The Spar Group plans to occupy a new R300m distribution warehouse in Sheffield Business Park, Philippi, Cape Town, by Christmas next year because it has outgrown its old centre in Montague Gardens.

The new centre will provide a platform for expected substantial growth of the new generation of SuperSpar, Spar and KwikSpar stores, as well as Spar's Tops and Build-IT outlets. It will supply 171 retail outlets.

Peter Hughes, CEO of the Durban-based Spar Group, said it had taken several years to find a suitable site for the new distribution centre in the Cape Town metropole.

Financial director Rodney Coe said sales were "coming through strongly". Spar, one of three leading grocery groups in the country, had increased market share nationally in the foods businesses over the past three six-monthly reporting periods, he said.

In the six months to March, the group increased net income 16,5% to R206,4m, from R177,2m a year earlier.

Once completed the 12,8ha Cape Town site will become the new regional headquarters of Spar in Western Cape. The nucleus will be a 33550m² state-of-the-art distribution centre for perishable and nonperishable goods. It will be about double the size of the Montague Gardens centre.

The new warehouse will have supply chain technologies such as radio frequency scanning technology and voice-activated stock picking. This technology, widely used elsewhere in the world, was introduced in SA at Spars' KwaZulu-Natal distribution centre and was later extended to its distribution centre in Boksburg.

Spar Western Cape MD Bill Brown said distributed business volumes had increased significantly in the past five years.

"We now have more than 19% of the measured food market in the Western Cape.

"We are currently distributing around 1,5-million cases of food, both dry and perishable, a month and the present distribution facility is struggling to cope with the volumes."

Contractors are busy with site preparation and earthworks.

The foundations for the new facility should go in early next year, and the project should be completed in December next year.

It should be fully operational by February 2008.

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge