Plastic Products, Inc.
Company History
Plastic Products,
Inc. (PPI) involvement with Plastic Pallets began when Mr. William DeGironemo,
the companies current president, conducted extensive market research
of the pallet industry. The research reveled both the vastness of the
market and the demand for a strong, reusable, lightweight pallet to
replace the traditional wood pallet.
Following-up on the initial
research, Mr. DeGironemo designed and built a molded plastic pallet
to meet industrial standards. Test marketing was conducted using an
initial run of 2,000 pallets. Results confirmed high levels of acceptance
and the demand for a plastic pallet that could compete with wood on
strength and cost.
Eventually,
the manufacturing method was changed from a vacuum formed process to
a structural molded design. This change produced stronger pallets with
longer life-cycles, less production time and cost and more price competitive
product.
PPI
was founded in 1984 under the name of Plastic Pallets, Inc. In January
1993 the company's name was changed to Plastic Products, Inc. The new
name reflects the companies intent to manufacture and sell pallets as
well as other plastic products from recycled resins. PPI currently uses
a molding process to manufacture its pallets and it has identified a
revolutionary extrusion process to economically produce pallets
and a wide variety of other products including plastic lumber, fence
posts, car stops and driveway reflectors.
Overview of Pallet
Market
Pallets are an
essential component of industrial operations worldwide. As moveable
platforms, pallets are used to transport and store materials and goods
in virtually every commercial sector. 
Pallets
are an integral part of industrial material handling systems from production
line, to shipping, storage and to the customer.
The pallet industry is
almost unique in that it does not depend on any single industry or group
of industries for revenue. Moving products, inventory and equipment
is an essential part of every business; pallets make the process easy
and efficient.
The largest users of pallets
are the grocery and food industries. However, pallets are used as an
essential element of material handling systems in such diverse industries
as home appliances, construction materials, furniture, light machinery,
airlines, automotive, paper, glass, printing, pharmaceutical and cosmetics,
petrochemical, beverages, cans and housewives. Plastic pallets are even great for home usage such as in garages, basements, and storage units since plastic pallets will withstand environmental factors such as floods.
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Bug
Problems
Until
recently, virtually all pallets were made of wood. Two factors contributed
to the use of wood; 1) the low cost and plentiful supply of lumber,
and 2) the ease of manufacturing.
Many small producers entered
the market since the only manufacturing equipment was a power saw and
nailing machine. As a result the wood pallet market has been very competitive
with small profits.
Now, lumber is becoming more scarce and expensive and is pricing many
smaller manufactures out of the business. Even larger manufacturers
have had to reduce production, sometimes by as much as 50%. Meanwhile,
large users are protecting their sources of supply and looking for acceptable
alternatives such as plastic.
There are several other
forces beginning to impact the shipping and warehousing industry
which are in turn effecting the pallet industry. First as in many industries
there's a newfound awareness of the importance of using environmentally-friendly
products. In the case of plastic pallets not only does their use reduce
the need for lumber but since they're also recyclable they vastly reduce
the environmental impact of wooden pallets. Furthermore, the fact that
plastic pallets can be sterilized reduces the chances of infestation
or contamination of sensitive products such as food and pharmaceuticals
thus making them more attractive to these industries.
Second, every segment of
US industries are looking for ways to reduce costs and maintain quality.
The fact that plastic pallets last longer, have lower life-cycle cost,
are nestable and weigh less, creates powerful incentives for industries
looking to reduce freight and handling costs.
Splintering is a major
problem with wood pallets especially in the handling of food. Food processors have found that wood splinters pierce
plastic bags of raw materials during shipping and splinters have even been discovered
in the food. Airlines have had problems with wood splinters
jamming the tracking devices used to load planes. Plastic pallets don't
splinter and thus avoid these problems.
Also, the fact that plastic
pallets create far less opportunities for industrial accidents and resultant
worker compensation claims provides another competitive edge to industries
that use plastic instead of wood.
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Advantages
of Plastic Pallets
The use of plastic pallets provides a wide array of benefits to industry.
- Life-Cycle
Costs - Government
studies indicate that a wood pallet averages five (5) trips before
major repairs or disposal occurs. PPI's pallets average 50 trips and
the company offers credit allowances toward repurchase when its utility
ends. On a per trip basis, plastic pallets cost an average of 50%
less than wood. A sample cost comparison:
|
|
Plastic
Pallets
|
Wood
Pallets
|
|
Average Cost
Average Trips
Avg. Cost/Trips
|
$26 - $30
50
$0.52 - 0.60
|
|
- Weight
- PPI's pallets weigh anywhere from 50% to 75% less than comparable
wooden pallets. In addition PPI's pallets are "nestable",
reduce storage space and cost less to ship. Lower pallet weight allows
companies to ship more product per trip with lower freight costs and
faster handling and turnaround times.
- Durability
- Tests have demonstrated that PPI's pallets have superior impact
resistance compared to wooden pallets. The increase durability means
longer life and lower life-cycle costs.
- Moisture Resistance
- Wooden pallets absorb moisture and must be stored in an enclosed
area. When exposed to moisture, wooden pallets gain weight and lose
strength thus increasing shipping costs and potential liability from
breakage. Plastic pallets DO NOT absorb moisture and can be stored
in less expensive outdoor storage facilities.
- Sanitation
- The food and drug industry have high standards for pallet cleanliness.
Contaminated pallets can destroy entire shipments of foods and other
products. Unlike wooden pallets, plastic pallets can be cleaned and
sterilized without adverse effects.
- Safety
- Handling heavy wooden pallets results in many accidents, worker compensation
claims, damaged goods and product losses. Plastic pallets has proven
strength and safety while significantly cutting weight.
- Design Flexibility
- Plastic pallets can be molded to accommodate specific industrial
requirements and if desired, can be color coordinated for easy identification or company branding.
- Environmental
Benefits and Low Maintenance - Without nails, splinters and
broken planks, plastic pallets require little maintenance. At the
end of its life-cycle, plastic pallets can be recycled through grinding
and reusing the resin. Environmentally, the use of plastic products minimizes
the use of lumber while reusing a renewable resource.
- Savings from Reduced
Breakage and Loading Delays - Broken Wood pallets result in
both product losses and increased freight costs. The superior strength
of plastic pallets results in less breakage, less product losses and
lower shipping costs.
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