Uses for recycled plastics are an ever-growing component of our world today. Consider the fact that more than 2.4 billion pounds of plastic bottles were recycled in 2008. That’s just plastic bottles and doesn’t account for all the individuals and companies that are conscious enough to recycle all plastic wastes and materials.
Although the number of bottles recycled may seem a bit staggering, the fact remains that, while volumes continue to increase each year, the recycle rate remains steady around 30%.
New Providence, New Jersey-based Axion International Holdings Inc. (OTCBB:AXIH) has built its company around composite building products manufactured from 100% recycled plastic; and business is good. The Company Recycled Structural Composite (RSC) products are used in real-world applications for marine pilings, bridges and railway ties, to name a few.
One-hundred-percent green and made in the USA, the manufacturing of the products produces virtually no waste as any scraps during production are simply returned to beginning stages and recycled into new products. RSC fills the voids left in traditional building materials as it installs much quicker than concrete, is lighter than steel and, unlike wood, is virtually impervious to the elements of weather. Additionally, RSC won’t rust, splinter, crumble, rot, absorb moisture or leach toxic chemicals into the environment. It’s a win-win product for the environment and consumer.
Today, Axiom announced a milestone contract with a Class 1 Railroad for the purchase of its RSC railroad ties. The Railroad Company, which is one of the largest in North America, has agreed to purchase a minimum of $5 million per year of Axion’s innovative composite railroad ties for the next three years, putting the value of the contract at a minimum of $15 million.
This order is the largest order to date for the railroad ties. As the railroad industry is looking for alternatives to the wood and concrete materials that have been a long-time staple in the business, but lack true longevity, a contract of this magnitude could be a catalyst for additional orders as it shows a strong acceptance of the RSC product that will primarily be used initially to replace dilapidated wood ties.
Railroad maintenance accounts for the purchase of 20 million railroad ties each year. While this large order is a major milestone, it could just now be the opening of the window of opportunity into a very large industry with virtually no competition.
The New Year has been kind to shares of AXIH as, since the beginning of January the price per share has climbed from under one dollar to peak at $2.10 a couple weeks ago and is now consolidating in the area of $1.80. Holding this area is reinforcing the resistance at $1.85 and also the new support that is setting up at $1.75. Resistance won’t come into play again at this point on any move upward until the old highs are reached.
It’s clear that globally there is a major initiative in effect to reduce our carbon footprint on the planet. Recycling is spearheading the push for obvious reasons while manufactured products are continually evolving to reduce the impact on the world’s forests and limited resources. The business model and products that fuel revenues for Axion International, Inc. are cutting-edge and appear to be garnering the attention of not only investors, but major players in some large industries as well. Due diligence on this company is encouraged.
