BRAMBLES rival iGPS is expected to announce next week that it will take on 70 per cent of Kraft's pallet requirements in the US, on top of 100 per cent of General Mills¿s pallet needs.

Given that Kraft is the second-biggest Brambles customer in the US, after Procter & Gamble, this would be a big blow to the company.

Granted iGPS has only five million pallets in the US, against 80 million for Brambles, but if it is expanding at the rate of five million a year and taking big customers from Brambles, it’s hard to write it off as a nobody.

Brambles’s Mike Ihlein is raising two concerns about iGPS, questioning its sustainability on economic and environmental grounds.

He may prove to be prescient, but if the Deca-BDE fire retardant used by iGPS in its pallets is so dangerous, then why is Kraft, one of the biggest food companies in the world, buying the stuff?

Now, some have said iGPS is winning “small” clients from Brambles, which one suggests is not exactly sustainable if, as expected, the Kraft news is unveiled next week.

At some point, network economics kicks in and against Brambles.

Ihlein has ramped up customer focus at the once arrogant company and it would seem he needs to do so in a hurry before the irritant becomes a serious rival.

Peabody’s welcome return

NEWS that Terry Peabody will hit the bourse again soon as Transpacific prepares to open itself for trading is, of course, welcome because he is one of the great entrepreneurs.

Already, he is spruiking new acquisitions, which, you would think, would be best left unsaid until he at least gets the new venture settled.

On Goldman Sachs’s numbers, the shares on issue increase from 311 million to 1026 million, which equates roughly to a 55 per cent dilution of earnings.

Yes, gearing will be cut from 60 per cent to 42 per cent, but the company will post a second-half loss of $225 million before tax, so some investor caution would be in order.

Just how Peabody works with Warburg Pincus will be of interest, as both will have the same equity control of the company, assuming the deal is approved by the bankers.