RM2 USA, Chatham, N.J., entered into a landmark alliance with China-based Zhenshi Holding Group Co. Ltd. for production of the new BLOCKPal pallet. Zhenshi is a major shareholder of China Jushi Co. Ltd., a manufacturer of fiberglass, which is one of the key raw materials used in the manufacture of the BLOCKpal pallet.
The agreement will allow for the mass production of the BLOCKpal pallet in Tongxiang, adjacent to the principal Jushi fiberglass manufacturing plant. Initial production is expected to be deployed in Q1 2017, and will target circa 1.5 million pallets per annum, with projected growth to at least 5 million pallets per annum in the medium term. Pallets produced at the facility will initially be deployed to RM2's North American and European customers.
The two companies will also develop additional areas where their resources and expertise are complementary, particularly in logistics. This agreement allows RM2 to address the volume demands of its clients whilst significantly reducing cost per unit. Some of RM2's manufacturing assets will be transferred to China.
"We believe that large parts of the Chinese logistics chain will become palletized over the coming years. We are convinced, from our own extensive research, that theBLOCKpal is the optimum product in the market,” says Zhang Zhenshi, chairman and president of Zhenshi and president of Jushi. “Partnering with RM2 allows us to seize first mover advantage, as China moves to palletize its economy in a region of the world with limited forestry resources for the manufacture of wooden pallets. Introducing the BLOCKPal pallet to China will put us on a cleaner and more sustainable path. China needs to reduce its logistics costs, and we believe that the widespread use of sustainable, reusable pallets will be a key component of that. We will use all our resources to ensure maximum penetration of the BLOCKpal pallet in China and the broader Asian markets, and we look forward to further developing our collaboration with RM2."
“This is a strategic, long-term agreement with Zhenshi, which will allow us to offer even greater savings to our existing and future customers in North America and Europe due to the lower CPU, whilst also giving RM2 access to the vast Chinese market,” adds John Walsh, chief executive officer of RM2. “This agreement will enable RM2 to produce pallets at a greater rate and at significantly lower cost, while at the same time, Zhenshi's extensive corporate holdings and relationships makes it uniquely positioned to open the Asian market forthe BLOCKpal pallet. RM2 has taken steps to ensure we have the pallets available to service our customers during this transition of our manufacturing assets."