C.W. Products Inc. has been around for 57 years, but the small, Spokane Valley maker of pallets, custom crates, and other wood products has undergone a lot of change in the last 14 months.


Since June 2003, the company has changed hands and has re-entered a market it had drifted away from in recent years. Also, the new owners, Ron and Shelly Johnson, have added new technology that replaces pencil-and-paper design with design software and have secured a certification that makes the company more desirable to customers that ship internationally.


Those changes, along with a rebound in a couple of market sectors C.W. Products serves, have resulted in a substantial increase in gross sales for the company, Ron Johnson says. C.W. Products posted $52,000 in sales last month, compared with $22,000 in June 2003, when the Johnsons bought the company.


This is growing at a great pace, he says.


The company is on track to hit sales of about $500,000 this year and hopes to reach $1 million in sales within the next few years.


Located in the Spokane Business & Industrial Park, at 3808 N. Sullivan, C.W. Productsalso known as Christian Wood Productsoccupies about 10,000 square feet of manufacturing and office space, as well as a half-acre yard for supply and product storage. It employs five people full time, including the Johnsons.


The company has more saws than it does people. Its tools include three pneumatically activated chop saws for cutting dimensional lumber, a large table saw for cutting plywood used in crating, a resaw that cuts boards widthwise, a pallet notcher, and a shaper that rounds the corners of boards.


We have some upside capacity if we need to use it, Ron Johnson says.


The key challenge the Johnsons have faced thus far has been lumber costs, which have increased dramatically during the 14 months they have owned the company, Ron Johnson says. The company has decided not to pass all of those hikes on to customers, which has allowed it to stay competitively priced and keep its customer base. Profit margins have narrowed as a result, he says.


The companys clientele consists almost exclusively of Spokane-Coeur dAlene area businesses, mostly electronics manufacturers and food producers. The Johnsons decline to name any of those customers.


Shelly Johnson says that about 70 percent of the companys sales involve pallets, and the other 30 percent comes from custom-crate work. Profit margins are greater in the custom-crate business, however, so that portion of the business accounts for about half of C.W. Products profits.


In addition to pallets and crates, the company again has begun making the wooden frames that go inside mattresses made by Northwest Bedding Co., of Spokane. C.W. Products had made such frames for Northwest Bedding for a number of years, but its previous owner had gotten out of that product line to concentrate on pallets and crates.


Ron Johnson says the company renewed its relationship with the Spokane-based bed maker two months ago, and currently is making between 150 and 200 frames a month.


C.W. Products also has found a small niche in crating and shipping large items sold by people here through online auctions, mostly on eBay. For example, earlier this month, a Spokane man brought in an old truck engine hed sold online for $15,000 to a man in New York. He hired C.W. Products to crate the engine for shipping.


C.W. Products commercial customers typically package and ship their goods themselves, using the Spokane Valley companys pallets and crates.


To secure business with Spokane companies that ship internationally, C.W. Products recently has attained a certification that states the wood it uses for international shipping is heat-treated to protect against insect infestation. Called European Union Heat-Treat Certification, the designation is administered by American Lumber Standards Committee Inc., of Germantown, Md., and C.W. Products now is audited monthly by the Pacific Lumber Inspection Bureau so it can maintain its certified status.


The lumber C.W. Products uses for crates that carry international goods is heat treated at lumber mills, then shipped to the pallet-and-crate maker.


Some countriesmore all the time, Shelly Johnson contendsstipulate that wood crates carrying imports must be heat-treated so that any insects in the wood are killed and thereby not introduced to that country.


Weve been told nightmare stories of inventory sitting on a dock in another country because they couldnt prove that the crate wasnt contaminated, Shelly Johnson says.


New software


Internally, C.W. Products has added a software program through which the company can design pallets and crates and create work orders. Ron Johnson says the company previously had designed its products by hand, and an intermediate supervisor would instruct workers on how to build the various items.


The key shortcoming was that there was no consistency in designs and scheduling before, he says.


Since putting in the new system, the company is operating more efficiently and has been able to eliminate that intermediate supervisor position, he says.


Before buying C.W. Products, Ron Johnson had worked as a manufacturing scheduling manager at the Agilent Technologies Inc. plant in Liberty Lake. He says he started looking at buying a small business upon learning that his job at Agilent was going to be eliminated.


While Agilents Liberty Lake plant is much larger than C.W. Products, the two operations both are high-mix, low-volume shops, and the work he has done for both has some similarities, he says.


Shelly Johnson had operated a small business called Creative Typesetting in the 1980s, but had been a stay-at-home mother for a number of years before the couple bought C.W. Products.


The company was started here in 1947 as Christian Wood Products, by John Christian. It initially made surveying stakes and briefly made wooden coffins, then started making pallets.