HOUSTON, Feb. 27, 2006 (PRIMEZONE) -- SYSCO Corporation (NYSE:SYY), North America's largest foodservice marketer and distributor, today announced that it has signed a memorandum of understanding to purchase a 320-acre site in Hamlet, Indiana, where the company will construct its third redistribution center (RDC) and create approximately 500 new jobs in the process.
Following an extensive review of sites throughout the states of Illinois, Indiana and Michigan, a location near the intersection of US 35 and County Road 500N in Starke County, Indiana was selected. The state of Indiana, through the Indiana Economic Development Corporation (IEDC), Starke County, and the town of Hamlet worked together to provide an incentive package that helped attract SYSCO's Midwest Redistribution Center.
"Investments like the one SYSCO is making reflect an encouraging confidence in Indiana as a place of economic promise," said Indiana Governor Mitch Daniels.
The approximately 700,000-square-foot operation will include freezer, refrigeration, dry storage, office space and a truck maintenance facility. The operation is expected to be completed within 18 months after construction begins. Once the RDC is operational, it will begin supplying products to 14 SYSCO broadline facilities in Illinois, Indiana, Iowa, Kentucky, Michigan, Missouri, Ohio, Pennsylvania, and Wisconsin.
The redistribution center is the third site location of as many as nine planned facilities throughout the United States as part of SYSCO's Supply Chain Initiative project. The goal of the project is to maximize efficiencies and create supply chain capabilities that increase value to suppliers, customers and SYSCO by utilizing more efficient planning and forecasting methods and leveraging technology systems to reduce operating and delivery expenses. The first redistribution center, which began shipping products in February, 2005, is located in Front Royal, Virginia and services 14 of SYSCO's broadline distribution companies in the Northeast Region.
Kenneth J. Spitler, executive vice president of SYSCO and president of North American foodservice operations, said, "The Hamlet, Indiana location will be instrumental in establishing a more efficient supply chain for our operating companies in the Midwest Region. The site is strategically located for redistribution activities, is a product of sound public planning and utility infrastructure, and provides ready access to three Interstate highways and railroad systems."
Mr. Spitler also expressed his gratitude for the efforts of many individuals who helped make the site selection process a success, including: Charles Weaver and the entire Starke County Development Foundation; President Kevin Kroft and the Board of Commissioners of Starke County; President David Kesvormas and the Board of Trustees of the Town of Hamlet; and the entire staff of the Indiana Economic Development Corporation.
The economic development incentives offered by the IEDC include training grants from the Skills Enhancement Fund (SEF) to train Indiana resident employees; training grants for technology professionals through the Technology Enhancement Certifications for Hoosiers (TECH) fund; assistance with off-site infrastructure improvements needed to serve the site through the industrial development grant fund (IDGF); and tax credits from the Economic Development for a Growing Economy (EDGE) and the Hoosier Business Investment tax credit program.
SYSCO is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. For the fiscal year 2005 that ended July 2, 2005, the company generated $30.3 billion in sales. For more information about SYSCO visit the company's Internet home page at www.sysco.com.
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Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding the timing and anticipated benefits of the national supply chain project and regional redistribution facilities, industry growth and employment growth. These statements involve risks and uncertainties and are based on current expectations and management's estimates; actual results may differ materially. Those risks and uncertainties that could impact these statements include the risks relating to the foodservice distribution industry's relatively low profit margins and sensitivity to economic conditions, SYSCO's leverage and debt risks, the risk of exposure to product liability claims, the risk of interruption of supplies due to lack of long-term contracts, severe weather, work stoppages or otherwise, construction timetables, management's allocation of capital and the timing of capital purchases, the ability to control expenses and other risk factors detailed in SYSCO's Form 10-K for the fiscal year ended July 2, 2005 filed with the Securities and Exchange Commission.