PALLET PROVIDER CHEP, WALMART REACH AGREEMENT: BRAMBLES

Global pallet and record management firm Brambles (ASX:BXB) says CHEP USA has reached agreement with US retailer Walmart to continue to participate in its logistics network, at limited ongoing cost to Brambles.

Brambles supplies CHEP pallets to major customers such as Walmart.

Brambles said today that CHEP USA "had reached a formal agreement in relation to CHEP's ongoing participation in Walmart's logistics network in the USA, at limited ongoing cost to Brambles".

"The agreement maintains the benefits of Total Pallet Management (TPM) for CHEP and the ongoing supply chain."

Some operating arrangements will change under the new agreement.

But there would be no impact on sales revenue or issue volumes from the new arrangements, Brambles said in a statement today.

Brambles chief executive Mike Ihlein said: "The relationship between Walmart and CHEP is a very important one for both companies and I am pleased that together we have been able to develop a solution that maintains the benefits of Total Pallet Management."

The impact on CHEP'S net annual operating costs from fiscal 2010 will be limited to about $5US million ($3US.37 million) compared to cost neutral previously.

As previously disclosed, CHEP will incur total costs for fiscal 2009 of about $30A million before tax, reflecting the transition to the new arrangements.

(AAP)