Toll still has eye on Brambles
TOLL Holdings still has pallet king Brambles on its radar, and is keen to buy parts of defence contractor Tenix and Queensland Rail.
The transport giant has also foreshadowed a “green logistics” strategy early next year.
Managing director Paul Little said Toll remained interested in pallet supplier Brambles, in which Toll has a 0.5 per cent stake, because pallets played a key role in the supply chain.
But Brambles was just one opportunity, he said, speaking after the annual meeting in Melbourne. Toll was not in talks with Brambles.
“There are other pallet operators we will look at,” he said. “We have been chatting to a number of people.” These included Loscam, the second-biggest pallet operator after Brambles, with 20 per cent of the domestic market and a huge presence in Asia.
Mr Little said Toll’s ability to make big acquisitions in Australia was limited by competition concerns. But Toll would closely monitor QR’s proposed corporate restructure.
“We can greatly assist QR in developing and optimising its freight operations, particularly in Queensland,” he said. “Some break-up will occur, and there may well be bits we want Toll has extensive operations in north Queensland.”
Mr Little said this did not mean Toll would neglect Pacific National, the rail giant now owned by Toll spin-off Asciano. “We have contracts with PN that we must ship through that business,” he said.
Mr Little said Toll was a big user of rail and the ports, and would participate directly in these areas to support its customers.
Toll was not prevented by the competition regulator from being involved in bulk cargo in the ports, or starting up a rail business. “But we don’t intend to do that,” he said.
Mr Little said Toll was interested in buying some of Tenix’s assets if the company was broken up.
“There are some parts that we think may be suited to our defence logistics operations,” he said. “Defence logistics is a big part of what we do today, both in Australia and in Asia.”
Mr Little said the company’s proposed “green logistics” strategy would encourage customers to use more fuel-efficient train and sea services over longer line-haul routes.
“Toll is also working with vehicle manufacturers in the US and Japan, who are developing new vehicle technologies to promote the use of alternative fuels such as biodiesel,” he said.
Toll had also set up a web-based information system, GEMS, to measure more accurately the company’s carbon use, and to determine the effectiveness of abatement initiatives, he said.
Chairman Ray Horsburgh told shareholders that earnings to date in fiscal 2008 were well ahead of this time last year. “The outlook for the full year and beyond remains very positive,” he said.
Mr Little reiterated that Asia, particularly China and India, were huge growth markets, with joint ventures the preferred way of expanding in both markets.
Toll was still evaluating its investment in Virgin Blue, whose share price did not reflect its true value. Options were being evaluated to maximise this, he said.
Toll’s shares gained 7 to $13.72. Brambles fell 8 to $13.95 and Asciano fell 13 to $8.22.
