PLAINFIELD, Ill., April 21, 2004 (PRIMEZONE) -- Insuring an adequate supply of high-quality recycled resin for manufacturing RPM plastic pallets and custom pallet components, management entered into an agreement with First Nation Recycling (FNR) wherein RPM Technologies (OTCBB:RPMM) will acquire FNR's grinding operation and retain the services of its CEO and Chief Operations Officer, Matthew Davis, to sell surplus production.
FNR's recycled HDPE and LDPE resin sales in 2003 were $1.4 million. FNR's widespread contracts to obtain consumer and industrial plastic scrap insure a steady supply of high-quality resin, which will be sold in flake or pellet forms. FNR resin processing incorporates a proprietary system of grinding scrap, which produces recycled resins that are classified as mixed-color or industrial regrind.
This will be a new profit center for RPM, as it anticipates $2 - $3 million in resin sales above and beyond resin that will be used to manufacture RPM pallets. The recycled plastic market is volatile and supplies and prices fluctuate. Having an RPM grinding operation as a part of the Company will generate profits on a regular basis once operations are fully implemented. Management anticipates having the grinders and the attendant equipment under roof and producing regrind within sixty (60) days.
Since FNR has long-term contracts to acquire consumer and industrial scrap at nominal costs, RPM will save from 20% to 25% in costs previously paid for resin from brokers and various suppliers. This translates into lower selling prices for RPM's popular export pallet and for its custom plastic pallet components.
Resin typically accounts for 60% to 65% of a pallet's manufactured cost. RPM's 40X48 export pallet weighs 22 lbs. of resin to mold. can realize a cost reduction of $1.50 to $2.00 per pallet. This is a significant material cost reduction and will enable the Company to market a very competitive 40X48 all-purpose utility pallet. Management expects savings and increased operating efficiency to accrue immediately following implementation of its new grinding operation.
The company estimates sales will continue to accelerate to the $5 to $6 million level this year and higher in 2005. RPM trades on the OTCBB. Their trading symbol is RPMM. Visit the Company's website at "www.rpmplasticpallets.com".
For further information, contact the Company at (815) 293-1190 or write RPM Technologies, Inc., 21061 W. Braxton, Plainfield, IL 60544