Brambles Decides Against Plastic Pallets Due to Escalating Costs
30 Junho 2022 - 4:04AM
Dow Jones News
By Stuart Condie
SYDNEY--Brambles Ltd. decided against moving into plastic
pallets after the capital cost for each unit increased by 50% in
less than a year.
The Australia-listed pallet supplier on Thursday said that its
decision not to proceed with the wide-scale production of what it
called an industry leading plastic pallet demonstrated its
disciplined approach to capital allocation. Brambles had engaged in
a trial with U.S. retail giant Costco Wholesale Corp.
"In the current market environment, the price premium and
commercial terms required to offset higher total cost-to-serve and
deliver an appropriate return for Brambles' shareholders were
prohibitive for Costco and its suppliers," Brambles said in a
statement.
Capital costs had risen by 50% since September 2021, it
said.
Plastic is being considered by industries as an alternative to
traditional timber due to factors including its relative durability
and low maintenance needs.
Brambles said that its relationship with Costco remained strong.
It said any reduction in Costco volumes would likely be replaced by
new business wins.
"We will continue to work closely with them as they assess the
viability of other options to convert to a plastic pallet pool,"
Brambles CEO Graham Chipchase said.
Write to Stuart Condie at stuart.condie@wsj.com
(END) Dow Jones Newswires
June 30, 2022 02:49 ET (06:49 GMT)
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