Western Pallet Association

Please direct inquiries about the WPA to David Sweitzer,

P.O. Box 1095, Camas, WA 98607

Ph. 360 335-0208

Email: wpa@westernpallet.org

Website: www.westernpallet.org

Way Out West February 2013

Executive

Mark Garnett President Kelly Bennion VP Carolyn Beach- Skinner Sec/Treas Tom Worthen Past Pres. Dave Sweitzer Exec. VP.

Directors

Pat Sherry Tom Thayer Dave Uppal

Associate Directors

Casey Dean Paul Masica

CHEP parent Brambles is enjoying the benefits of new customer wins in North America. Net profit grew from US $239.5 million to US $302.5 million for the six months ending December 31, 2012. The pallet giant generated sales revenue of roughly US $2.9 billion in the six months ended 31 December 2012, up 4%, as a result of strong new business growth, especially in CHEP USA, the continued expansion of its RPCs segment and ongoing growth in emerging markets. Operating profit was US$481.4 million, up 14%. Underlying profit was US$490.0 million, up 7%, reflecting sales growth, efficiencies in the pallets business and scale benefits in RPCs. “This result is a reflection of the strength of our established operations and our ongoing ability to deliver profitable growth from expanding and diversifying our unique supply-chain equipment pooling expertise, said Tom Gorman, Brambles CEO. “The continued growth and improved efficiency of the Americas region of our Pallets segment, despite only moderate improvement in economic conditions to date, is particularly pleasing. The Europe, Middle East & Africa (EMEA) region is performing resiliently and is on track to deliver efficiency gains.” Gorman noted that the RPCs segment saw constant currency sales revenue growth to be between 10% and 15% with a solid future outlook. “The benefits of our increasing scale will enable us to continue to improve profitability as we expand,” he said. (Continued on Page 3).

Brambles Boosts U.S. Sales and Profits

Jaspinder S. Brar

Vice-President Advance Lumber Remanufacturing

www.theadvancegroup.net E-mail: jbrar@theadvancegroup.net Phone: 604-580-4918 Fax: 604-580-4998 Toll Free: 1-888-791-2323

Upcoming Events

04/03/2013 - 04/04/2013 International Wood Composites Symposium Seattle, Washington Ph. (509) 335-2262, www.woodsymposium.wsu.edu 04/17/2013 - 04/19/2013 International Wood Products Assn. Annual Conven-tion Vancouver, B.C. Ph. (703) 820-6696 www.iwpawood.org 05/06/2013 - 05/10/2013 Hannover World Trade Fair for the For-estry and Wood Industries Hannover, Germany Contact Information: www.ligna.de

05/14/2013 - 05/16/2013 United Fresh Produce Assn. Annual Show & Convention San Diego, California Ph. (202) 303-3424, www.unitedfresh2013.org 09/23/2013 - 09/25/2013 PACK EXPO Las Vegas, Nevada www.packexpo.com 10/16/2013 - 10/18/2013 Interpal VIII Conference Bordfeaux, France www.fefpeb.org

WAY OUT WEST February 2013 Page 2

Brambles Boosts U.S. Sales

(Continued from Page 1) The Brambles CEO added that Brambles is excited by the prospects for immediate profitable growth in the Intermediate bulk containers business following the recent acquisition of Pallecon, as well as the long-term growth opportunities in the aerospace and automotive sectors. Brambles also announced that it is simplifying the organization structure of its pallet business. Peter Mackie, currently Group President of the Americas, will assume leadership of all CHEP pallets operations globally. As a result, Dolph Westerbos, currently Group President for EMEA and Asia-Pacific, will leave Brambles after a short transition period. “Over recent years we have strengthened our partnerships with customers, diversified our range of products and services in pooling solutions and grown into new regions” Gorman stated.

