Pact Group has extended its existing seven-year-old contract to own, operate, wash and store a crate pool for Woolworths Group by another 10 years.
The deal with Woolies, which is worth more than $50m a year, has been running since 2016. It will now extend beyond the end of the decade to 2033.
The plastic produce crates are used by Woolworth in its fruit and vegetable supply chain. The crates circulate in a continuous loop from suppliers’ packhouses to Woolworths’ distribution centres and into stores, replacing traditional single use corrugated cardboard, waxed cardboard and expanded polystyrene boxes. Pact’s reusable crates are designed to be used about 140 times before being recycled.
Sanjay Dayal, managing director and Group CEO at Pact, said “We are pleased that Woolworths has extended what is clearly a cornerstone and material contract for our crate manufacturing and pooling business. This extension reflects our strong relationship with Woolworths and is further evidence of our market leading capability in crate pooling that underpins the performance of our Materials Handling & Pooling segment. We are looking forward to working with Woolworths over this period."
Woolworths has not taken up its option to buy half the shares in the Pact entity that provides services to Woolworths, with the option now removed from the new contract. Pact’s crate manufacturing and pooling business forms part of its Materials Handling & Pooling segment.
Citing sustainability Dayal also said, “This is another example of Pact’s and Woolworths’ long term commitment to the circular economy, with Pact having also recently entered into a new partnership with Woolworths to provide packaging to increase the recycled content used in Woolworth’s own brand packaging.”
Dayal is referring to the strategic partnership Pact and Woolworths signed last year, that will see Pact’s recycled packaging being used for Woolworth’s Own Brand products including milk bottles, meat trays, fruit and vegetable punnets and beverage bottles. According to Pact the partnership is the largest of its kind in Australia.
Pact will source recycled PET and HDPE resin from its domestic recycling facilities to manufacture new food and beverage packaging for Woolworths.
