Pallet Manufacturing Industry Growth Expected Through 2032
2 Min Read
The global pallet market is expected to grow at a compound annual growth rate of 5.3%, putting the industry on track to hit $110 billion by 2032. A focus on sustainability, refurbishing used wood pallets, and the forecasted expansion of plastic pallets are both growth drivers in the pallet manufacturing industry. With four pallet industry projects completed in Q4 of 2023 alone, Apex Leaders is experienced in this interesting, diverse market.
The Growth of Plastic Sustainable Pallets
Nearly 5 billion wooden pallets are manufactured in the global pallet market each year. Of the 450-500 million pallets produced in the U.S., 93% are wood. Yet impressively, the plastic pallets segment is predicted to reach the highest growth rate of 7.4% from 2021 to 2028.
Plastic pallets are gaining prominence in the global pallet market as an alternative to traditional wood options. They offer increased durability for long-distance transportation compared to their wood counterparts. Large food, beverage, pharmaceutical, and chemical industries are showing particular interest in utilizing plastic pallets for their goods due to several factors:
- They’re engineered to handle heavy loads.
- They store products without the risk of pests or termites inhabiting the pallet.
- They don’t absorb moisture or rot.
- Manufacturers recycle them or melt them for other purposes to reduce waste.
With an interest in environmentally conscious material handling solutions coupled with the demand for sanitary, contamination-free and durable pallets, plastic pallets show a year-over-year projected growth rate and the potential for private equity investing.
Smoother Logistics with Plastic Pallets for International Shipping
The International Plant Protection Convention (IPPC) has created and enforces measures to ensure non-native, plant destroying pests are not transported with products in international trade. A key standard set is ISPM 15 for wood pallets. Products on wood pallets must be heat treated and stamped with a compliance marking or the product they carry will not be shipped, creating logistics challenges, wasted time and potential product loss.
During global transport, plastic pallets are ISPM 15 exempt and don’t require the same international regulatory compliance standards as wood pallets. Plastic pallets don’t host pests and therefore don’t require a pre-treatment or compliance stamps prior to shipping internationally.
Apex Leaders sources advisors to help PE firms conduct due diligence to pinpoint regulatory hurdles, to help understand regulations, and navigate trade within global industries.
Refurbishing Used Pallets Results in a Significant Revenue Stream
As businesses increasingly prioritize cost savings and environmental consciousness, the used pallet market is a lucrative and sustainable niche within the pallet manufacturing industry.
Already a trend in Europe with 63% being repaired and reused annually, it’s more cost effective to refurbish existing pallets compared to creating new, while being environmental stewards by creating less waste. Also, less resources go into refurbishing versus manufacturing new pallets.
Since most pallets are durable enough to be reusable, purchasing used or refurbished pallets is cost-effective and environmentally friendly. Interest in used pallets is compelling for private equity firms. The business of refurbishing and reselling used pallets is a strategic investment in an industry that continues to evolve and grow.
Looking for Niche Advisors in the Pallet Manufacturing Industry?
Apex advisors are well-positioned to guide private equity investors toward investment opportunities within the global pallet market. Contact us today to get connected with your custom advisor.