Another contract win by RM2 International (RM2:AIM) is good reason to follow director buying at the pallet manufacturer.

The £208 million cap’s chairman Ian Molson snapped up £540,000 worth of stock following the announcement on 2 March that paints and coatings company PPG Industries (PPG:NYSE) has agreed to use its BLOCKPal pallets.

The deployment, which will take place in stages across various business units and geographies, starts immediately and is expected to exceed 250,000 pallets.

This follows two major deals signed with Nestle (NESN:TSX) and an unnamed US print company on 15 December 2014. RM2 recently told Shares these contracts are progressing well and could expand.

Businesses are increasingly recognising the strength, environmental and cost advantages BLOCKPal has over traditional pallets. PPG’s executive vice president Viktoras Sekmakas says the pallet will improve its efficiencies and help it to achieve its sustainability mandate.

The product, which is made of a fibreglass and resin composite, can achieve 100 cycles of use before its first failure and it can be repaired. Only 15% of traditional pallets achieve 20 or more cycles.

RM2’s Canadian facility is expected to be operating at full capacity by the end of 2015, which will enable it to take advantage of the predicted 4% to 5% annual growth in the global rental pallet market.

At 64p we see plenty of room for growth.

THE TRADE

Buyer: Ian Molson, chairman

Consideration: £540,000

No. of shares bought: 900,000

Subsequent holding: 9,400,000 (2.9%)