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Fit-out Project Equips Giant Maersk Warehouse

Posted on by David Priestman

Glencar, a leading UK construction company that was recently ranked amongst Europe’s fastest growing businesses, has today announced that it has been appointed by Maersk, the Danish shipping and logistics company to undertake comprehensive fit-out works at Mammoth 602, a 602,000 sq.ft warehouse development situated at GLP’s G-Park Doncaster, South Yorkshire development that it has recently occupied.

The £12M project will comprise of the fit out of the existing office areas to category A standard, warehouse high level services and minor external works alterations. Warehouse area fit-out includes lighting, sprinklers including works associated, frost protection, fire alarm and small power.

Works started at the beginning of February are expected to be complete at end of the September 2023. G-Park Doncaster is situated in the logistics capital of the North, just 6 miles from the centre of Doncaster, providing easy access to all parts of the UK and mainland Europe via its central position, along with a vast skilled workforce.

Commenting on the appointment Tom Kersley, Glencar Commercial Director said: “Mammoth 602 is an incredible development and the largest such fit-out project Glencar have been awarded to date since establishing our new special projects division so we are suitably delighted. The specialist knowledge and expertise we have built our name on within the Industrial & Logistics lends itself perfectly to support the needs of a growing number of occupiers requiring specialist fit-out and enabling works. We look forward to expanding our offering in the face of increasing demand. We also look forward to working with the team at Maersk and delivering to their exacting needs”.

The unit which totals 602,000 sq ft was built by leading logistics developer GLP and is the largest and most sustainable logistics building in the North of England.

Mammoth 602 is a strong example of GLP’s commitment to sustainability across its developments. It is GLP’s third building to be net zero carbon for construction, in line with the UKGBC framework, and is part of the Planet Mark accreditation scheme which helps to further reduce the carbon footprint for the occupier.

The development benefits from best-in-class specification that is built for logistics, including two 50m service yards, 20m clear internal height, 60 dock levellers, 16 large dock levellers, 24 level access and 4 van level access doors with visibility from the M18. There is also 28,762 SQ FT of office space within the building, 217 HGV parking spaces, and 372 car park spaces.

Glencar Construction was established in 2015 with the aim of providing high quality, agile and efficient construction services, primarily to the industrial, logistics, distribution manufacturing, life science and pharmaceutical sectors. Glencar’s co-founders are industry experts, and they are supported by a dedicated team who have gained a wealth of specialist experience over many years in the sector.

European Logistics Footprint Strenghtened

Posted on by Keith McKinley

Hines, a global real estate investment, development, and property manager, has acquired five logistics assets across three separate transactions from different vendors throughout the UK, Spain, and The Netherlands on behalf of its Hines European Property Partners (HEPP) core-plus fund.

In the current macro-economic climate, investor appetite for high quality logistics assets remains healthy, backed by strong occupier demand and robust operating fundamentals. The locations of the assets are strong, with the majority of the assets in The Netherlands situated adjacent to Schiphol Airport, the Spanish asset is five minutes from Terminal 2 at Aeropuerto Josep Tarradellas Barcelona-El Prat, and the UK asset is located in Warrington in an urban location, all benefiting from superior transportation links.

Consistent with Hines’ value-focused logistics acquisition strategy, in addition to the high-quality locations, the five assets are highly functional for the needs of their current and future occupiers and were acquired at an attractive capital value basis, reflective of the current market environment, and at a material discount to replacement cost. All of the assets are leased in their entirety, with a weighted average unexpired lease term of approximately 7.5 years.

Last year Hines completed approximately €1.4 billion of logistics transactions across Europe, and currently has approximately 744,000 square metres of logistics assets under construction throughout Europe including the Czech Republic, France, Germany, Italy, Poland, the Netherlands, Spain and the UK, increasing its logistics assets under management and development in Europe to approximately €3.2 billion1.

Jorge Duarte, fund manager of HEPP at Hines, said: “These acquisitions reflect our value and income-focused logistics aggregation strategy to carefully pinpoint well located assets within Europe’s most dynamic regions, at attractive prices, particularly in the context of the current market environment. We remain focused on acquiring attractively priced income producing assets throughout Europe, which we can add value over time through proactive asset management and a focus on ESG.”

Last Mile Logistics Strategy Expanded

Posted on by David Priestman

PineBridge Benson Elliot, a UK-based pan-European real estate fund manager, and their JV Partner, Evo Industrial, have acquired two further sites, under their strategy, with Evo Industrial to deliver last mile logistics in and around London and key regional markets in the UK. The two sites are a 4-acre site in Woodford, East London and a 2.2-acre site in Enfield, North London

The Woodford site, acquired off-market, is well located to operate as a multi-let last mile logistics facility, given the area’s connectivity to central London, and the north east sector of the M25, with immediate access to the M11 and North Circular. The site is currently vacant with existing planning consent for industrial use; with new proposals set to be brought forward to construct 6 units across ranging from 8,220-sf to 26,430 sq. ft.

The Enfield site is equally well-positioned within an established logistics and distribution location in North London. The site is within minutes of the M25, A10 and North Circular, providing easy connections into Central London and the surrounding area. The plan is to develop a 72,000 sq. ft. warehouse unit. As with all Evo Industrial schemes, both sites will target BREEAM Excellent and be net zero carbon (regulated, in operation).

The Evo Industrial platform is a multi-let urban logistics aggregation strategy targeting a 1m+ sq ft portfolio in partnership with seasoned industrial development managers Evo Industrial (“Evo”), led by Don Bailey and Adam Courtenay. Evo will provide day-to-day project and asset management for the project. The Woodford acquisition follows the purchase of an eight-acre prime last mile logistics site in Leyton, East London, in March 2022.

George MacKinnon (pictured), Managing Director at PineBridge Benson Elliot, said, “Robust enquiry levels for well-located, environmentally sustainable and operationally sound logistics assets combined with a dwindling number of sites in Central London continues to underpin the strategy with Evo. We believe both the Woodford and Enfield sites are well placed to deliver best in class buildings which will appeal to a variety of occupiers with modern, well specified space.”

Adam Courtenay, Co-Founder of Evo Industrial said “These new acquisitions demonstrate our ability to identify, analyse and secure opportunities to grow the JV with PineBridge Benson Elliot and, as a team, to transact swiftly and effectively on both on market and off market opportunities. Along with our other schemes at Poyle, Erith, Warrington and Corby, these represent a material and positive addition to the track record of Evo and PineBridge Benson Elliot in this sector.”

PineBridge Benson Elliot is a pan-European real estate private equity specialist with two decades of investment experience, deep market knowledge and in-house operational expertise. As of 31 December 2021, PineBridge Benson Elliot manages US$ 3.1 billion in AUM. Founded in 2005 as Benson Elliot Capital Management, the firm was acquired in December 2020 by PineBridge Investments, a private, global asset manager focused on active, high-conviction investing. As of 31 December 2022, the firm managed US$143.1 billion across global asset classes for sophisticated investors around the world.

Senior Appointment for Warehousing Firm

Posted on by David Priestman

Big Box Group UK is pleased to announce the appointment of Stuart Rathbone to the role of Buildings Division Lead, reporting to Managing Director, Iain Gillard.

Stuart, pictured, brings extensive managerial experience from senior industry roles incorporating sales, operations and project management. This experience, which includes the delivery of one hundred successful projects in under three years, allied with a wealth of technical knowledge, will help Stuart to develop the expertise Big Box Buildings offers.

Big Box Buildings provide both temporary and permanent structures. The buildings division works closely alongside Big Box Intralogistics to provide racking and mezzanine, whilst incorporating the expertise of Big Box Automation.

Commenting on his new role, Stuart said, “My immediate priorities are to use my experience and knowledge to underpin technical expertise within the buildings division, introduce protocols and set up instinctive systems that the team can pick up and easily manage. If one benefits, we all benefit. This is a rapidly expanding sector and I’m excited to be a part of such a dynamic company with a big future.”

Commenting on his appointment, Big Box Group Managing Director, Iain Gillard said, “We are constantly striving to attract and retain outstanding talent and Stuart’s appointment marks an important milestone on our journey. It reinforces the experience and expertise we are building across our major operational areas, contributing a wealth of skill and experience that will help grow the company.”

