Australia: Lion Nathan forms new logistic joint venture with Linfox as part of project invest
Lion Nathan announced October 18 the formation of a new logistics joint venture with Linfox Pty Ltd (Linfox), which will provide warehousing and distribution services to Lion Nathan in Australia.
Restructuring costs associated with the implementation of the new joint venture form part of a Project Invest, an initiative announced at the company’s interim results presentation.
The company also announced costs resulting from other FY06 Project Invest initiatives across the Group which will be reported in the 2006 results due for release on November 13 2006. Total charges for FY06 are $45.0 million pre-tax and $32.2 million on an after-tax basis.
As a key component of Project Invest, Lion Nathan has restructures its logistics operations in Australia to form a 50-50 joint venture with Linfox, effective 26th October 2006. The new business, called BevChain, will provide warehousing and distribution services to the total Loin Nathan group and other industry participants in Australia.
Ion Nathan CEO Rob Murray said: “We are delighted to be the partnering with Linfox which has demonstrated first class warehousing and distribution expertise, and a sound understanding of the evolving needs of our market and our consumers. This is an innovative solution combining Lion Nathan’s volume scale and consumer reach with the operational excellence of Linfox.”
“The placement of all of our volumes under the management of a single logistic supplier working trough a shared infrastructure will deliver economies of scale”, added Murray.
BevChain will have a standalone management team and Board of Directors and will operate at arms length of Lion Nathan, treating the Company’ as a client. BevChain will make a significant investment in warehousing and distribution infrastructure.
Rob Murray said: “BevChain will allow other industry participants to take advantage of an industry leading logistics platform, with broad reach and scale we expect BevChain’s offer to be very competitive for its customers.”
“This initiative represents a win for all stakeholders. The business model delivers commercial simplicity for the joint venture partners and a more efficient supply chain that will assist in mitigating the increasing cost pressures faced by industry participants.”
“Our customers will benefit from a consistent national approach lo logistics with built-in flexibility to meet changing customers’ requirements and more efficient delivery schedules,” Mr Murray continued.
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