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Lion announces plans to invest $15m on Christchurch CBD site

Lion has today announced plans to invest $15M on its Christchurch CBD site.

May 26, 2011

Lion has today announced plans to invest $15M on its Christchurch CBD site in response to the impact of the Christchurch earthquake on its Canterbury Brewery.

Lion will build a $15m state-of-the-art warehouse and distribution centre with the expectation that it will be at the Canterbury Brewery site (which is located inside the original cordoned-off CBD), as part of a $43M plan to cope with the production gap left by the badly damaged Canterbury Brewery.

“Thankfully none of our people working at the Brewery were injured in the earthquake, however the plant and equipment sustained extensive damage and we have been unable to brew beer since.” said Rory Glass, Acting Managing Director.

“While we are still working through the insurance and engineering implications of the damage at the site, it has become clear that the brewhouse and packaging hall are damaged beyond repair and we will not be able to brew in Christchurch in the foreseeable future.”

Mr Glass said the company recognises that the best way it can contribute immediately to the Christchurch recovery effort is to make decisions now.

“We want to provide certainty and safety to our people, to ensure continuity of supply to our customers and consumers, and to reinforce our ongoing commitment to Canterbury.

The decisions we are announcing today reflect the balance between our absolute commitment to doing the right thing for our people and maintaining our strong presence in Christchurch, with the reality that the St Asaph Street site cannot sustain a brewing operation for the foreseeable future.

It is very important to us that we maintain a strong presence and commitment to Christchurch. In the current circumstances this is the most pragmatic and decisive way we can do this” he said.

In addition to the $15m Christchurch warehouse and distribution centre, Lion will invest $20m to boost operating capacity at the Speight’s Brewery in Dunedin and $8M at “The Pride” in East Tamaki, Auckland to accommodate the transfer of production capability lost from Canterbury Brewery.

The central Christchurch warehouse and distribution centre will enable a more efficient and streamlined distribution service for Lion’s South Island customers. It will be built to meet the new earthquake codes and feature significant investment in new technology.

The Speight’s Brewery in Dunedin will be upgraded to assist in supply requirements across the South Island at a cost of $20m.

The $8m investment at The Pride in East Tamaki will enable the production of specialty beers like Guinness and Stella Artois Légère, previously brewed at the Canterbury Brewery.

Overall, the changes will see a reduction of 22 roles across our South Island business. We currently have approximately 28 vacancies across our wider operations business in NZ.

“We will be working closely with our Canterbury Brewery team to offer redeployment opportunities where possible, and comprehensive redundancy and support to those for whom redeployment is not possible.

We are very mindful of the impact that these decisions will have on our Christchurch people – who are already dealing with the ongoing challenges of life in the aftermath of February’s devastating events.” says Rory Glass. 

The rest of Lion’s Christchurch business – sales and retail – remain focused on meeting the needs of our customers and have been fully operational since shortly after the 22nd of February. We have relocated our sales and administration offices to safe premises in Christchurch and we continue to employ over 70 people across the Canterbury region.

Christchurch will continue to be our hub for the South Island where Lion has a deep and long history.

“We believe we have achieved the best possible outcome to ensure safety and certainty for our people, continuity of supply to our customers and consumers; and to demonstrate our commitment to the social and economic re-creation of Christchurch.” concluded Mr Glass.