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July 10, 2006 02:00 AM

Building a world without wooden boxes

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    BARCELONA, Spain—It was only a comment, but it must have put smiles on the faces of executives from Goodpack Ltd.

    "We would like to see wood packaging disappear," said Jean-Michel Coulon, corporate vice president of purchasing for Michelin, as he wrapped up his speech at the 47th Annual General Meeting of the International Institute of Synthetic Rubber Producers May 15-18 in Barcelona.

    Later, Coulon said Michelin aims to eliminate the use of wood pallets by 2008.

    What Coulon mentioned in his speech is what Goodpack has built a global business around-returnable and reusable metal intermediate bulk containers.

    Based in Singapore, Goodpack owns and manages what it claims is the world´s largest fleet of intermediate bulk containers.

    But what sets Goodpack apart, according to company executives attending the IISRP meeting, is that it leases these containers to customers.

    "Now companies don´t have to invest a whole lot of money up front to acquire these mobile assets that may or may not come back," said David Hampton, vice president of operations for Goodpack USA Inc., based in Aurora, Ill.

    Tire manufacturers are among Goodpack´s major customers. The company was founded 15 years ago to provide returnable metal boxes to the natural rubber industry, which continues as the firm´s largest business segment. Annual sales are about $60 million and the company´s shares are traded on the Singapore stock exchange.

    About three or four years ago, Goodpack began servicing the synthetic rubber industry with its fleet of a million or so containers.

    Since then, leasing metal bulk containers to SR producers has become its fastest-growing market.

    "It´s a marriage made in heaven because, for the most part, our boxes are going to the same place where the synthetic rubber is as with natural rubber," Hampton said. "So we´re already integrated into that supply chain for the tire plants. Now we´re just working with a different set of suppliers."

    Other industries Goodpack serves include edible oils and fats, fruit juices, processed and frozen food, non-hazardous chemicals and automotive parts.

    Goodpack has seen increased demand for its metal containers by the tire industry as a way of eliminating potential contamination of rubber from wooden or corrugated containers, according to the company´s executives.

    "They don´t want wood," Hampton said. "They certainly don´t want corrugation in there, and these are traditional means of packaging."

    The concern is you may get a big splinter of wood or a shard of cardboard in a critical position in the ply of the tire, said Peter Boorman, global synthetic rubber consultant for Goodpack, based in the United Kingdom.

    "That´s a big issue, the potential contamination in the compound and hence the tire," he said.

    But there are other reasons to favor metal containers, the Goodpack executives said, including issues associated with disposing and certifying wooden packaging and the need for the wood to be heat-treated or fumigated before entering a country.

    "It´s just a hassle," Hampton said. "It´s one more reason not to use a wood pallet or a wooden box. So there are a number of issues driving people away from one-way packaging and into a leasing program."

    Goodpack´s office in Chicago is responsible for sales to the synthetic rubber industry, which is primarily a European- and U.S.-driven business, accord- ing to Phil Martino, sales manager of the SR division.

    Besides the U.S. and Europe, where Goodpack is opening a Dutch-based entity this summer, Goodpack has operations in Southeast Asia, Japan and South Korea, as well as Australia and China, which opened last year.

    The company´s business model is simple. It delivers its boxes to manufacturers as needed and they tell Goodpack where they are sending the containers. The end users then notify Goodpack, either by phone, e-mail or through its new Web-based system, to say they´ve got empty boxes and to come pick them up.

    "We then reposition them as efficiently and as effectively as possible," Hampton said.

    For the synthetic rubber industry, Goodpack uses straight-wall collapsible boxes. These are loaded full of rubber onto trucks, rail cars or containers for export, "and then we pick them up in 40-foot containers or truck loads 160 or 170 at a time," Hampton said.

    And for companies wanting to retain ownership of their containers, Goodpack will just service and manage the fleet, Martino said.

    Besides the industries it now serves, Goodpack is looking to extend its container program to the plastics and related fields, industrial products and even latex.

    "Anybody who´s using pallets and stretch wrap, or pallets and drums, is really a candidate for this kind of packaging," Martino said.

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