Pallet Manufacturer Business Plan

ATP’s product – the RST-PAL pallet is a unique and revolutionary pallet made from a new, patent protected, material of recycled scrap tires, a small amount of recycled plastic and a bonding process. The function specifications of our pallets are identical to the existing wooden pallets (e.g. sizes, four ways entry, upper deck coverage etc.) except that RST-PAL pallets are much more durable and longer lasting which makes penetration into the existing markets less difficult. The patented process and product gives our RST-PAL pallets the following advantages over the existing pallets:

• RST-PAL pallets are less costly to buy and maintain.
• RST-PAL pallets are more durable and indestructible.
• RST-PAL pallets carry 15 times the load of a similar wood pallet.
• RST-PAL pallets are rackable, stackable, and longer lasting than wooden pallets.
• RST-PAL pallets do not absorb liquids and are easy to clean.
• RST-PAL pallets are guaranteed for years.
• RST-PAL pallets have NO competition.
• RST-PAL pallets are environmentally friendly and are, themselves, a recyclable product.
• RST-PAL pallets are made of recycled scrap tire rubber material using a newly patented process which includes rubber, recycled plastics, and a binder system.

It is a rare occasion when a company can make a significant contribution to our environment as well as create an important long awaited product that will provide substantial cost savings for its users and allow them the opportunity to use and promote environmentally friendly, recycled products.

According to a study by the Business Communications Services, Norwalk, CT., wooden pallets will come under increasing challenges from alternative pallet materials such as corrugated cardboard, plastic, and metal. The study, titled “The Changing Competitive Pallet Industry”, states the lost market share for wood “will be a direct result of environmental concerns, and the successful introduction of pallet leasing and alternative pallets made from new materials”. The study said corrugated pallets were chosen “because of their easy disposal and their light weight, although they are slightly more expensive and more susceptible to damage than wood. The study predicts market share growth for corrugated to jump from 5.6 million units in 1991 to 20 million by 2001. It predicts plastic pallets will grow from 0.9 million units to 1.5 million in 2001. Growth for wood pallets was estimated at 1.4% per year over the next ten years.

According to the National Wooden Pallet Container Association (NWPCA), its Strategic Planning Committee suggests that its members educate pallet users toward using higher quality, reusable multi-trip pallets instead of cheaper single use pallets. From a list of 62 potential threats to the wooden pallet industry, the committee chose lumber supply/raw material availability as the top threat. Other top threats identified by the committee include frozen thinking on the part of the industry, demonstrated by an unwillingness to recognize or adapt to the new realities of the marketplace, and environmentalists, a threat recently demonstrated by the draft Executive Order which would have banned wood pallets from use by the Federal Government.

A Clinton Administration Executive Order entitled “Federal Recycling, Acquisition and Use of Environmentally Preferable Products and Services” requires government agencies and those doing business under government contract to begin using “environmentally preferable” products made from recycled materials.

Paul Evanko, principal and vice president, St. Orge Company, York, PA, stated, “Pallets must adhere to a high quality standard”. “Poor quality pallets carry a hidden cost beyond the price paid and customers should be encouraged to purchase the best quality they can”. “Alternative materials including plastic, recycled and composite materials will emerge and pallet users will seek these pallets because of limited storage space, efficient handling weight and full four-way entry,” Evanko contends. “Wood will still be predominant,” Evanko said, “but there is a niche for alternative materials in the distribution flows”.

The Earth Works Group, Berkeley, CA states; “U.S. companies could be spending up to $1.75 billion dollars a year just to throw wooden pallets into landfills”. The Pallet Container Research Laboratory at Virginia Polytechnic Institute and State University, Blacksburg, VA states “calculations show the annual wooden pallet production in the U.S. is using in excess of 3.5 million trees”.

3.1 Innovative Technology

Background  (*)
A major technological obstacle, which the recycled rubber market must overcome, is the nature of the rubber itself. Rubber used in the manufacturing of tires is vulcanized (rubber + sulfur) combined in the presence of heat and thermo set (formed into shape by steam and pressure – also referred to as a “cured” product). To date, no technology has been able to devulcanize rubber (break the carbon-sulfur bonds).

As such, thermo set rubber cannot chemically bond with any other polymer (rubber or plastic) to a degree anywhere approaching the uncured rubber. If, however current research is able to remove this obstacle, a very significant market will be opened.

 (*) Scrap Tire Management Council, 1400 K Street, Washington, D.C.

Current usage
Today’s usage of scrap tire rubber reaches about 7% of the annually accumulated scrap tires. Each year, about 250 million scrap tires accumulate throughout the U.S. This quantity of tires represents 3.75 billion pounds of crumb rubber from which only 262 million pounds (7%) are recycled and another 187 million pounds (5%) are used as tire derived fuel (TDF), which is a dirty fuel like coal, and requires strict EPA controls, is only being burned in a few states.

According to the Scrap Tire Management Council there were seven markets listed for recycled scrap tire rubber. These markets without exception utilize crumb rubber with all of the steel, wire, and textile removed, as an additive to rubber-modified asphalt (25%); pneumatic tires (25%); athletic fields (20%); bound rubber products (15%); friction material (5%); molded rubber products (5%); and molded rubber/plastic products (5%).

The new technology and the patent
Mr. Dan Radke has overcome the obstacle mentioned in the article, (para.1) above. Mr. Radke’s invention of this “unique new material” through formulation and different particle sized recycled scrap tire rubber has created a tough, durable, hard and rigid material from which RST-PAL pallets are manufactured. The process is absolutely unique as proven by the issue of the utility patent protecting the pallet and process of making thereof. This unique and strong material and the usage of it for making pallets will save pallet users throughout the world millions of dollars annually in costs associated with purchasing, repairing, replacing and discarding broken wooden pallets.