“At the same time, we are developing into a more efficient, leaner, more focused and more integrated organization. In line with this evolution, the creation of a single leadership structure for the global Pallets segment will enable us to simplify

WAY OUT WEST February 2013 Page 3

Material Pricing and the Importance of Market Reports One of the top of mind issues at the 2013 WPA Annual Meeting was the issue of lumber pricing and availability. A number of panel members encouraged industry participants to take advantage of market reports to keep on top of the situation. One of the key market reports recommended is WPA-member Industrial Reporting’s Pallet Profile Weekly. There are also other note-worthy reports such as Random Lengths and Madison’s Lumber Reporter,

which provide data used in the pricing chart shown at right, updated weekly at Natural Resources Cana-da, a Canadian govern-ment website. To visit the free website, click here.

WAY OUT WEST February 2013 Page 4

Passing the Torch: Business Succession Involves Complex Tax, Legal, Financial and Emotional Issues

Don’t’ make the mistake of attempting to treat all of the children completely equally when it comes to succession planning. That was one of the messages from Charles A. (Clary) Redd at this years WPA Annual Meeting.

In a thought provoking presentation he walked attendees through the pitfalls and opportunities surrounding the issue of succession planning in a session entitled Passing theTorch without Dousing the Flame: Estate Planning for Closely Held Business Owners.

Clary introduced the dynamic cast of characters involved in such activities such as the owner, the spouse, and the children. When it comes to the people involved, a lot of communication and soul searching is involved to determine peoples wishes and aptitudes. Is the owner a control freak, or a coach and mentor? And what about the spouse? The spouse may or may not wish to be involved in operating the business, yet should have a voice in the process.

The children may or may not have the desire to carry on in the business, and equally important, may or may or may not have the ability to run the business. Then there is the issue to consider of insider versus outsider children, where some of the children will take over the business and manage it, whereas others will not. One of the keys to the estate planning process is structuring it so that that these groups of stakeholders are treated reasonably.

Clary stressed that there are complex legal, tax, financial and emotional issues involved, but with careful, cooperative planning, a successful transition to the next generation can be accomplished.

To view the slides of Clary’s

WPA presentation as well as

the other presentations at this

year’s Annual Meeting,

click here.

WAY OUT WEST February 2013 Page 6

CHEP Europe Has Lighter Environmental Impact Than Whitewood

Reusable or Light Duty Pallets, Says Report

A well organized reusable pallet system has a lighter impact than ad hoc reusable or single trip white wood systems, according to a new report. An independent study has confirmed CHEP’s pallet system in Europe has the lightest impact on the environment when compared with alternative pallet systems, namely white-wood returnable pallets and white-wood disposable pallets.

“This is a clear competitive advantage and reinforces our view that CHEP is the market leader in sustainability in our sector,” states CHEP Global Director of Sustainability, Dr. Juan José Freijo.

“We completed a comprehensive life-cycle assessment study for CHEP Europe, which covered CHEP pallet products and services. The assessment was performed by Brussels-based Intertek-RDC Environment, a leading environmental consultancy organization and has been independently peer reviewed* and for ISO 14044 certification.”

The life-cycle assessment study focused on CHEP Europe’s three key products: the Euro Pallet (1200x800mm), UK Pallet (1000x1200mm) and Half Pallet (600x800mm). Intertek-RDC evaluated the total environmental impact of the pallets over their entire life-cycle, from harvesting trees to end-of-life recycling.

The study results demonstrated that the CHEP pooling solution generates the lowest environmental impact** among the analyzed wooden pallet systems. CHEP’s intrinsic business benefits are key in achieving this environmental performance. These include use of certified wood, higher transport efficiency, lower losses and recycling at the end-of-life.

Dr. Freijo said: “We found that emissions and resource consumption when using CHEP’s pallet-pooling system are less than half than when using whitewood returnable pallets, and the waste generated is about 18 times lower than white-wood disposable pallets.

“The study enables us to provide CHEP customers with the comprehensive information they need from their suppliers to assess the total environmental footprint of packaging, transportation and delivery of their goods on a pallet in the European supply chain.

“The life-cycle assessment also shows us on which areas we need to focus in order to reduce our emissions further and therefore improve our own environmental footprint.”

