Tree care firm becomes custom grinder and mulch marketer

Purchase of grinder starts the (wooden) ball rolling for Indiana company that now works with municipalities and waste haulers - and is buying a composting facility.

AN UNWANTED pile of wood inspired a tree care company in northwestern Indiana to start a custom grinding business for municipalities and then find ways to market the product as mulch. It all happened in 1997 when Russell and Jeremy Hodge took over the reins of the 50-year-old Hodge Tree Service from their father. "We inherited three to four years' worth of wood that was stockpiled on someone else's property," notes Jeremy Hodge, marketing director of the Hobart, Indiana-based firm. "My dad had agreed to help get rid of the wood but had to retire for health reasons before he could do it."

The Hodge brothers decided to make landscape mulch out of the logs. "We're 30 miles from Chicago and there is more lawn product sold in the Chicago to Fort Wayne area than anywhere in the world, so we were in the perfect location," says Russell, company president.

The logs were too large to run through their brush chippers. "We found that it was cheaper to buy a grinder than to hire someone to grind the wood," he explains. The company selected a used Vermeer tub grinder (at a cost of $140,000). "The horizontal grinders we looked at were great for brush and compost facilities but couldn't handle the large logs we had," says Jeremy Hodge. The Vermeer grinder has a 27-foot grapple loader to directly feed materials in, or it can be loader-fed.

"Once we saw how well the machine worked, we realized that there would be nothing for it to do in several months and it would sit around unused eight or nine months of the year," he continues. The brothers decided to approach local municipalities and offer to custom grind their wood residuals. "We went straight to the public works director, recycling coordinator, mayor, city council, or whomever was in charge and got a feel for what they were doing," he adds. "We broke down the municipality's costs and showed them that we could save them time and money."

The tree service now is working with seven municipalities in northern Indiana as well as several waste haulers. "We have enough confidence in our program that municipalities don't have to sign a contract with us," says Hodge. Adds Russell: "We've developed a long-term comprehensive plan, so municipalities don't have to end up dealing with their wood waste on a last-minute, emergency basis."

TIP FEE COSTS ELIMINATED

The municipality unloads wood and brush on its own site and Hodge Tree Service grinds the material there. "Some municipalities were landfilling the wood and our program eliminates their tip fee costs," explains Hodge. "The municipality can dump the wood they collect on its site for free instead of paying to haul it to the landfill. This also saves manpower because it doesn't have to grind it up first at the homeowner's site or at curbside. The municipality just has the costs of collection and grinding." Municipalities that don't want to store the wood residuals at their own site are charged an additional fee.

The tree service met with the state Department of Environmental Management and obtained letters of exclusion for the municipal wood residuals sites. "We didn't want to have to register them as compost sites because we're dealing with untreated wood waste and there's no leachate," says Hodge. "This increased the number of sites that could be used because some city sites don't meet the requirements of a compost facility."

Hodge recommends that the municipalities stockpile brush, chips, and logs in separate piles. "If you have brush over here and wood over there, they'll look different and provide two different products - and even more products if you double grind the material," he explains. "The more products you have, the more money you'll make."

MARKETING GROUND MATERIAL

In most cases, according to the Hodges, the amount of mulch produced is twice as much mulch as the municipalities need. As a result, Hodge Tree Service markets the excess mulch; half of the net revenue goes back to the municipality. "The municipality can recover the grinding cost by having us sell it for them," says Hodge. He estimates the operating costs of the grinder is $125/hour including labor.

Once shredded, the mulch is left to sit on the lot for three to four weeks. "We're not going to grind it on Monday and sell it on Tuesday," he notes. "When you grind the wood it comes off the belt blond and needs a few weeks to brown down." Bulk mulch is shipped directly to buyers from the site.

"The more you move material around, the more hauling expenses are," he explains. "There's only enough profit margin to move the material once."

The company currently markets the mulch in-house but is considering hiring a marketing group that represents manufacturers of lawn and garden products. "We're revamping," notes Hodge, "and are in the process of changing our production practices and how we package and sell our products." The primary marketing methods are cold calling, direct mail, and word of mouth bv landscapers. Plans are in the works to begin selling the mulch in bagged form within the next year to big box stores like Home Depot and Wal-Mart.

Hodge Tree Service contracts out the mulch deliveries, which are limited to an hour's drive from the Hobart office. "We only sell.

it regionally," says Hodge. "There are seven million people in the metro Chicago area, so there are plenty of potential customers."

The contract grinding and mulch businesses have been so promising that the company is purchasing the Fertile Earth compost facility in neighboring Gary, Indiana from First Energy, an Ohio-based utility. The compost facility has been in operation since November, 1997 and is located four blocks from the tree service's current location.

"It's a relatively unique situation for a tree service to operate a compost facility," explains Hodge. "One of the many reasons we're buying it is because we didn't have enough space in our one-half acre yard to store any material. It's just barely big enough for our fleet, storage and maintenance." The compost facility has 15 acres and there is the potential to purchase an adjacent property with 30 acres. "It allows us to take all of our tree service waste and run it through the compost facility, including our large wood and chipper chips," he adds.

"We'll also offer a discount tip fee for local tree services who want to bring wood waste to our yard."

The tree service started composting in early June. "In anticipation of selling it,

First Energy let some processing functions lag and we didn't want the site to be out of material when we acquired it," says Hodge.

The facility is processing logs, municipal wood waste, pallets, grass, and leaves. The feedstocks are composted in windrows 200 to 300 feet long and eight feet high, and are turned with a pay loader. The finished compost will be screened with a rented trommel or star screen.

This year, the brothers expect to process 70,000 to 80,000 cubic yards (cy) of material at the compost facility and 120,000 cy next year. There are plans to expand the company's product line to several types of soils and shredded mulch, as well as wood chips. The tree service also generates 50,000 cy/year of one-inch chipper chips which will be processed and marketed through the compost facility.