RM2 International S.A.

15th December 2014

Logistics BusinessRM2 International S.A.

Operational Update

RM2 International (“RM2” or the “Company”), the vertically-integrated innovator in pallet development, manufacture, supply and management, is pleased to provide the following operational update and to announce continued progress in the deployment of its BLOCKPal™ pallet.


Contract Wins

The Company has now entered into long-term, scalable contracts for the supply of pallets with a total of seven customers and is currently deploying pallets under provisional agreements with a further six companies.

In particular, the Company announces that it has now entered into a substantial, long-term contract in North America with a NYSE-listed provider of print and related products and services. The contract relates to the initial deployment of BLOCKPal™ pallets in locations expected to generate approximately 450,000 pallet trips per year, with a stated intention to grow the level of deployment during 2015.

Other contracts and agreements are with large pallet users across a range of industrial sectors and, in addition to those customers identified in the Company’s interim results in September 2014, include a contract with one of the world’s leading food and beverage companies. This contract, under which the Company will service certain of its UK and continental European closed loops, is also expected to expand significantly through the first half of 2015.

The Company remains focused on converting its significant pipeline of opportunities into sizeable long-term orders and on extending its services with existing clients through increasing its understanding of their logistics systems and will provide further updates in this regard in due course.


Manufacturing

Production capacity in the Company’s Ontario facility continues to develop in line with earlier guidance, with a total of 26 pultrusion machines and four automated assembly lines currently installed, providing capacity for the pultrusion, fabrication and assembly of in excess of four million BLOCKPal™ pallets per year. As anticipated, further efficiencies are being identified in the pultrusion processes, resulting in an increase in the Company’s expected pultrusion capacity. The Company is also working to identify potential gains in both the fabrication and assembly lines as overall production capacity increases.

Production levels continue to build with, and are being managed according to, demand as individual machines are tested and brought into service. Production is currently running at a rate of approximately 3,000 BLOCKPal™ pallets per day which is expected to increase significantly with demand through 2015.


Reduced Environmental Impacts of RM2 BLOCKPal Pallets

In early 2014, the Company commissioned an independent, peer-reviewed, life cycle assessment study (the “LCA Study”) to compare the environmental impacts of RM2’s BLOCKPal™ pallet with those of the standard multi-trip wood pallet. The results of the LCA Study show that the BLOCKPal™ pallet provides significant reductions in global warming impact and several other important environmental factors compared to the standard multi-trip wood pallet. The standard multi-trip wood pallet is itself regarded as a more sustainable alternative to the single-trip white wood pallet.

Through the findings of the LCA Study, the Company is now able to demonstrate to major corporations that the BLOCKPal™ pallet can help them achieve sustainability goals and reduce their carbon footprint, whilst also reducing cost and improving the quality of assets in their supply chains. This is a significant development and a key competitive advantage for the Company, when compared to other pallet manufacturers and pallet rental companies.

The LCA Study compared the energy and resource inputs, the waste and emission outputs and the key potential environmental impacts of RM2’s BLOCKPal™ pallet and standard multi-trip wood pallet across the full product life cycle, from raw materials through manufacturing, distribution, usage and end of life disposition. The gains observed are due to a number of factors specific to the BLOCKPal™ pallet, including its lighter weight and considerably longer life. In particular, in comparison to a standard multi trip wooden pallet, the LCA Study found that RM2’s BLOCKPal™ pallet reduced:

  • Global Warming Potential by 21% 
  • Primary Energy Demand by 50% 
  • Acidification Potential by 31% and 
  • Eutrophication Potential by 44%. 

The Executive Summary of the LCA Study is available by e-mail request to info@rm2.com.