Coles plans to build two new automated distribution centres

Coles has entered into a Heads of Agreement with Witron Australia, a subsidiary of Witron Logistik + Informatik GmbH (Witron), to develop two new automated ambient distribution centres for Coles over a five year period.

In an announcement by the company it was revealed that Coles is focused on modernising its supply chain through investing in technology and automation.

The company said the investment is expected to deliver lower supply chain costs and higher service levels, improved efficiency and stock availability in stores, safer working environments, and enhanced business competitiveness.

The total investment required to develop the two automated distribution centres will be managed within Coles’ overall capital expenditure budget by applying its established capital allocation practices but the company has has estimated net capital expenditure of $600 million to $800 million for FY2019 includes capital expenditure associated with the agreement for distribution centre automation.

Coles expects to recognise significant provisions of approximately $130 million to $150 million before tax in FY2019, relating to redundancies and lease exit costs for a number of existing distribution centres that will be closed over a five-year period.

This announcement comes alongside details that the Supreme Court of Western Australia has ordered a meeting (Scheme Meeting) of Wesfarmers shareholders be convened to vote on a scheme of arrangement for the proposed demerger of Coles.

Further details can be found on Wesfarmers website: http://www.wesfarmers.com.au/util/news-media/article/2018/10/05/wesfarmers’-demerger-of-coles.