Pallet pooling company Brambles (ASX: BXB), which produces the globally renowned blue wooden CHEP pallet, looks appears set to strengthen its hold on the Canadian market.
Recent news that one of North America's largest standardised industry pallet pools, the Canadian Pallet Council (CPC), is considering shutting down by the end of 2013 due to a continued loss of customers, including the recent loss of major Canadian retailer Loblaw, bodes well for CHEP Canada's business.
Brambles' success at taking its business model global is in stark contrast to a number of Australian firms that have tried to 'conquer the world'. Toll Holdings (ASX: TOL) is one example of a firm with a very mixed record from its overseas expansion efforts, with the recent foray into Japan proving particularly disastrous.
The proof is evident in both companies' shareholder returns. As the chart below shows, over the past five years Brambles has significantly outperformed the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) as its global roll-out strategy has continued successfully. Meanwhile Toll's shares have underperformed in line with its poorly executed expansion strategies.
Source: Google Finance
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Motley Fool contributor Tim McArthur owns shares in Toll Holdings.
