Foster’s Group Limited (Foster’s) today announced its decision to proceed with the development of a purpose-built bottling and warehousing operation adjacent to the Wolf Blass Winery in the Barossa Valley, South Australia.

The company intends to develop a high speed bottling facility, with initial capacity of 10 million cases per annum. Capital expenditure associated with the project is estimated at $69 million, with commissioning and full operation expected by June 2006.

The development of the facility forms part of the supply chain efficiency initiatives announced as part of the Beringer Blass Wine Trade Operational Review on 8 June 2004. The new facility will consolidate the majority of Beringer Blass’ Australian wine production and packaging to the Wolf Blass winery.

The development will result in lower production costs through use of advanced technology, significantly improved flexibility in production scheduling and through reduced freight distances and stock carrying costs. Once construction is completed, the new facility will replace capacity at operations at Merbein and Smythesdale in Victoria. The commitment to this project forms part of the delivery of the estimated cost savings from the Wine Trade Operational Review of between $60 million per annum by F07 increasing to about $85 million per annum by F09.

The new facility will provide a flexible, scaleable packaging platform, representing a “best in class” packaging and warehousing cost structure. Some of the features of the facility include:

• High speed bottling capability for packaging still table wines and sparkling wines.
• Modular, scaleable design to a potential capacity of over 24 million cases per annum.
• An integrated, semi automated warehousing facility with a capacity for 20,000 pallets of finished goods.
• Utilisation of a range of leading supply chain technologies and automation, relating to areas such as storage and retrievals systems, case picking, and bottling line changeover.
• Robotic equipment for packaging multi-packs, mini-packs and other packaging configurations for both the Australian and overseas markets.
• Storage and temperature controlled storage for bottle aging and museum stock.

Beringer Blass Wine Estates Managing Director – Asia Pacific, Anthony Davie, said: “The decision to commit to development of this new packaging and warehousing facility further leverages the scale, capacity and efficiency of the Wolf Blass winery. In addition to providing a highly efficient, low cost packaging facility, the configuration of the new facility will contribute to the Group’s revenue and earnings generation initiatives by allowing greater innovation in packaging, enabling Beringer Blass to have greater flexibility in developing pack types, sizes and wrapping.”

The development will also result in significant environment benefits. A 66% reduction in total freight kilometres for the movement of dry goods and finished wine is expected to have significant environmental benefits, while the new facility will incorporate many advanced features, to increase water and power efficiency.

Further information:

Media
Lisa Keenan
Tel: +613 9633 2265
Mob: 0409 150 771

Investor Relations:
Michael Roberts
Tel: +613 9633 2273
Mob: 0407 391 829