RPM Technologies Inc. is building a 40,000-square-foot facility to manufacture plastic pallets and grind recyclable plastic material in its headquarters city of Plainfield, Ill.
The new plant is to be operational by September. RPM has purchased several reconditioned grinders and extrusion lines, as well as two compression molding lines, Chief Executive Officer Randy Zych said in a telephone interview.
RPM was established in 1997 as a marketer of materials-handling products. Zych said he is pleased to bring the manufacturing of some products in-house.
``We don't really see a lot of profit from the contracted stuff,'' he said. He estimates the firm will gain $2 million to $3 million in sales annually by adding in-house recycling alone.
Also, the regrind capability will allow RPM to enter long-term contracts with suppliers of bulk material.
Exportable pallets are one of RPM's largest sources of revenue, Zych said.
The company sells a large assortment of custom plastic pallets in rackable, stackable and nestable forms. It also sells pallet containers and racks, along with a selection of steel and plastic lockers.
RPM offers products from more than 30 manufacturers. Some of those contracts will be retained, Zych said, to augment RPM's proprietary line of pallets and recycling services.
Laurus Funds, a firm that invests in small-cap or microcap companies, is providing $2.5 million for the expansion. The money is part of a convertible debt agreement in which RPM will repay Laurus' loan or Laurus will take stock in the firm. RPM is publicly traded on an over-the-counter bulletin board.
The company posted first-quarter sales of $478,000, up from $95,000 for the same period a year ago.
``We're a young company, but we feel like we're growing,'' Zych said. His goal is to make RPM into a complete materials-handling company with broad abilities. ``The first three years we were just establishing things. But now we're really starting to turn the corner.''