Brambles ditches Recall in restructure

Focus to be on pallets, crates and containers as non-core information management arm goes on the market

August 17, 2011

Logistics equipment firm Brambles will focus on its traditional pallets, reusable plastic crates (RPC) and containers pooling business as part of a reorganisation.

In so doing, it will divest its Recall information management business, with some estimates putting its value at about US$2 billion ($1.92 billion).

In support of the strategy, the company intends to spend US$550 million on stock over the next two years.

For pallets, Dolph Westerbos will become Group President, CHEP EMEA (Europe, Middle East, Africa) & Asia-Pacific, retaining responsibility for CHEP’s pallets business in EMEA and adding responsibility for Asia-Pacific. Westerbos will also assume responsibility for marketing throughout the global pallets business.

Peter Mackie will become Group President, CHEP Americas, assuming responsibility for the CHEP Americas pallets business and IFCO’s US-based Pallet Management Services business. Mackie will assume responsibility for operations and logistics throughout the global pallets business.

Brambles will manage its RPCs and contaners indedicated global business units.

RPCs Group President Karl Pohler, who joined the group when Brambles acquired IFCO, where he is CEO, will lead the former.

The containers businesses business unit will incorporate automotive, aviation and intermediate bulk containers and the Catalyst & Chemical Containers business.

Current CHEP Americas Group President Jim Ritchie will leave on August 31. CHEP Americas’ Senior Vice President, Finance, Scott Spivey, is Acting Group President, CHEP Americas, until 1 October 2011.

"These changes create a stronger strategic focus and accountability - for the delivery of growth and efficiencies in our pallets business, for driving strong growth in our RPCs business and for growing and investing in the future in our containers business," Brambles CEO Tom Gorman says.

Details of the shift in emphasis come as Brambles reported a net profit for 2010/11 of US471 million after one-off costs, up 3 percent, on revenue of US$4.67 billion, up 9 percent.

CHEP Asia-Pacific made a US$96.6 million operating profit, up 8 percent, on revenues of US$463.7 million, up 6 percent.

This was helped by insurance recoveries following the December 2010 and January 2011 flooding in Queensland, which made a positive contribution to profit in CHEP Australia.

"Brambles is in a strong position to deliver its strategy of creating a global pallet and container pooling business across a wider range of customer segments and geographies in the years ahead, as we diversify our range of products and services and continue to expand into fast-growing emerging markets," Gorman says.

"Although global economic conditions remain uncertain, in particular in many of our larger markets – including the USA, the UK, Australia and Spain – we continue to drive growth from converting customers to pooling and we expect pricing conditions to improve modestly in the year ahead."

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