Second Phase of Derby Development Announced

Posted on by Keith McKinley

St. Modwen Logistics, one of the UK’s leading logistics developers and managers and a Blackstone portfolio company, has invested almost £60m to develop an additional c. 350,000 sq ft of new warehouse space at St. Modwen Park Derby.

Due for completion in 2024, this next phase will see St Modwen Logistics and Winvic Construction Ltd deliver a new 147,000 sq ft warehouse which has already been pre-let. Four additional new buildings totalling c. 200,000 sq ft will also be developed to help meet increased occupier demand for mid-sized industrial and logistics units in the East Midlands.

As part of the first phase of development, to date, St. Modwen Logistics has invested more than £45m in delivering over 300,000 sq ft of sustainable warehousing across four units at St. Modwen Park Derby. Completed in December 2022, it has already attracted two international occupiers, with German heat pump manufacturer Vaillant signing for 131,000 sq ft and Swedish medical technology company Getinge establishing a new Global Centre of Excellence for Chemistry at the scheme alongside its new UK headquarters.

The quintet of new warehouses will be built to St. Modwen Logistics’ ‘Swan Standard’ for sustainable construction, meaning they will be highly energy efficient and come with an EPC A+ rating, thereby helping customers to reduce their operational costs. All five units will benefit from the installation of rooftop solar panels as standard.

Additionally, all five buildings will aim to place in the top 10% of UK new non-domestic buildings for sustainability by targeting an ‘Excellent’ accreditation from BREEAM, the leading real estate sustainability body. In line with the company’s commitment to sustainable development, the Midlands-based company is also strengthening biodiversity at the Park through the creation of a new riverside nature corridor, having already planted 17,000 trees and shrubs as part of the first phase of construction.

Located on Wyvern Way – adjacent to the A52 with direct access to the A38, A50 and nearby M1 motorway, and just 13 miles from East Midlands airport – St. Modwen Park Derby is one of the largest regeneration sites in the region and provides strong transport links and access to one of the highest skilled workforces in the country.

Robert Richardson, Development Director at St. Modwen Logistics, commented: “Our committed investments in St. Modwen Park Derby now exceeds £100m and our decision to embark on the next phase of development, underlines our confidence in Derby as hub for logistics as well as high-skilled tech and manufacturing. We expect a diversity of demand for the new units and a wide variety of employment opportunities to be generated.”

“The first phase of construction on the Park was a huge success and we are looking forward to working with Winvic again to deliver this next phase of development.”

Amanda Solloway, MP for Derby North said: “It has been fascinating to see St. Modwen Park taking shape on what was waste ground next to the Wyvern Centre. Last year, I attended the launch event and saw first-hand the huge benefits that it will bring to Derby in terms of job creation and the provision of high-quality warehouse space and the kind of modern, dedicated office space that the city and the wider Midlands needs if it is to grow and prosper.

“To see a further £59m invested into the park is therefore amazing news and an example of levelling up at its best!”

Paul Simpson, Chief Executive, Derby City Council, said: “This is more great news for the city in what has been a bumper month of major investment announcements, following the decision to make Derby the home of Great British Railways.

“In February we also welcomed two industry leaders, Getinge and Vaillant, to St. Modwen Park. Now we can look forward to seeing more in phase two, which will create more jobs and boost our economy further. It’s clear Derby is seen as a fantastic City in which to invest.

“It was great to be on site to mark this occasion, and I look forward to seeing more investment in Derby and in the next phase of St. Modwen Park.”

Danny Nelson, Winvic’s Head of Industrial, Distribution and Logistics, added: “We have built an outstanding relationship with the St Modwen team in delivering the civils and infrastructure package and the four industrial units at Derby – as well assets across other sites – and we’re delighted to have secured the contract for Phase 2. Sustainability is a fundamental part of both Winvic’s and St Modwen’s DNA and our one-team approach ensures we’re able to help occupiers achieve their own sustainability goals. The team is looking forward to progressing the scheme at pace and we are scheduled to complete all five facilities early in 2024.”

CAPTION: (L-R): Rob Richardson, Development Director, St. Modwen Logistics; Ben Shearman, Construction Director, Winvic; Ian Martin, Senior Construction Manager, St. Modwen Logistics; Paul Simpson, Chief Executive, Derby City Council; Ben Silcock, Leasing and Development Manager, St. Modwen Logistics; Adam Broadhurst, Project Manager, Winvic.

