“As we expand our customer base in the Midwest region, it is important we have an effective distribution network to service these customers economically and efficiently,” said Thomas Perkins, Core-Mark CEO. “We look forward to the benefits of having a division in this area of the country to service many of our existing customers and support our continued market expansion.”
From this new division, the company expects to service approximately 1,000 new stores and to transfer an additional 1,000 existing stores from other Core-Mark divisions by the end of the first quarter in 2015. This transfer is expected to result in transportation cost savings as the company reduces mileage to service customers in the region.
Start-up costs are expected to be approximately $1.5 million, and capital expenditures are expected to be approximately $16 million. As a result of this new distribution center, Core-Mark’s management now expects total capital expenditures to be approximately $50 million for 2014.