc.)

Company Background

School House Warehousing operates a warehouse inGloversville NY for sorting and repairing woodenpallets for Cheps USA. Cheps is the largest palletleasing company in the US, leasing to largemanufacturers and retailers. School House is Cheps’largest pallet sorting and repair hub in the northeast.When repairing pallets, the company generated 60tons of wood waste/week (3,210 tons/year) that waschipped and sold for boiler fuel. The chippingequipment was operated at full capacity and SchoolHouse was having difficulty locating wood chipmarkets within a reasonable radius of its warehouse,limiting its ability to expand business with Cheps.

Project Description

School House installed a Rotochopper wood grinderand conveyors permitting wood chip production torise to 100 tons/week (5,200 tons/year) and toproduce high quality chips for sale to thelandscaping industry or as feedstock in themanufacture of medium density fiberboard (MDF).

Project Results

The company increased the amount of wood itrecycles by 2,080 tons/year. By the close of theproject, School House was producing and sellingwood chips at a rate that, if extrapolated, wouldexceed the target of 5,200 tons per year.

Benefits

The project removed a major bottleneck to thegrowth of the company’s pallet repair business.And, the higher quality product of the newgrinder permitted the company to pursue MDFand mulch markets that are both more lucrativeand consistent than the fuel market. The oldgrinder is still used solely to produce wood chipsthat are burned in an on-site boiler.

Lessons Learned

At the close of the project, School House had yetto produce chips for the landscape industry sincethe increased production of mulch in the regionforced a drop in prices. However, the companyhad formed a strong relationship with Norbord,an MDF manufacturer in Deposit, NY. Norbordfound School House’s chips to be of such highquality that it began purchasing all the chipsSchool House produced at a higher price thanthey would obtain as mulch. School House wasable to provide a high quality feedstock toNorbord because pallets are made from a limitednumber of hardwoods, increasing consistency ofthe product. School House stores all of its palletsindoors, improving its ability to control themoisture content of the wood. Finally, SchoolHouse worked with Norbord to design its processto produce chips that consistently meet thecustomer’s strict size and density specifications.

Contractor: ILEC 207 Genesee Street , Rm. 405Utica, NY 13501

Investment:

County: Herkimer NYS EIP: $105,500Contract ProjectManager: Paul MacEnroe


Phone: 315.793.8050 Total: $212,905EIP Manager: Linda Jacobs Completion Date: June 1999Phone 518.292.5340


Capital Project SummaryCity of Schenectady Industrial Development Agency (on behalf of Power Pallet)

Company Background

Power Pallet is a pallet repair and remanufacturingfacility in Schenectady, New York. The companytakes in used pallets, disassembles or repairs themand remanufactures new pallets from the parts. Thebusiness was incorporated in 1980 and services morethan 300 commercial clients throughout New York,Connecticut, Vermont and New Hampshire.

The company operated at full capacity for severalyears and was unable to keep up with demand. Itsdisassembly and reassembly lines, consisting ofmanual labor ,(assisted by power and hydraulictools), and fork trucks for moving pallets, were slowand created more waste than would be generated inan automated system. The company was alsoburning wood waste on site rather than capturing itsvalue by selling it as a fuel or ground product.

Project Description

The purpose of this capital project was to helpPower Pallet finance a $1.8 million expansion andmodernization plan. A second production line wasadded and the facility automated with the installationof PLC (programmable logic control) drivenconveyors and a series of automated pallet handlingequipment to stack, destack, turn, flip and cutpallets. The company also invested in a wood

chipper and dying equipment, giving it the abilityto process and sell wood chips for landscapingmulch.

Project Results

Production capacity increased from 2,140 to3,500 pallets/day, an increase of 1,360pallets/day, or 7,650 tons of wood/year. For thecompany’s suppliers, this represents $459,000 inavoided disposal costs. Revenues grew by over$1.4 million/year and the company added 12 newjobs to its operations. In addition to doublingcapacity, Power Pallet added capacity towholesale mulch at $16 per cubic yard deliveredin lieu of burning the waste wood from itsoperations.

Lessons Learned

Flexibility was key in this project as the companyimproved configuration of the multiple pieces ofmachinery and equipment on the production flooras they were purchased and installed. Shiftingfrom burning wood as a means of disposal toprocessing it for sale as a value-added producthas enhanced the company’s performance. Sinceproduction employees were initially resistant toautomation, extra time was devoted to trainingthem and assisting them in working with the newmachinery.

Contractor: City of Schenectady IDAOne Broadway Center, Suite 750Schenectady, New York 12305

Investment:

County: Schenectady NYS EIP: $460,000Contract ProjectManager: Franca Di Crescenzo


Phone: 518.393.7252 Total: $965,692EIP Manager: Linda Jacobs Completion Date: Feb 2000Phone: 518.292.5340



Ontario County Industrial Development Agency (on behalf of New Energy Works of Rochester, Inc.)

