MovingForward Together

Distribution Centre Staff

Moving to Hornby:

Construction is underwayWhat you need to know about the move.

What’s happening?Construction is now well under way on the new Ambient Hornby DC (Distribution Centre), a development that will comprise 60,000m2 of building and yard areas. Calder Stewart, our building contractor, is well established on site with work at present including:

Sewer and storm water pipe work

Data and power trenching

Realignment of security fencing

Preparation of new truck and staff car parking

Preparation of the new road entrance and temporary alternate site exit

Off site tilt slab and steel works construction underway

Communication to transport companies around traffic flow disruption

Project team

To ensure we streamline the design, build and implementation of this new state of the art DC we have assembled a very experienced project team that has been together for 18 months planning towards the final completion of this DC in 2014.

The physical building design phase is complete and now that we are into construction of the DC this team continues to plan and coordinate the many other tasks that will require completion inclusive of:

The Project team consists of:

Jannene Cummings – Project Manager John Mullins – Supply Chain and Logistics Kris Lancaster – Supply Chain and Logistics Tony Ziolo – Supply Chain and Logistics Jeff Cox – Supply Chain and Logistics Scott Fairweather – Supply Chain and Logistics Grant Duncan – Property Project Management Gareth Weatherston – Supply Chain and Logistics

Haydon Thom – Supply Chain and Logistics David Pawson – Procurement Gordon McCoy - IT Gary Cowens - IT Glen Blake – IT Tim Donaldson – Retail Murray Trim – Finance

Internal racking design

Repack and small bulk pick module

MHE requirements

Auto pallet wrapping

Site transition requirement (Papanui Hornby).

IT and data infrastructure

Inventory planning

Battery charging rooms

Staff facilities

Staff communication

Tony Ziolo, Papanui DC Manager, has completed over 200 one on one meetings with our Papanui staff to fully explain the relocation requirements of Papanui staff across to Hornby in 2014. These meetings provided staff the opportunity to:

Ask any questions about the relocation of the Papanui DC operation to the new Hornby DC

To get an update on new technologies to be included on the new site, i.e. repack/small bulk pick module

To understand the public transport opportunities to the new site for staff

To advise their intentions to relocate as this information is important for planning requirements towards the merge of the Papanui DC and the Hornby Ambient DC operation. It is pleasing to report the majority of staff have confirmed their intentions to transition to the Hornby DC during 2014

Bulk Storage Racking

This new racking will be similar in design to the recent new racking installed into the Hornby Ambient and Temperature Controlled DCs. The racking height (top beam) will be 10.7m allowing for 7 pallet slots inclusive of the floor as illustrated alongside: (Refer full site plan on display)

Battery Management/Handling

The DC will have a special room and multi level storage unit for the storage, charging and rotation of batteries for our forklifts and order pickers. This area will improve safety around the handling of batteries, reducing time of battery charging, improved machinery utilisation and smarter use of space. This

system will also monitor the efficient charging of batteries along with reporting of battery condition for the 150 batteries that will rotate through this facility per week.

Semi-Automatic Pallet Wrapping

We propose to install a bank of semi-automatic pallet wrappers which will provide benefits in the areas of reduction of wrapping film use, improved standard of pallet wrapping and the enhanced health & safety for order pickers.

Storage Rackingg g

Face plate 125 mm Total of 2140 bays

Racking Height 10.7m

Racking Protection

Pallet Capacity 29,000

Pick path 3.6km

Storage Mesh top 2 levels

Why we are moving fromPapanui to Hornby.

Papanui

Size Papanui is too small, with the existing DC and offices covering 19,000 sq metres.

ExpansionPapanui is landlocked and can’t expand any further.

Storage CapacityPapanui DC has low racking height and is unable to maximize storage capacity that a modern DC can provide.

Product CentralisationPapanui cannot accommodate the requirement for further product centralisation. This has resulted in the duplication of slow moving products in all three DCs (Papanui, Hornby & Dunedin).

Access (Delivery)Papanui has many traffic congestion and access problems off Main North Rd and Northcote Rd. This problem will only deteriorate further.

Working EnvironmentPapanui’s older style DC design was built in 1970 with further additions in 1989 and 1999.

Our goal is to be the most efficient and effective Distribution Centre in New Zealand.

