Tesco talks up supply chain in Asia

UK-based supermarket Tesco has opened a new distribution centre in the Thai city of Khon Kaen, which Asia CEO Trevor Masters says "would be cutting edge anywhere in the world".

Commenting on the Tesco Talking Shop blog, Masters said that the new north-east Thailand distribution hub has been created to take the pressure off the retailer's central depots in the capital city of Bangkok and allow the company to source more products locally and deliver items more quickly to customers.

The technology is the same as Tesco would use in the newest of its distribution centres in the UK, said the Asia CEO, and it will serve 300-plus stores and has already created 1,000 local jobs.

Tesco estimates that the new DC will save 400,000 road kilometres in distribution per week, while modern technology introduced at the site such as green refrigerants, LED lighting and a range of insulation and heat recovery measures, help keep the building's environmental impact low.

Masters commented: "Facilities like Khon Kaen DC will help us to pursue our strategy of disciplined international growth. It will allow us to grow our market share in a region with huge opportunity – in this case the developing upcountry areas of Thailand."

Tesco said last month that sales in Asia were up 1.4% to £10.9 billion in the last financial year, although profit dropped 6.8% due the continued investment in stores and infrastructure. Like-for-like sales in Thailand were said to be "under-pressure" due the impact of the recent recession and political unrest, but the grocer is focused on improving its offer and further developing its multichannel proposition in the country.