Company Background

New Energy Works of Rochester, Inc. is a millworksshop and timberframe structure design/build firm.Perhaps best known for energy efficiency and theuse of sustainable materials in its home andproducts, New Energy Works has incorporated asteadily increasing percentage of salvaged wood inits buildings and building components. Reclaiming(and then re-milling) timbers from industrialbuilding demolition sites supports the reduction offlow into the waste stream and, at the same time,creates a broader selection of value added retail andcommercial products made from recycled material.

Project Description

The purpose of this capital project was to help NewEnergy Works finance several pieces of equipmentdesigned to increase the company’s capacity forsalvaging and re-milling industrial timbers. The newequipment includes a Joinery Machine, a 4-sidedplaner, a 5-head Molder, and a 32 mm BoringMachine. This purchase was matched by NewEnergy Works’ purchase of millwork equipment,computer network hardware and rolling stock.

Project Results

By the end of the project period, New Energy Workswas salvaging and re-milling timbers at a rate

equivalent to 3,270 tons per year --an increase of2,102 tpy over the base year (1998). Thisincrease exceeded the projected target by over350 tpy. About 47% of the supply is derivedfrom NYS sources. N.E.W. pays an average of$614/ton of material to construction anddemolition debris recyclers. By recycling, C&Dcompanies also avoid paying $65/ton in tippingfees. Hence, New York C&D recyclers realize anet benefit of $670,000 annually because ofN.E.W.’s expansion. N.E.W.’s employment rosefrom 45 in the baseline year to 63 at the close ofthe project, an addition of 18 permanentpositions. The company is still seeking qualifiedcandidates to fill another 10-12 positions.

Benefits

This capital project has enabled New EnergyWorks of Rochester, Inc. to expand productioncapacity and continue to be a growing force inthe reclaimed wood products market. The newequipment has allowed New Energy Works toproduce higher quality finished material, andoffer a broader range of recycled products to awider marketplace. In turn, the project helps toreduce the amount of material unnecessarilyflowing into the waste stream.

Contractor: Ontario County IDA20 Ontario StreetCanandaigua, New York 14424

Investment:

County: Ontario NYS EIP: $444,075Contract ProjectManager: Roberta Hutchison


Phone: 585. 396.4460 Total: $890,758EIP Manager: James Gilbert Completion Date: June 2000Phone: 585.325.1944

Research Foundation of the State University of New York at BuffaloOn behalf of Lake Front Recycling

Company Background

Lake Front Recycling is a small wood wasterecycling business located in Lackawanna, NY (nearBuffalo). The company established a supplierrelationship with the developers of a proposedmedium density fiberboard (MDF) manufacturingfacility to be located near its site. The MDF facilitywas seeking to fill 100% of its wood needs withrecycled wood.

Project Description

The purpose of this project was to identify andcharacterize the potential to obtain 16,000 tons peryear of wood waste that would be acceptable in themanufacture of medium density fiberboard. LakeFront would use this information, to developbusiness relationships with the generators of thematerial with the expectation that it would help fillthe needs of the new MDF plant.


The researchers canvassed 152 companies inWestern New York within a 100-mile radius of theLake Front facility. They conducted in-depthanalyses of 46 companies’ waste streams andidentified 16,000 tons of material suitable for MDFmanufacturing.

There were two primary sources of suitable wasteat the identified facilities: production wasteformed during the manufacturing operations andpackaging waste consisting mostly of shippingpallets and crates. A variety of contaminantslimited the suitability of some wood wastematerials. In cases where the wood wastegenerator could be shown that an economical,reliable recycling alternative exists, the generatorwould be willing to participate in supplying theMDF facility.

Implementation of Study Findings

Unfortunately, Lake Front Recycling was unableto fully capitalize on the findings of this project.The MDF facility experienced financial andmanagerial difficulties during the constructionand start-up phases of its operation. Thosedifficulties constrained Lake Front from fulfillingits obligation to SUNY at Buffalo. Nonetheless,the information gained from this project will beshared openly with the MDF facility operatorsand their suppliers. It is expected that the resultsof this project will result in the MDF facilitysecuring a steady supply of its wood waste needsfrom within a 100-mile radius of its facility.

Contractor: Research Foundation of the StateUniversity of New York at Buffalo

Investment:

County: Erie County NYS EIP: $29,995Contract ProjectManager: Lou Zicari


Phone: 716.645.3446 Total: $43,997EMIG ProjectManager: James Gilbert

CompletionDate: April 2001

Phone: 585.325.1944



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