Plastic pallet maker PalWeb Corp. is shifting its entire injection molding work to a newly acquired facility in Bettendorf, Iowa, and focusing on recycling operations at its existing plant.
The Dallas company is poised to gain market share in plastic pallets after several years of progress in product development but with limited sales, said company President Warren Kruger in a Nov. 20 telephone interview.
The company has developed an injection molded pallet produced by extruding polyethylene into a mold from four positions, cutting cooling time and energy costs significantly, Kruger said. The company plans to make most of its pallets from recycled PE and focus on the food, beverage and pharmaceutical industries, he said.
Kruger and his brother, Paul, have backgrounds as investment bankers but stepped in to finance and manage PalWeb after other investors dropped out.
The two hope to create a new pallet that will compete in a price-based market, Warren Kruger said.
``We finished working on the new equipment in the middle of last year and now we're up and operational,'' said Kruger, based in Tulsa, Okla. ``We had virtually no sales until then, but now we're making a big thrust forward and are also pushing our efforts on the marketing side. We've got to fill capacity with our extruder technology.''
To help with that push, the company paid $12.5 million in September to buy Greystone Plastics Inc., a maker of plastic beverage pallets based in Bettendorf. Now, PalWeb plans to relocate its molding work from Dallas to the 60,000-square-foot Iowa plant, in a move to save costs and increase productivity by consolidating molding in one location, Kruger said.
Two presses will move from Dallas to Bettendorf this month, Kruger said. Former Greystone owner Bill Hamilton will run the Iowa facility as senior vice president of PalWeb.
The company also will install another grinding line in Dallas and produce more in-house PE resin for its pallet operations, Kruger said. The company believes that by offering 100 percent recycled content on most of its pallets, it can keep prices low, he said.
``We continue to see a move to plastic in pallets,'' Kruger said. ``In the pharmaceutical industry especially, you can't use a wood pallet that has oil and gas dripped on it. Plastics give you cleanliness and keeps the product hygienic.''
PalWeb expects fast-paced growth, with sales this calendar year of slightly more than $10 million, Kruger said. For the past fiscal year, ended May 31, the company only recorded sales of about $1.28 million, he said.
PalWeb still must work to become profitable. For the quarter ended Aug. 31, the company lost $600,886 on sales of $193,219. But that did not include sales from the recently purchased Greystone operations.
With the Greystone acquisition, PalWeb said it has 55 employees and the capacity to make more than 550,000 pallets a year.
Before Greystone was purchased, PalWeb was making about 1,000 pallets a months, or 12,000 a year, according to its quarterly report.