MAGNIT PJSC (MGNT)
Press-Release | Novosibirsk | October 1, 2020
Magnit Opens New Distribution Center in Novosibirsk
The Company opened a modern logistics hub in Sadovy village, 15 km from Novosibirsk. The warehouse has a total area of 40,000 square meters and will serve about 450 Magnit stores in Novosibirsk and Altay regions.
Novosibirsk, Russia (October 1, 2020): Magnit PJSC (MOEX and LSE: MGNT; Company, Group), one of Russia's leading retailers, has commenced operations at its distribution center in Novosibirsk. Previously, Magnit used several leased warehouses to supply its stores in the region. The new logistics hub was designed and built using cutting-edge technology specifically to fit the Company's current needs and support its future plans for development in Siberia. The distribution center will enable Magnit to significantly improve efficiency of its logistics in the region.
The logistics complex includes an ambient storage facility, refrigerated storerooms, artificial ripening chambers for bananas, a non-food product warehouse, an administration and amenities building, a recycling facility, a separate building for the motor transport enterprise complete with a repair and maintenance area, as well as a fuel station and a technical inspection point.
The distribution center will process around 6,650 tonnes of products every day, accepting deliveries from suppliers and dispatching goods to stores. In addition to federal suppliers, the warehouse will also receive products from around 100 local producers. At the moment, the hub serves about 450 stores in Novosibirsk and in Altay region. Its motor transport enterprise will have a fleet of around 80 trucks.
To ensure proper storage, picking, and delivery of products, the distribution center was automated to the maximum possible extent. For instance, it utilizes automatic ordering and product placement systems, while time slotting helps in choosing the best time for a supplier to arrive for unloading. For quality assurance purposes, acceptance of fresh products (fruits and vegetables) is done remotely: experts from the headquarters assess the delivered items using video cameras and other advanced tools. The Company is currently implementing a Pick-by-Voice solution in order to decrease the time required to assemble an order and the costs associated with handling. Products are stored and dispatched using modern warehousing equipment and machinery. In addition to that, the Company monitors the quality of goods in real time: the distribution center is fitted with a remote temperature monitoring system, while during delivery to the stores, temperature of products inside the truck is tracked using special sensors.
The grand opening of the distribution center was attended by the Governor of Novosibirsk region, Andrey Travnikov, and the management of Magnit Retail Chain.
"Siberia is one of the key regions for Magnit. We plan to continue developing our stores here and create new interesting offers and convenient services for our customers. Having a modern distribution center will enable us to speed up delivery of our products to consumers, expand our cooperation with local suppliers, and establish a solid foundation for our future business projects,"-said Jan Dunning, Magnit President and CEO.
"Due to its location and capabilities offered by its transport infrastructure, Novosibirsk serves as the gateway for commerce across entire Siberia. Modern trade isn't about supply depots and food warehouses of the old days, it's about state-of-the-art production facilities that evolve every day thanks to developments in logistics, digital solutions, and advanced management mechanisms. Today, we take part in the launch of a logistics hub for the largest retail chain in the country. Novosibirsk region is on the forefront of transformation of modern logistics, commerce, product distribution, and job opportunities for local residents. Together with the motor transport enterprise, the new distribution center represents almost a thousand new jobs. Through its active development in Novosibirsk region and neighboring territories, Magnit also drives growth for our producers, most notably in agriculture and processing industries. In just two years, share of local products on the shelves of Magnit stores grew from 14% to 32%, with bread and pastry going up to almost 100%, and dairy and poultry to 50%. In Magnit, consumers can always find products from manufacturers familiar to and beloved by the residents of our region. I am certain that our long-term partnership will continue in the future,"-noted Andrey Travnikov, Governor of Novosibirsk region.
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Note to editors:
Public Joint Stock Company "Magnit" is one of Russia's leading retailers. Founded in 1994, the company is headquartered in the southern Russian city of Krasnodar. As of June 30, 2020, Magnit operated 38 distribution centres and 20,894 stores (14,581 convenience, 472 supermarkets and 5,841 drogerie stores) in 3,710 cities and towns throughout 7 federal regions of the Russian Federation.
In accordance with the reviewed IFRS 16 management accounts results for 1H 2020, Magnit had revenues of RUB 763.4 billion and an EBITDA of RUB 86.9 billion. Magnit's local shares are traded on the Moscow Exchange (MOEX: MGNT) and its GDRs on the London Stock Exchange (LSE: MGNT) and it has a credit rating from Standard & Poor's of BB.
This document contains forward-looking statements that may or may not prove accurate. For example, statements regarding expected sales growth rate and store openings are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from what is expressed or implied by the statements. Any forward-looking statement is based on information available to Magnit as of the date of the statement. All written or oral forward-looking statements attributable to Magnit are qualified by this caution. Magnit does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances.
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