Sydney pallet supplier experiences growth despite automotive setback

Logistics company Brambles says it has experienced some revenue losses in the Asia Pacific region following the closure of the automotive manufacturing sector in Australia.

According to its 2017 end-of-year financial review, the Sydney-based supply-chain specialist recorded five per cent growth in sales revenue, driven largely by “improved sales momentum” in US pallets, it said, as well as growth in Europe and Latin America.

This is despite a revenue decrease in the pallet manufacturer Chep Asia-Pacific, which dropped by five per cent to US$238.1 million (A$300 million).

Brambles’ report, which recorded overall growth, states that the dip was due to Chep losing a large reusable plastic crate (RPC) contract – and the wind-down of the Australian automotive assembly industry.

“We delivered a return to positive underlying profit growth and strong revenue in the first half,” said Brambles CEO Graham Chipchase.

“We saw improved volume growth in North America and continued momentum in our European operations, in line with good economic growth in these regions.

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“I was pleased to see a strengthening of the top line in North America with volume growth returning to historic levels. We saw an expansion with both new and existing customers, notably in the beverage and grocery sectors.

“We however continue to face structural cost challenges partly due to changes in commercial arrangements which are increasing transport and handling costs.”

The impact of these changes was especially evident in the first half due to accelerating transport and other cost inflation, he continued.

“Our teams are implementing a number of mitigating actions including increased plant automation and other commercial initiatives,” Chipchase said.

“As the invisible backbone of the supply chain, Brambles has a unique insight into the way the world now makes, moves and sells goods.

“We know that our customers are under cost pressure, so we are seeking to collaborate with them – drawing on the depth of our global operations to offer insights into how they can take costs out of their operations.”

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