Cookson Group plc has won an exclusive contract to supply the world's top grocery pallet distributor with U.S.-made structural foam molded pallets.
The group's U.S.-run engineering division, which includes Cookson's plastic molding operations in Europe and the United States, already is filling an initial order for 18,000 high density polyethylene pallets for grocery distribution, according to Stuart Daniels, the division's president and chief executive officer.
He said London-based Cookson is close to concluding another deal with Chep USA of Orlando, Fla., to make pallets for the European market.
Chep, a joint venture between United Kingdom engineering giant GKN plc and Australia's Brambles Group, has more than 65 million pallets, mostly wood, in circulation worldwide. Chep stands for Commonwealth Handling and Equipment Pool.
To handle its major new customer, Cookson has invested about $4 million in a 1,000-ton structural foam molding press from Johnson Controls Inc. The firm has been producing the HDPE pallets on a 750-ton JCI machine at its South Pacific Vinyl Inc. plant in Atlanta.
Daniels, who is based in Providence, R.I., said that as the business with Chep grows, the molder will have to install a second 1,000-ton press. The larger machines can operate with two molds and produce 300,000 pallets a year.
``We believe that we are selling more plastic pallets than any other [U.S.] players. We are looking to cover all large markets,'' Daniels said, adding that the six major U.S. players cover separate industry markets.
Of the total U.S. market of half a billion pallets, about one-third is for grocery goods, he estimates.
Cookson also molds structural foam pallets in Europe, chiefly for the beverage industry, according to Daniels.
Cookson Plastics Europe Ltd., its U.K. molding unit, is running a 750-ton JCI press, and Daniels said the unit will probably need to order a twin-mold, 1,000-ton machine late this year.
Cookson expects to invest $12 million on new molding equipment for the pallets in the next year, according to Daniels.
Other Cookson U.S. molding subsidiaries producing plastic pallets include EPC/Loudon Inc. with plants at Mora, Minn., and Latham, N.Y.
Worldwide, Cookson has 22 structural foam presses with 750-1,000 tons of clamping force, plus 42 injection presses of 300-500 tons.
Cookson's total 1997 sales were up 6 percent to £1.9 billion ($3.1 billion) and pre-tax profit rose 8 percent to £179 million ($293 million).
U.S. sales and profit account for 65 percent and 69 percent of the total, respectively.
