6th Apr 2016 08:04
LONDON (Alliance News) - RM2 International SA on Wednesday said it has entered into a strategic manufacturing agreement with China's Zhenshi Holding Group Co Ltd.
RM2, which develops and sells shipping pallets and provides related logistical services, said Zhenshi is a major shareholder in China Jushi Co Ltd, a fibreglass manufacturer, a key raw material used in making RM2's BLOCKpal pallet.
The agreement will allow for mass production of the BLOCKpal pallet in Tongxiang, at a facility owned by Zhenshi Group Huamei New Materials Co Ltd.
Initial production will started in the first quarter of 2017 with a target of producing 1.5 million pallets a year, growing to around 5.0 million over the medium term.
RM2 said the deal will allow it to address volume demands from its clients and will significantly reduce its costs per unit.
However, as some RM2 manufacturing assets will be moved to China and due to reduced production from its base in Canada, RM2 said it will fall "well short" of its 2016 production target.
RM2 shares were up 0.1% to 37.05 pence Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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