 

 

New Logistics Park: East Midlands Gateway

Posted on by Keith McKinley

SEGRO has completed a pre-let deal with Maersk, which will see the Danish shipping and logistics company establish a new centre of excellence at SEGRO Logistics Park East Midlands Gateway (SLPEMG).

Maersk will occupy a new 685,000 sq ft warehouse, designed specifically for them, which will complete in June 2023. In alignment with SEGRO’s net-zero 2030 and Maersk’s net-zero 2040 commitments, the unit is being constructed to be net-zero for both embodied and operational carbon. It will incorporate a full roof mounted PV array and extensive use of recycled construction materials. Provisions will also be made for the operation of a fully electric fleet of HGV vehicles in the future. The development expands Maersk’s offering of end-to-end logistics in the UK significantly and is the first bespoke pre-let logistics unit that the company will operate in the country.

SLPEMG is SEGRO’s flagship national big box scheme, a 700-acre development that has delivered over 4.5 million sq.ft. of sustainable logistics workspace. As part of the UK’s only inland freeport, the site incorporates a 50-acre Strategic Rail Freight Interchange (SRFI). Maersk selected SLPEMG as the site most capable of delivering operational excellence for their customers’ needs, with its central strategic location and on-site rail freight terminal providing a direct link to the seaports of Felixstowe, London Gateway and Southampton, amongst others, in order to minimise logistics emissions and significantly reduce on-road freight mileage. The benefits afforded to Maersk’s operation by the East Midlands Freeport further helped the case for choosing SLPEMG.

SEGRO Logistics Park East Midlands Gateway started construction in 2017. The site was initially anticipated to be a 10-year programme, however, occupier demand and leasing success has exceeded expectations, as the last big box plot now been leased.

Andrew Pilsworth, Managing Director, National Logistics, SEGRO, said: “SEGRO Logistics Park East Midlands Gateway is especially attractive to customers like Maersk due to the development’s scale, connectivity and our determination to develop to the highest quality and sustainability standards. The extraordinary pace at which we have delivered this scheme illustrates this. We are very excited to welcome Maersk to SLPEMG and as a new customer. We also welcome the additional employment and economic activity it will bring to the East Midlands, building on the 6,000 jobs already created at SLPEMG.”

Paul Woolass, Head of Logistics and Services Products UK & Ireland, Maersk said: “SEGRO Logistics Park East Midlands Gateway is very much the perfect blueprint for optimising connectivity and flexibility within supply chains. Not only is it ideally positioned in the UK, but the vast infrastructure and cutting-edge technology across the site means operations on UK shores can be done from one place in the most sustainable way possible. It is the epitome of two of Maersk’s key visions for the future: integrating logistics and reaching net-zero emissions by 2040.”

In November, SEGRO launched its Community Investment Plan in the East Midlands, supporting local people with skills, employment, environment and economic investment. The plan is being delivered with its construction partner, customers, suppliers and four local charity partners to undertake a range of projects with the aim of achieving the following outcomes by the end of 2025:

• 5,250 young people will be engaged through a Schools Work Programme
• 300 unemployed people will participate in bespoke skills, and training programmes
• 6 outdoor spaces will be reinvigorated to improve biodiversity and support community wellbeing

The East Midlands Community Investment Plan is a key element of the company’s commitments to boost skills, training and employment in the communities where it operates across the UK and Continental Europe. Already home to a diverse range of customers including Kuehne+Nagel, ShopDirect, Games Workshop, Arvato and DHL, SLPEMG is in proximity to the major cities of Leicester, Derby and Nottingham and other local towns ensuring the park’s customers have access to a strong labour pool.

Build-to-suit Warehouse Unit Agreed

Posted on by David Priestman

Prologis, a leading developer of logistics property, has signed an agreement with Hankook Tyre UK Ltd, to provide a new build-to-suit warehouse unit at Prologis Apex Park, in Daventry.

Hankook Tire & Technology is one of the world’s leading tyre manufacturers and its UK subsidiary has used the location of Daventry, including Apex Park, as its main distribution hub. The company has agreed terms to take DC9, a brand new, high spec unit comprising 357,221 sq. ft. on a 22-acre site on the park. Construction is scheduled to complete in early 2024.

