World views of Dr. L. Allan Austin

Toll Rules Out CHEP Takeover
November 11, 2010

Paul Little is the Managing Director on the Board of Directors at Toll and recently gave an interview to SupplyChain Review on the company’s performance and interest in CHEP.  Although he says “it’s old news” and that “Toll isn’t interested in Chep” anymore, Little adds: “Our view was that Chep was losing marketshare. They had a passing parade of executives. Our view was that if you don’t address the fundamentals then the rest of it doesn’t matter.

“Chep pays very poorly to the people that cart empty pallets, but I’m talking about the whole Chep model globally. Australia accounts for only about 15 percent of its revenue.

“We were concerned about Chep’s whole approach with regard to how the pallet fits into the supply chain. We felt the company’s ability to get a margin is reduced.” For the complete article read, “The Toll juggernaut rolls on

Toll has acquired multiple companies that manage different aspects of the supply chain.  Toll Global Forwarding has grown in annual sales of $1.5 billion with 100 offices and employing over 3000 people across 30 countries.  Mr. Little adds that with cash on hand equaling over half a billion there is plenty of room for additional acquisitions both large and small.

Brambles stock continues a downward trend closing at $5.46AUD per share, which is quickly approaching a 52 week low.  Brambles reorganization pains and hard fought battle with competitor iGPS seems to have shaken investor confidence and concerns that the company is not the right track.  The question is, if Brambles continues to lose market value how vulnerable will the company become?

It is clear with iGPS fighting for U.S. market share, Loscam challenging in the Asia Pacific market and continued decline in market value the Gorman plan needs to make noticeable strides to regain consumer confidence.

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