Blackwoods Paykels Invests $5m In Distribution

Media Release
November 2009

Blackwoods Paykels Invests $5 Million In New Distribution Centre, IT Platform And Retail Model To Meet Industry Demand Over Next Decade

The leading industrial and engineering supply company Blackwoods Paykels has recently funnelled almost $5 million into its business model. The investment included the fit-out of the new state-of-the-art Highbrook premises, including a new distribution centre, manufacturing plant and flagship retail outlet to meet the increasing demand from growth sectors such as infrastructure, oil and gas, food production and other local industry as the economy picks up.

Wesfarmers Industrial and Safety New Zealand NZ (WISNZ) General Manager Mike Taylor says the total outlay for recent developments, including the fit-out of the purpose-built distribution centre, represents a 10-year investment to re-engineer the business: “Is geared towards building quality of service and market share so we come out of the recession as the clear leader in our sector.”

The re-engineering also includes expenditure on the upgrade of the national branch network, in preparation for the expansion of the new retail model.

The recent merging of the Blackwoods Paykels and Protector Safety branches into a single offering is beginning to hit a nerve with segments of loyal customers, prompting several areas of revenue growth in July-September quarter. Both brands are owned by WISNZ.

“We currently have a customer overlap of just 25% between the two brands, and combining the product range allows us to serve all bases better and take advantage of the many cross-selling opportunities,” Blackwoods Paykels National Manager Paul Watson said.

“The response from the market to this new retail offering suggests to us that we’re meeting a need, and we’re looking forward to completing the roll-out of our new national network as part of this investment plan.”

A single IT platform was within the company’s recent investment expenditure, which enables customers to buy products across the Blackwoods Paykels and Protector Safety range on one account, and now permits the automation of purchasing via a combined web portal or direct EDI relationship.

Mr Watson said industries’ operational expenditure was starting to pick up, but capital expenditure continued to be subdued: Blackwoods Paykels’ investment is aimed in the first instance at those industries whose capex is on the increase. “There are notable areas of growth –new dairy plants are being constructed, and meatworks operations are picking up again after the drought.”

Blackwoods Paykels is also competing for some of the major current infrastructure projects in the areas of petrochemical, coal and roading, among others.

Manukau Mayor Len Brown, who is speaking at the official launch of the new building on 3 November, said, “To invest nearly $5 million in our city, at a time when it is needed, is significant. We are going through challenging times, so to have a major multinational company like Blackwoods Paykels making a long-term investment to service the industrial and engineering sectors is a positive signal as we continue to strengthen the economy.”

Additional Facts

• The new Highbrook facility consolidates five former sites into one
• Staff on the Highbrook site totals 78; across the business, Blackwoods Paykels
• Total footprint of 6,780sqm:
o Warehouse/manufacturing 4,500sqm
o Showroom/retail outlet 690sqm
o Office/amenities 765sqm
• The value of stock held at the Highbrook distribution centre is $9 million
• The distribution centre has approximately 22,000 stock-keeping units at any one time, and 25,000 locations
• The new layout of the distribution centre is by activity rather than product group, increasing efficiency, reducing errors and freight costs (also contributing to cost reduction is the new practice of zone printing and packing on a single packing slip)

About Blackwoods Paykels
Blackwoods Paykels formed in July 2004 with the merging of Blackwoods NZ and Paykels by parent company Wesfarmers Industrial and Safety NZ (WISNZ). Blackwoods Paykels offers customers unparalleled experience in industrial and engineering supply, result of the extensive history that both Blackwoods NZ and Paykels have within this field.

The Blackwoods Paykels range features but is not limited to hose and fittings, welding, tools, safety, abrasives, power transmission and conveyor products. The product offering is supported by the backup of key vendors and our own team of technical product specialists.

The branch network now includes 19 branches across all major cities and towns in New Zealand.

About Protector Safety
Protector Safety has provided protective equipment and expertise to New Zealand industry for over 40 years. Through exceptional people, products and services and a nationwide coverage of 22 outlets, Protector Safety provides value for customers large and small. The company holds a number of sole and preferred supplier contracts with some of New Zealand’s largest manufacturers and producers. Protector Safety is involved in a joint venture operation to supply, launder and maintain turnout apparel for the New Zealand Fire Service.

About Wesfarmers Industrial and Safety New Zealand
WISNZ is New Zealand’s largest and leading industrial distribution company. The company operates through five independent business units: Blackwoods Paykels, NZ Safety, Protector Safety, Packaging House and Safety Source. Activities are centred in three key industrial market segments:
• Personal protective equipment, work apparel and related safety products,
• Industrial packaging, food service and hygiene products,
• Maintenance repair and operating consumables (MRO)

WIS NZ operates throughout New Zealand and undertakes some exports to Pacific Rim and some European countries. The company operates through a network of 75 branches and three manufacturing operations, and employs approximately 700 people. For the year ending June 2008, total sales revenue was NZ$251 million and net profit before tax was NZ$6.8 million.

ENDS

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