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Axios readies bio-based pallets for market

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September 13, 2012

VAUGHN, ONTARIO (Sept. 13, 2:05 p.m. ET) — Axios Mobile Assets Corp. is bringing its lightweight, bio-based shipping pallets to market.

The startup, based in Vaughn, Ontario, recently entered into a five-year, $300 million purchase agreement with pallet management company Ongweoweh Corp. Axios will ship its first batch of pallets — 20 percent of the first-year requirements for the blanket order — in October.

To meet demand, Axios recently acquired a controlling interest in a Guelph, Ontario-based thermoset molder.

Axios, a publicly traded company, said it could not disclose the name of the molder or discuss terms of the deal.

The facility, which employs about 12 workers, will provide Axios with molding and automated assembly capabilities and will serve as the company’s research and development center.

The facility will begin operations in October and has an annual capacity of about 200,000 pallets, enough to cover the first year of orders, said Rich MacDonald, president and CEO of Axios, by phone.

The facility is Axios’ first manufacturing site and has room for expansion, MacDonald said, adding that the company has a backlog of orders stretching over more than the next five years.

The deal with Ongweoweh is Axios’ first big step toward commercialization. The two companies have been running tests and discussing data for about two years, and Ongweoweh sees the Axios’ pallets as a “fantastic alternative to what they’re currently offering their clients,” MacDonald said.

Axios manufactures pallets using a soy oil-based resin. The composite material allows for pallets that meet the same weight requirements as wood but are 30 to 40 percent lighter, MacDonald said.

“The construction isn’t terribly different, but in terms of being best in class, it’s absolutely the lightest in the market for a plastic pallet,” he said.

The 48-by-40-inch pallets weight about 47 pounds and can handle a rackable load of up to 2,800 pounds. To meet the same specifications, a wood pallet would need to weigh about 85 pounds, he said.

Companies that use the pallet have the potential to earn revenue in carbon credits, he said. “It reduces costs of shipping goods from A to B, and that’s obviously a very important feature that no one else has.”

The pallets are designed to cut-down on loss. The metal-free structure and soy-based material has no scrap value, preventing them from being a target for theft.

They also come coupled with proprietary RFID and track-and-trace technology that allows manufactures to follow the pallets every step of the way, MacDonald said.

Axios says its pallets offer several other advantages — the material is inherently flame-retardant, so the pallets do not need to be treated with controversial retardants like decabromine, and is naturally phytosanitary and has limited liquid absorption. The pallets meet industry standards and FDA requirements for the pharmaceutical and food and beverage industries.