Hornby

Size Hornby, with the new and existing DC, will cover 46,000 sq metres.

ExpansionThe additional 13 hectares of land at the Hornby Site allows more room for existing and future growth over the next 30 years.

Storage CapacityHornby would have the capacity for 45,000 pallets stored in selective pallet racking to a height of 11 metres.

Product CentralisationHornby will act as the distribution point for the full range of grocery, liquor, tobacco and general merchandise product. Slow moving products and Banner Group repack picking will be centralised to one single site.

Access (Delivery)Hornby has easy access to State Highway’s north and south, the new southern motorway, plus the Port of Lyttleton.

Working EnvironmentAt Hornby we have the capacity to construct a new modern DC inclusive of high stud, energy efficiencies, covered dock areas, larger yard areas, and modern staff facilities.

Oct 2012:Site ground preperation begins

20132014

May 2013:Construction of thenew site begins

Mar 2014:Construction of thenew site is completed

Mar 2014-Jun 2014:Papanui operationsand sta�ng combineswith new Hornby site

Important Questions:What about the Dunedin DC?Foodstuffs is 100% committed to the Dunedin DC and recognises its on–going importance as a Regional Distribution Centre (RDC).

Slow moving products will be centralised to Hornby with volume products gaining a sharper focus.

Banner group repack picking will also be centralised to Hornby mid 2014.

What will happen to the Papanui DC?The land and building will be sold but Head Office, Trents Wholesale and Murdoch Manufacturing will remain at the Papanui site.

Where to from here?Further information is coming soon.

You may have questions, comments or concerns. We will be sure to keep you up to date on all developments as the project unfolds in greater detail.

Pro

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Tim

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*dates given are approximate and depend on local body consents

Oct 2012:Site ground preperation begins

20132014

May 2013:Construction of thenew site begins

Mar 2014:Construction of thenew site is completed

Mar 2014-Jun 2014:Papanui operationsand sta�ng combineswith new Hornby site

Important Questions:We want to hear from you.

We will be inviting your involvement in the process in 2013 and especially the Papanui DC transition to Hornby 2014. This will include attending to your questions, concerns and, most importantly, suggestions. In the mean time, be sure to contact your shift manager or DC Management if you have any further questions.

Our SuppliersOur procurement team in conjunction with our suppliers will be tasked with managing the stock build into the new Hornby DC that we estimate will commence first quarter 2014. Our planning will be to set up stock levels in the new Hornby DC and pick to zero the existing stock holdings in the Papanui DC. Our Papanui DC on any given day holds approximately 13,000 pallets or 370,000 cartons of inventory and it is our intention to minimise the volume of inventory we will require to move across to Hornby at some stage.

Our WMS will handle the running down of stock (per sku) at Papanui DC prior to flicking supply over to the new Hornby DC. We will be communicating with our supplier base in more detail as to how we plan to manage the transition of Inventory requirements between the old and the new DC’s. We are very aware of the magnitude of this inventory transition and the need to ensure we maintain the expected service levels to our banner group retail members.

*dates given are approximate and depend on local body consents

Estimated Timeframe May 2013: Construction of the Hornby site will begin.

Mar 2014: Construction is completed.

Mar - Jun: Papanui operations and staffing 2014 combines with Hornby site. (Transition Plan)

New DC Extension

Back in 1970! Foodstuffs in Christchurch are Building a New Warehouse

Early next April the main Four Square

warehouse which has been situated in

Moorhouse Avenue for many years will close

down (having been sold to an investment

company) and operations will commence from

the new 120,000 square foot warehouse now

being erected on the Main North Road and

expected to cost $750,000. When completed it

will be the second largest food warehouse in

the country.

Built on 13 1/2 acres, there is plenty of room to expand to three times its present size and

still have plenty of room for parking – bonus for staff.

Fire prevention facilities make it necessary to construct a water reservoir and it has been

decided to build this in the form of a swimming pool for the staff. The building will have

104,000 sq ft on the ground floor, with a stud of 20ft and the roof rising to 35ft in the middle

allowing for stacking of goods by forklift.

The administration offices will occupy the second story of 16,000 sq ft and the area of land

fronting the Main North Road will be landscaped and laid out in lawns and shrubs.

NZ Grocergram, May – August 1970John Mullins - General Manager Supply Chain

30th May 2013