Composite pallet producer RM2 (LSE-AIM: RM2) has announced its entry into a strategic manufacturing agreement with Jabil for the mass production of the RM2 BLOCKpal pallet in Mexico. The agreement with Jabil, a global leader in digital manufacturing and supply chain solutions, will allow RM2 to scale production more efficiently to market demand. Initial production is expected to be deployed in Q1 2017. Pallets produced at the facility will be delivered to RM2’s customers in North America.
This agreement is complementary to the deal announced in April 2016 for the production of pallets by Zhenshi Holdings Groups Ltd in China, allowing RM2 to address more rapidly the growing volume demands of its clients. Production costs at the two facilities are expected to be similar. In early 2016, RM2 discontinued North American production, which it undertook at its plant in Ontario, Canada.
John Walsh, CEO of RM2, commented: “When we announced the contract manufacturing agreement with Zhenshi, we re-affirmed our commitment to production in North America. Today’s agreement means that RM2 will have a well-balanced manufacturing capability with efficient, low-cost and modern production bases in both Asia and North America. This will enable us to mitigate cost fluctuations and flex production more efficiently between two highly qualified contract manufacturers and better meet the demands of our customers.
“As previously stated, all production for 2017 is already earmarked to be deployed with our customers in North America. These deployments will include outright sales, rentals, and long term lease agreements. We will update the market with regards to the specifics of these deals throughout Q4.”
“In keeping with Jabil’s pledge to positively impact the world in which we live and operate by addressing climate change and increasing resiliency, we are pleased to collaborate with RM2 in producing an eco-responsible pallet, thereby bringing an environmentally friendly solution to the logistics and supply chain industry,” said Keith Cochran, Vice President, Jabil Global Business Units.
Jabil is an electronic product solutions company providing comprehensive electronics design, production and product management services to global electronics and technology companies. Offering complete product supply chain management from facilities in 28 countries, Jabil provides comprehensive, individualized-focused solutions to customers in a broad range of industries. Jabil common stock is traded on the New York Stock Exchange under the symbol, “JBL”. For more information, visit www.jabil.com.