Operator: We’ll take our next question from [Colin McBurney].
Unidentified Analyst : I don’t call into the earnings calls, but there were a few questions that would be helpful. I guess one like a — maybe like at a very high-level. Can you just talk about like, how you think about like how many plastic pallets are made in the U.S. per year, and then like how many Greystone makes? And then just getting like a — I mean, are you guys kind of biggest plastic pallet manufacturer in the country? And then if you could also just touch on like international competition, whether it’s just too expensive to ship them, but yes, just kind of the high-level in the industry.
Warren Kruger: Well, there, I’ll give you just real high statistical numbers. There are 2 billion pallets in America at any given time right now just floating around, whether that’s wood or plastic, metal, whatever it is. And probably each year, 700 million to 800 million go in the system. And so of that 700 million to 800 million, if we’re putting out 3 million pallets a year, you cans see that still 90% of those are wood. Rehrig Pacific is a big plastic pallet manufacturer, ORBIS is a big plastic pallet manufacturer. There are — Cabka is another one that uses diaper scrap that make their products. So I would say that the opportunities for growth on the plastic pallet side are insatiable. And it’s just — it’s time and money.
That’s what all it is, because people used to say, I just can’t afford it. And now what we’re starting to hear is like, we’ve got to get away from wood. I can’t tell you in the last three weeks I’ve heard that it — I’ve heard it at a customer outside of Atlanta, two customers outside of Atlanta. They just have to get out of it. Now, a lot of people are trying to figure out how to do it in their own closed loops so that they can capture the pallet because it is an asset, a plastic pallet. If it costs $45 to $65, that’s an asset. And it’s — you send it off to a customer and now you’re relying on the customer to get back to you. So that’s why people turn to pallet leasing, but they’re also now trying to figure out how to do their own lanes and do it in a circular fashion so they can own their own product and create their own small pools.
I don’t know if that helped at all, Colin.
Unidentified Analyst: Yes. That’s great. And then, do you face international competition for plastic pallets, or is the shipping cost just too high that it doesn’t — you can’t adjust price and making them booming in Asia? I mean maybe you can make them in Mexico. I think it was North America production. I think you guys said that…
Warren Kruger: We have produced in Mexico. We actually have a couple of tools down in Mexico, right now. And we have — we just got a purchase order, we did from Mexico. So we are getting some out of Mexico. I do know PTM is a large manufacturer down in Mexico. We know those guys. We believe that in a competitive world, those pilots coming from China. It is unclear when you are going to get that product. It is unclear. And the transportation costs, level of playing field dramatically. And when we have inventory and someone calls us and we say, ”We can ship that. We will ship that out next Monday.” It matters. And, of course, we do everything Applebee — Bettendorf of Iowa or Applebee, our plant in Mexico, just because we want others to shoulder the burden of transportation costs.
But I would say, I don’t really concern myself with the Chinese market. As I described, it’s unstable in terms of when you are going to get those products. And then it even levels playing field.
Unidentified Analyst: Got it. Great. And then in terms of Rehrig and ORBIS, how would you see — you said you are doing about 3 million new pallets per year. I guess, Rehrig and ORBIS would you say they’re like similar or…?
