Melbourne-based logistics business, Silk Logistics Holdings, has commenced site consolidation and capacity expansion of its New South Wales warehouse operations.
Silk has agreed to purchase an 11-hectare site at Kemps Creek, Sydney, for a $58 million cash consideration.
This initiative is expected to improve operational efficiencies for the transport and logistics business.
Over a three-year period, Silk is set to hit a number of key milestones including entering into a sale and leaseback agreement with a preferred take-out party, development of the site to accommodate purpose-built warehouses for Silk’s operations and achievement of practical completion by Q4 2024.
“This NSW property consolidation is an important strategic initiative as it secures a long-term presence for the Group’s operations in a key growth corridor at a lower cost to serve, adds storage capacity for future growth and provides the opportunity to share in the development profit,” said Silk Managing Director and CEO, Brendan Boyd.
On 9 July 2021, Silk listed on the Australian Securities Exchange (ASX) after completing a $70 million Initial Public Offering (IPO).
The $70 million IPO comprised a primary raise of $10 million and a secondary raise of $60 million to facilitate partial equity sell-down of Silk’s longstanding financial partner and investor, Tor Investment Management.
Silk has two primary divisions. Port Logistics provides wharf cartage, while Contract Logistics offers warehousing and distribution.
Several industries including FMCG, light industrial, food, specialised retail and containerised agriculture call on Silk for its services.
In financial year 2022, Silk forecasts earnings before interest and tax of $20.9 million.