GCH launches RM290 mln distribution centre
Posted on January 21, 2010, Thursday
KUALA LUMPUR: The new GCH Distribution Centre located in Sepang, was designed, constructed and equipped for the GCH Retail Group (GCH Retail) at an estimated cost of RM 290 million.It is currently functioning as the central distribution hub for three of the Malaysian leading brands, namely, GIANT, GUARDIAN and COLD STORAGE.
The distribution centre has a built-up space of 450,000 sq ft, which is equivalent to four Giant Hypermarkets.
According to the regional director of East Asia, Dairy Farm Int, Datuk John Coyle, who is also the owner of the GCH Retail (Malaysia) Sdn Bhd, the multi-million riggit investment will give a boost to the growth of the brands and put them even further ahead of their competitors.
He explained that the state-of-the-art distribution centre, which has helped reduce logistic costs for its suppliers substantially, was a result of the accelerated turnaround time of delivery trucks to the warehouse by as much as 50 per cent.
"We plan to invest further in our supply chain infrastructure. We are looking at building a distribution centre for fresh produce in the northern region as well as in the southern region as part of our continuous efforts to help reduce costs for our suppliers and our company," said Coyle.
He told reporters at the recent opening that the company has allocated RM225 million to build three distribution centres in over a span of three years, whereby the distribution centres in the northern region and southern region will cost RM80 million each and another distribution centre planned in Simpang Pulai, Perak will cost another RM65 million.
He added that the investment in the distribution centre reflects GCH Retail's confidence in the Malaysian economy and projects the company's commitment to continue to invest in its brands as well as help the retail sector grow.
Coyle said, "GCH chose to build the facility at Sepang because of its strategic central location that is near both the cargo terminal at the Kuala Lumpur International Airport and the sea port at Port Klang which is easily accessible via the network of highways, which makes it the ideal logistics hub for the group."
GCH had also invested RM27 million for a Warehouse Management System that is integrated to the SAP system in its stores, which added up to its approximate expenditure of RM290 million for the distribution centre in Sepang.
During the recent official launch of the distribution here, the marketing director for GCH Retail, Ho Mun Hao said, "We have been exploring the market effectively thus far and we are seeing the results. In West Malaysia, we are quite established," and added that it also has a number of expansion plans in Kuching and Sibu.
He added that the nearest plans for East Malaysia would be the opening of the Giant Superstore in Kota Kinabalu, Sabah, early next month.
"The Giant to be opened in Kota Kinabalu will be a superstore, not a hypermarket concept. It will be roughly 25,000 sq ft in size compared with the bigger space needed for a hyperstore. It also means that the Giant will have things like clothes and so on," he related.
When quereied regarding GCH Retail's plans for further expansion in East Malaysia, Ho disclosed that with many discussions under progress, he can only reaffirm after it finalises its expansion plans in a meeting in East Malaysia by the end of this week.
He explained, "As of now, I can't really confirm any plans taking place in East Malaysia. But rest assured, there will be some kind of news from GCH as we will be finalising the expansion plans for East Malaysia by the end of this week, after we conclude a meeting we will be having there."
Also present at the GCH distribution centre to officiate the opening were Minister of Trade, Cooperatives and Consumerism, Dato' Sri Ismail Yaakob, Deputy Minister of Domestic Trade, Cooperatives and Consumerism, Dato' Tan Lian Hoe, Secretary-General in the Ministry of Domestic Trade, Cooperatives and Consumerism, Datuk Mohamad Zain Mohamad Dom, Jardine Matheson (Malaysia) Sdn Bhd chairman, Datuk Syed Tamim Ansari Mohamed, Gapurna Sdn Bhd managing director, Dato' Mohamad Salim Fateh Din as well as the heads of departments from the Ministry of Domestic Trade, Cooperatives and Consumerism and NGOs.
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Saturday January 23, 2010
GCH Retail distribution centres to help reduce costs
By SHARIDAN M.ALI
WHEN you own the Giant, Cold Storage and Guardian businesses in Malaysia, your every major move will have an impact on the local retail sector. Thus, people certainly sat up and paid attention when GCH Retail (M) Sdn Bhd announced this week that it would set up advanced distribution centres (DCs),
The company is investing more than RM500mil to build these DCs, which it says will lead to substantially lower logistics costs, and, in turn, cheaper goods at its retail outlets.
The GCH distribution centre in Bandar Baru Salak Tinggi, Sepang which was launched last Sunday. This is significant because pricing is a crucial battlefront for the modern trade channels, that is, hypermarkets, supermarkets, convenience stores and pharmacies.
GCH Retail, which has a 22% share of the country's modern trade market, has so far invested RM290mil in its DC hub in Sepang. The centre started operations in November. There are plans to add two satellite DCs and one fresh food DC at strategic locations this year, with investment amounting to RM260mil.
The new satellite DCs will be located in the northern and southern regions of Peninsular Malaysia.
They are expected to be completed in the fourth quarter of this year. The fresh food DC in Simpang Pulai, Perak, is expected to be completed in the third quarter.
Chief executive officer Datuk John Coyle says the newly operational Sepang DC reduces logistics costs for its suppliers substantially via 50% faster turnaround time of delivery truck at the warehouse.
"Usually, delivery trucks have to pick up and sent goods at different locations to be delivered to the stores. Via this bigger and more advanced distribution centre in Sepang, all loads and pickups are centralised in one location," he tells StarBizWeek.
Coyle says suppliers sending goods to the Sepang DC can expect their trucks or a 40-foot container to turn around in 50 minutes compared with 1.5 hours previously. The new handling equipment and trucks at the DC also help to speed up the process and add precision.
Moreover, Coyle adds, the DC in Sepang is equipped with an advanced warehouse management system (WMS), which is integrated with the company's stores system.
"This expedites the sorting of different goods in the DC to be sent to a particular store. Our stocking of goods also improves as the WMS tracks the sale of every product in the stores. This prevents out-of-stock scenarios," he says, adding that GCH Retail spends RM30mil of the total of RM290mil on WMS.
He adds that the new DC reduces the middlemen cost, thus further helping the company to lower the shelf price of goods.
"For our fresh food DC in Simpang Pulai, we plan to cut the cost of middlemen by going straight to the farms, with assistance from related agricultural government agencies" he says.
Coyle concedes that the investment in the new DCs does not reflect a lot of cost savings to GCH Retail per se but points out that it is more important that it will help modernise the trade sector in Malaysia.
"We can only benefit directly from the rebates given by our suppliers due to the faster turnaround time and from not losing any more sales opportunities. But we believe what is more far-reaching is to ensure an efficient supply chain that has always been the backbone of the retail business," he explains.
He says other hypermarket players are compelled to follow GCH Retail's lead with the DC initiative as they do not want to lose out in the price war.
"Our commitment is not only to create a retailing environment that's attractive for consumers and viable to traders, but also to set a standard that other retailers will benchmark against," he says.
Besides the WMS, another important feature of the Sepang DC, according to Coyle, is its built-up area of 450,000 sq ft – three times larger than its previous DC in Subang Jaya – which allows the DC to be the delivery point for 10,000 items or stock-keeping units.
"Its super-flat floor complements our reach trucks (loading devices similar to forklifts) that are also designed to precisely collect goods with the touch of a button.
"There is also a heavy-duty ventilation system that draws warm air in the DC into the open that ensures that the temperature is 20% to 30% lower than the temperature outside," he says.
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