Diageo opens a $13 million logistics hub in Singapore

Filed in archive News on October 16, 2006

Diageo, the maker of Johnnie Walker whiskey and Guinness stout, has opened a $13 million (6.54m) logistics hub in Singapore to cut the time it takes for its alcoholic drinks to reach Asian markets.

The new center, according to AP Food Technology, set up with the Asian logistics group IDS, will allow the firm to introduce 'postponement', a process by which market-specific packaging and labeling can be added at the last minute to products shipped in from Europe before they reach their final destinations across Asia.

Diageo says it is the first to adopt postponement, commonly used by the electronics sector and some FMCG products, for the alcohol sector.

"Our business here is currently growing at 3 per cent ahead of the rest of the world, and we feel it is a market with a strong future," explained John Pollaers, managing director of Diageo Asia in an opening speech.

The center will handle 3.5 million cases of Diageo beverages in the first year, growing to 6 million cases next year and 8 million in subsequent years. It will allow Diageo to store inventory to the value of S$60 million and will cut the average time from production to point of sale to 1-3 weeks from the previous 8-10 weeks, claims the company.

Pollaers said the investment will also allow the company to be more flexible so that it can implement one-off initiatives such as seasonal promotions in a single market.

Diageo set up its Asia-Pacific regional headquarters in Singapore in January. It has seen rapid growth in new markets like China, where volumes of some of its whiskey brands increased by up to 75 per cent in the first half.