Since entering the highly competitive UK tyre market in 1993, Hankook has been recognised as an industry leader – in product performance, innovation, productivity and sustainability. This new development forms part of the organisation’s plans to continue to grow its UK business.

Prologis Apex Park is part of a thriving employment area on the northern edge of Daventry in Northamptonshire. The site, which sits within the logistics ‘golden triangle’ at the heart of the UK’s motorway and rail network, has convenient access to the A45, M1 and M45, as well as the rail freight facilities located at nearby Prologis RFI DIRFT. Other Prologis customers at Apex Park include Toolstation, JD Wetherspoon, Hellmann Logistics, Optima Logistics and Cummins.

Construction of DC9 at Apex Park for Hankook is another example of Prologis’ ability to offer customer-centric development – with the unit size and specification tailored to meet Hankook’s requirements from the outset.

James Straw, Associate, Capital Deployment and Leasing at Prologis UK, said: “Hankook has been a customer of ours at Apex Park for a number of years and so it’s fantastic to be able to work with the business to provide a new state of the art logistics facility for their future growth and expansion. At Prologis we have a strong track record of delivering build to suit projects and are constantly looking at ways to improve our buildings. We are delighted to be delivering a building which will meet Hankook’s high expectations both operationally and from a sustainability perspective. Construction will soon be underway and like Hankook, we can’t wait to see DC9 come out of the ground.”

Chang Yool Han, Managing Director of Hankook Tyre UK, said: “Apex Park was the obvious choice for our growth as it meant we were able to provide continuity for our existing staff, and execute our growth in the utmost sustainable and ecofriendly manner plus it serves as an excellent central location for the UK market that we supply. We have been working with our advisors Drake & Partners and Excello Law for a significant period to understand our current and future requirements to grow the business and Prologis have also worked closely with us to accommodate what we need. Moving into DC9 is a significant step on our growth journey and we are looking forward to working with Prologis further”.

DC9 at Prologis Apex Park is due to start imminently, with completion expected in early 2024. Prologis were advised by ILP Partners, Cushman & Wakefield and Colliers. Hankook was advised by Drake & Partners.

Speculative Development for St. Modwen Logistics

Posted on by Keith McKinley

St. Modwen Logistics, one of the UK’s leading logistics developers and managers and a Blackstone portfolio company, has announced that it will soon deliver c. 450,000 sq ft of warehouse space at St. Modwen Park Chippenham, including the company’s largest speculative development in the region, a 342,000 sq ft warehouse unit.

The development, which is under construction by Winvic and is set to complete in summer 2023, also includes an additional 110,000 sq ft unit, with both warehouses built to St. Modwen’s Swan Standard guidelines for environmentally friendly construction. St. Modwen Park Chippenham is already home to businesses including Huboo and FurnitureBox.

The buildings are being built to high environmental standards and targeting a BREEAM ‘Excellent’ rating. Sustainable features of the new warehouses include solar PV panels, which generate a significant proportion of clean energy used by the offices, making them net zero carbon in operation. The developments will also include a proportion of parking spaces reserved for electric vehicle charging points, and smart energy management systems which contribute to an EPC A+ rating.

Once built, the new warehouses will have the potential to employ up to 600 people in the Chippenham area, which benefits from a strong local labour force and excellent transport links. Strategically located adjacent to the M4, the site benefits from being less than a mile from Junction 17 and is ideally placed for nationwide distribution.

This latest project further demonstrates St. Modwen Logistics commitment to the region, with 860,000 sq ft of development work scheduled for completion in 2023. Work is progressing on three new units at St. Modwen Park Access 18 Avonmouth, whilst in nearby South Wales, four new warehouse units at St. Modwen Park Newport were recently completed to meet the demands of businesses in the region.

Peter Davies, Development Director, St. Modwen Logistics, said: “Chippenham benefits from its access to a skilled local labour force and its strategic location at the gateway to major consumer markets in the South West of England and South Wales. However, there is an acute undersupply of high-quality warehousing and we are responding to that by delivering new schemes capable of creating hundreds of jobs for local people and providing occupiers with fit-for-purpose, sustainable logistics space.

