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Published on October 2, 2007

Tesco Lotus has announced it will spend more than Bt900 million on a new 25,000-square-metre cross-docking facility at its Wang Noi distribution centre in Ayutthaya province.

The UK-based hypermarket giant, in cooperation with its transportation partners Linfox Transportation (Thailand) and Eternity Grand Logistics, has also converted its entire fleet of diesel-powered trucks and motorised equipment to use 5-per-cent biodiesel.

Consisting of about 400 units, this makes it the first and largest retail fleet to undertake such a conversion in Thailand. The move is expected to reduce the company's emissions of carbon dioxide by about 3 tonnes a year.

Mike Reid, distribution director of Ek-Chai Distribution System, operator of Tesco Lotus hypermarket stores, said the existing seven-year-old cross-docking facility in Wang Noi district was running at 90-105 per cent of maximum capacity. The centre handles 1.3 million to 1.5 million cases per week.

Reid said the new Bt900-million cross-docking facility would handle up to 3 million cases per week and begin operating next year. The Wang Noi complex will serve mainly Tesco Lotus hypermarkets.

The company's other 23,000-square-metre distribution centre in Nonthaburi's Bang Bua Thong district will handle logistics management and product transportation for Lotus Express, the company's mini-retail outlets serving shoppers in small and medium-sized communities.

Tesco Lotus, which celebrates its 13th anniversary in Thailand this year, currently operates 380 retail outlets throughout the Kingdom. Of those, 280 o are Lotus Express stores, 70 are conventional Tesco Lotus hypermarkets and Khumkha compact hypermarkets and the rest are Talad Lotus stores.

Ek-Chai Distribution System senior vice president Darmp Sukontasap said Tesco Lotus would continue to open five or six conventional hypermarkets and 80 Lotus Express outlets each year. About 120 new stores in all of the company's retail formats will be opened annually.

Announcing the conversion of its entire diesel-powered fleet to use 5-per-cent biodiesel, Tesco Lotus said the move would reduce the company's carbon footprint by about 3 tonnes of carbon dioxide each year.

Because the fleet currently uses 20 million litres of fuel a year, the move will also deliver savings on the company's fuel bill, which can be passed on to customers.

"However, to encourage the private sector to switch from imported diesel to biofuel, the government and related authorities should provide incentives, such as reductions or exemption from value-added tax or corporate tax, to business operators using a large amount of biodiesel," Darmp said.

Kwanchai Rungfapaisarn

The Nation