Coles takes new step into warehousing future

By: Rob McKay


DCs shakeup in NSW and Queensland as automation gets wind in sails

Coles takes new step into warehousing future
Steven Cain

 

Coles Group has nailed down contracts with Witron Australia to develop two new automated ambient distribution centres, one each in Queensland and New South Wales.

Witron Australia is a subsidiary of Witron Logistik + Informatik GmbH, the German global leader in building automated DCs that aim to deliver improved cost efficiencies and product availability for customers.

Concurrently, Coles has also entered into agreements for lease catering for the development of the distribution centres at Redbank in south-west Brisbane with Goodman Group, and Kemps Creek in western Sydney, with a joint venture of Goodman and Brickworks Limited.

The term of each lease will be 20 years.

"The new automated distribution centres are intended to replace five existing ambient distribution centres over a five-year period," a Coles spokesperson tells ATN.

"They are currently located at Smeaton Grange, Goulburn, Eastern Creek NDC [all in NSW] and Forest Lake and Heathwood [both in Queensland]. "


Read how Coles flagged its DC automation strategy in October, here


The agreements with Witron, Goodman and Brickworks are subject to the "satisfaction of certain property related conditions precedent including development approvals".

 "With the signing of these important contracts, Coles is one step closer to implementing a key element of its supply chain modernisation strategy," Coles CEO Steven Cain says.

"This will provide a safer working environment for our team members, lower supply chain costs, enhance our overall business competitiveness and make life easier for our customers by having the right offer in the right location."

The total capital expenditure relating to Coles’ supply chain modernisation project for the two automated distribution centres is about $950 million over six years.

Coles also confirms it will recognise a pre-tax provision of $146 million in its 2019 interim result as a significant item, relating to lease exit costs and redundancies for existing distribution centres that will be closed over a five year period.

 

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