Partnering to Grow
Sometimes one is stronger than two.
That is the lesson behind the recent decision by two pallet companies in the Northeast, Pallets Unlimited and Generated Ltd., to launch a new venture. These two companies have joined forces to start Greenway Products & Services LLC, a full service recycler serving the Tristate area of New York, New Jersey and Connecticut with two locations.
Facing a tough core market, high logistics costs and operational challenges, both companies decided that instead of going against each other it would be better to partner up as a strategy to fuel
Tony Fabrizio, president of Generated Ltd. and current CFO of Greenway, stated, “We did business back and forth for over five years. And we both had a different niche in the market…The major reason for our partnership is growth, we can do more things together than separately.”
Fabrizio explained, “There are only two ways you are going to grow in this industry. Either you are going to have to get an infusion of capital, which means you are going to have to borrow money. And right now banks are not lending. Or you are going to acquire business by mergers and partnerships.”
Generated mostly did 48×40 repair while Pallets Unlimited did a lot of specialty pallets. Also, Generated has developed a strong recyclables business helping customers dispose of waste plastic, metal, shrink wrap, corrugated, etc. Fabrizio added, “We are looking to become a more full service recycling company
At Generated we had done corrugated and plastics recycling. We can offer our customers more services. And from a logistics standpoint, it works out better for customers having two locations.” Dominick Davi, former president of Pallets Unlimited and current president of Greenway, commented, “The Greenway formation has allowed us to become a lot bigger overnight, and by growing in size, we are able to go after and service bigger accounts. A great part of the formation is that we can offer our customers more services.”
Fabrizio clarified, “Sometimes bigger is better. Pallets are hard to come by; you can’t easily find cores right now. And if you are going to go out to some of these bigger locations, they don’t want to deal with you if you are a small mom-and pop company.”
The two companies formed Greenway in February 2015. Each company brought strategic skills to the Greenway formation, and the idea is that over time some of those services will be replicated at the other facility. The Pallets Unlimited plant was located on Long Island, New York while the Generated plant was situated in New Brunswick, New Jersey.
Having the right machinery in place and coordinating the plants with software has been critical for the new venture to work. One of the major suppliers to Pallets Unlimited has been Mona Tracy of Universal Machinery Sales. Her expertise and solid equipment has helped Pallets Unlimited be successful. Also, the use of the Palmate™ enterprise resource planning (ERP) software is critical to run two plants working together as one. More details can be read in the original article.
Article Written By Chaille Brindley
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