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Brambles to Speed Up Growth, CHEP Boss Leaves

Reuters
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Australian logistics firm Brambles said on Thursday it planned to speed up growth of its existing businesses, and outlined a new management structure for its core CHEP pallet business.

Brambles said it would pursue growth opportunities in the United States and Europe as well as in new markets, while CHEP would be restructured into three geographical groups.

It also announced the head of its CHEP operations, Dave Mezzanotte, would leave the company in 2008.

Briefing investors, Brambles' new chief executive, Michael Ihlein, did not provide specific forecasts or an earnings update but pointed to markets where he said the company could expand.

"We are now in an excellent position to accelerate profitable growth and we recognise the importance of delivering susitainable, double-digit revenue growth over the medium to long term," he said.

Brambles shares, which have fallen 20% since hitting all-time highs in February, were trading up 4.3% in the morning session. The stock was trading about 2% higher ahead of the briefing.

Brambles, the world's top pallet supplier, said last month sales at its CHEP pallet operations rose 11 percent in the United States in the 11 months to May, but by just under two percent in Europe, sending its shares lower.

Brambles has generated $3.6 billion from selling its waste management, material handling and logistics businesses in the past two years and grown the U.S. arm of its core CHEP business.

Ihelin said the company planned to grow organically and in new segments in existing markets under an "Organic Plus" program. It would also target new geographies and possible acquisitions.

He said Brambles' CHEP pallet business  would target growth on the beverages segment in the United States where it had a small presence, and in the grocery segment in Europe. In said Germany was a major opportunity.

CHEP pallet business generated about $1 billion in annual revenue from the United States in a total market worth $10 billion, he said.

CHEP's operations would be managed as CHEP Americas, CHEP EMEA in Europe and CHEP Asia-Pacific with each headed by a Group President with full operational responsibility for each region.