“Our decision to progress with the expansion of St. Modwen Park Chippenham and the delivery of our largest ever speculative development is testament to both the strength of the business’ investment and development expertise, and to the resilience of occupier demand in the South West.”

Winvic’s Head of Industrial, Distribution and Logistics, Danny Nelson, added: “We’ve been making excellent progress on the two warehouse facilities in Chippenham, and we’re proud that one is St. Modwen’s largest speculative development. Working in partnership with the St. Modwen team, Winvic has focused on the requirements of tenants and have designed and constructed these buildings with sustainability at their heart.

The new developments support the continuing expansion of St Modwen’s logistics platform, which was acquired by Blackstone, the world’s largest alternative asset manager, in 2022. Since then, the business delivered 2.2m sq ft of developments with industry leading ESG credentials. In addition, over 1 million sq ft of space has been acquired in the last 6 months.
Chippenham is recognised as a major commercial location in North Wiltshire, benefiting from a strong local labour force and excellent transport links. 56% of local residents are aged between 16-44 and 77% live and work locally. There is significant opportunity to create high-quality, high-paying job opportunities in the region for local workers of a variety of ages and education levels, with St. Modwen Logistics’ schemes providing office space as well as warehousing, supporting managerial and administrative functions alongside manual logistics roles.

Belgium Warehouse Expansion in 3 Locations

Posted on by David Priestman

Bleckmann, supply chain management experts for fashion and lifestyle brands, is expanding with 60.000 m2 of warehouse space, at three strategic locations in Belgium. The distribution centres in Belsele, Herentals and Grobbendonk support the growth of customers, who also benefit from Bleckmann’s growth opportunities and additional logistics flexibility.

Belgium is both historically and geographically crucial for Bleckmann. In this growth, Bleckmann is also committed to reducing its ecological footprint. The company is currently expanding in three different locations in Belgium. West of Antwerp in Belsele (Sint-Niklaas), a new fulfilment centre is being set up. East of Antwerp, in Herentals, a new distribution centre was set up specifically for a new customer. Just ten kilometres from there, in Grobbendonk, the largest Bleckmann warehouse in Belgium is also being further expanded.

In Belsele, Bleckmann opens a completely new distribution centre at a strategic location. By making optimal use of the available surface area and by placing mezzanines, the total operational capacity will be increased to 31.000 m2. Via the E17 motorway, the distribution centre has a good connection to the Port of Antwerp and the European hinterland.

Uniquely, the fulfilment centre is entirely focused on rapidly operationalising and serving new customers. “Here, we create the capacity to anticipate customer requests quickly and flexibly. Through our multi-client approach, each new brand immediately benefits fully from the group’s expertise and solutions,” says Mark Van Onna, General Manager Real Estate at Bleckmann.

Herentals: fast fulfilment solution

The site in Herentals is an example of how quickly Bleckmann responds to a customer’s demand. For one of our new customers, we opened this fulfilment centre of 8.500 m2 operational area, fully dedicated to this customer. In a smooth way and in a very short timeframe, Bleckmann took over the e-commerce fulfilment of another service provider to meet the customer’s needs

Reinardt van Oel, Chief Operations Officer Belgium & UK at Bleckmann: “Our customers hire us to relieve them of all their logistics worries. We therefore put everything in place to set up the complete solution even in a very short period of time: our knowledge of setup, our systems and technology. Our customers ask. We solve it.”

Grobbendonk: largest campus in Belgium under one roof

The strategic site in Grobbendonk, located directly on the Albert Canal connected to the Port of Antwerp, is further expanded to a total operating area of 120.000m2. To the already existing 100.000 m2, Bleckmann has added an additional unit and equipped the existing ground area with mezzanines. This will make Grobbendonk one of the largest campuses under one roof within Bleckmann.

This site is also at the forefront of innovation, with forward-looking developments. Mark van Onna: “Grobbendonk is a technological pioneer within our group. There, we test logistics possibilities with robots and implement innovations in daily fulfilment. We then roll out successful projects to the other customers and sites.”

Sustainable investments in warehouses

Investments are made in each project to improve the sustainability of the sites. Through its CSR strategy, it aims to be part of the solution, rather than a co-creator of the problem. Among other things, lighting has been looked at, for example, where possible, LED lighting will be installed and combined with motion sensors to further reduce energy consumption.