In accordance with ISO 14044 methodology, a panel of three independent experts completed a critical review to verify ISO compliance of the life-cycle assessment and enhance its robustness. The panel comprised a life-cycle assessment expert from Solinnen, a logistics expert from CPV Associés (both of France) and a pallet expert from the European Federation of Wooden Pallet & Packaging Manufacturers (FEFPEB). The peer review panel appraised and validated the methodology, data capture, results and key conclusions.

WAY OUT WEST February 2013 Page 5

BC Log Export Restrictions Protested by U.S. Lumber Coalition

The U.S. Lumber Coalition is seriously concerned by the recent announcement of log export policy changes in British Columbia (BC), particularly an increase in the "fee in lieu of domestic manufacturing" applied to many log exports that will take effect on March 1. Log export restrictions have the effect of insulating BC lumber mills from world market prices for logs, which have increased significantly in recent years as China and other countries have increased their demand for North American logs. The recent announcement of measures to tighten log export restrictions on the BC Coast will allow BC lumber producers to pay even further below-market prices for their log inputs. "In effect, BC has increased the implicit subsidy from log export restrictions for BC Coast lumber mills," said Luke Brochu, Chairman of the Coalition and President of the family-run Pleasant River Lumber Company in Maine. "This gives BC Coast lumber mills a greater advantage in the U.S. market, at the expense of U.S. mills that pay full market price for their inputs," he explained. Logs harvested from public or private lands in BC must be advertised to local mills before they can be exported. If a local mill offers to pay the prevailing domestic log price – which can be much lower than the export price – for a particular log sort, export of that sort is prohibited. Further, even when permission to export is granted, a "fee in lieu of domestic manufacture" is assessed on logs harvested from public and some private land. This fee is often much greater than the price that BC charges to harvest standing timber on public land. Effective March 1, the "fee in lieu" on the BC Coast will be increased by 20 percent. "The Coalition has brought this matter to the attention of the United States government," Mr. Brochu stated. "We have asked them to raise this issue urgently with their Canadian counterparts, and we urge our government not to hesitate to defend U.S. rights under our trade agreement with Canada."

Increased Technology Can Pay Off for Pallet Makers

“I think technology is a key opportunity. Information technology is a great equalizer in the marketplace…also technology in improving efficiency of your mills,” stated Chuck Ray during the panel discussion at the 2013 WPA Annual Meeting. “Reduce headcount… Machinery is a way to do that. I preach about this. If a company has 25 employees it should have an industrial engineer on staff. Look for 60 or 80 thousand dollars to save a million a year. Put the right system in place and do it properly.” “One of the problems for smaller companies when they purchase new equipment is they never get the return they think they are going to get because they don’t really have professional assistance to make sure it is done right. You need someone on the inside to make sure things are designed in the right way. And they can help identify other opportunities to eliminate inefficiency. Think about that. Industrial engineers are coming out of school begging for jobs. They may be expensive relative to pallet builders but the return on investment is huge.” Chuck, a Penn State University economist, also gave a feature presentation at the event. Check out the presentation slides at the WPA website. The presentation is available as a .pdf file or with voiceover.

WAY OUT WEST February 2013 Page 7

News Roundup

(The headlines below are live links. Click on individual headlines to read the complete stories.)

Ball Corporation and Rehrig Bulk

Pooling Reach National Agreement

PECO Wins Over Watermelon

Growers

European Pallet Giant FHG

Rationalizes Production

Receiving a forwarded copy of Way Out West?

Why not get your own directly by dropping a line to

newsdesk@westernpallet.org

WAY OUT WEST February 2013 Page 8

Virginia Tech Offers Short Courses

The Center for Packaging and Unit Load Design at Virginia Tech is proud to announce the 2013 Pallet Design Short Course. The short course will be held at the beautiful Virginia Tech Campus in Blacksburg, VA March 13-14, 2013.

The short course is an excellent way to obtain essential knowledge about pallet design and selection and it is specifically recommended to wood pallet suppliers and sales professionals, professional responsible for pallet purchases, and to packaging engineers working with unit loads.

At the end of the short course, the attendees will

have a chance to visit the facilities of the Center for

Packaging and Unit Load Design and learn about the

more than four decades long innovation in pallet

design. More information about the short course can

be found at

http://unitload.vt.edu/education/continuing-education/.