“Crucially, we make optimal use of the scarce land. We do this through mezzanines and the most optimal rack structures. As a result, we expand our floor space in the existing buildings far more than the land area we occupy,” adds Reinardt van Oel. Bleckmann continues to expand further. The current nearly 300.000 m2 of operational area in Belgium will soon be complemented by operational area of Crosswoods – a brand new distribution centre in Kruisem

Global Network Becoming Carbon Neutral

Posted on by David Priestman

Arvato Supply Chain Solutions has switched the energy supply of five more distribution centres in the USA to green electricity from wind and solar energy, aiming to be carbon neutral. Following the warehouse in Pleasant Prairie, Wisconsin, four distribution centres located in Louisville, Kentucky, and one in Valencia, California, now also obtain electricity from renewable sources. This will reduce annual greenhouse gas emissions by an average of around 3,100 metric tons of CO2. This is a further step in the sustainability strategy of the supply chain and e-commerce service provider, which, together with its parent company Bertelsmann, aims to be carbon neutral by 2030.

“To enable us to achieve this ambitious goal, all Arvato sites worldwide will be converted to green electricity,” says Mitat Aydindag, President of Arvato North America, explaining the strategy. “It underscores our company’s commitment to environmental protection and the responsible use of natural resources. It’s important to us that our success is measured not only by economic figures, but also by the measures we’ve implemented to build a more sustainable organization.”

In general, however, the supply of “true” green power, i.e. power from renewable sources such as solar and wind, is still very limited in the U.S., and making the switch is sometimes very difficult, depending on the region. That’s why Arvato Supply Chain Solutions in Louisville, Kentucky, is working with two local electric utilities, LG&E and East Kentucky Power Cooperative. Both companies offer a green power program that buys “green” energy to offset the electricity consumed on-site. “Because our distribution centres in Louisville are among the first in the U.S., we are especially proud that these sites are now purchasing green electricity to support the expansion of renewable energy in the region,” says Rachael Miller, Site Director for Arvato’s Louisville campus.

The Valencia, California, site, on the other hand, relies on the Clean Power Alliance. Clean Power Alliance is the locally operated not-for-profit electricity provider for 30 cities across Los Angeles County and Ventura County, as well as the unincorporated areas of both counties. Here, the traditional utility provides transmission and distribution of the electricity, while a third party purchases the green power on behalf of program participants. In 2020, 70 percent of the electricity provided came from solar power and 30 percent from wind power. “It’s very encouraging when businesses make the leadership decision to select 100 percent renewable energy as their preferred power option,” said Matthew Langer, Chief Operating Officer at Clean Power Alliance. “When companies like Arvato choose to use renewable energy in their operations, it can help spur demand for more renewables in the market and contribute to the renewable energy transition.”

This view is shared by Stephan Hackert, Vice President and Industry Lead Healthcare U.S. at Arvato: “All of our employees in the U.S. are very proud of this commitment – after all, we are successively sourcing more and more of our country-wide electricity needs from clean, renewable sources.” These kilowatt hours make an important contribution to the targeted climate neutrality. “Having already made a decisive contribution to achieving our climate protection targets with these measures, we will now look at the remaining emissions and consider which measures we can use to compensate for them,” adds Aydindag.

At the beginning of the year, Arvato’s newest location in Las Vegas was officially opened. Following the ambitious decision to become climate-neutral by 2030, Arvato placed a high value on sustainability while designing the warehouse. The logistics centre, for example, was designed with a reflecting roof that absorbs only a small amount of direct sunlight. It effectively prevents the building from overheating, lowering energy usage for air conditioning. The highly efficient LED lighting with connected occupancy sensors deployed throughout the building also contributes to energy savings. Furthermore, the warehouse has around 250 skylights that allow plenty of daylight into the building, thereby reducing the power consumption.

“Sustainability is a continuous improvement effort,” highlights Aydindag. Arvato Supply Chain Solutions has a total of 87 warehouses on five continents with more than 27 million square feet of storage space. In the US, the warehouse network includes a total of 10 locations in Ontario (CA), Valencia (CA), Las Vegas (NV), Pleasant Prairie (WI), Louisville (KY) and Memphis (TN), where comprehensive logistics services are provided to numerous customers in the consumer tech and healthcare industries.

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