June 18, 1998 : Fletcher Challenge Canada announced today it has signed a contract for a new $13.5 million distribution centre in Surrey. The majority of the company's printing paper products will be channeled through the new facility for shipment to customers globally.

"Centralizing movements through one site will improve our ability to reduce product damage, contain costs and shorten delivery time by streamlining the product flow to customers," says Carlos Guilherme, the company's vice president, supply chain.

The Fraser River Harbour Commission will own the 315,000-square-foot distribution centre. It will be leased to and managed by the Wesik Group, a diversified group of companies operating in the Lower Mainland of B.C. Owned by Mr. Peeter Wesik and his family, the Wesik Group manages Fraser Surrey Docks and has interests in Parklane Homes and commercial and industrial real estate.

N. Wallace & Company Limited will start construction of the new paper-handling facility in June, with startup expected in February 1999. Fletcher Challenge Canada will have exclusive use of the facility through a long-term lease.

The local economy will also benefit from the new distribution facility, according to Guilherme, as 260,000 tonnes of product that previously went to Seattle warehouses will stay in B.C.

"The new centre will create 80 new jobs during construction and 35 full-time jobs once the facility is fully operational," says Guilherme. "This is in addition to the spin-off jobs associated with the transportation activities that will be moved from Seattle to Vancouver -- such as barge, truck and rail."

The new system is an important initiative in the company's overall "lightweight runnability" strategy to create value for publishers and commercial printers by significantly reducing the number of paper breaks in long press runs.

"Minimizing product damage is a key component to helping customers achieve superior runnability with our paper," says Guilherme.

The distribution centre is included in a major supply chain overhaul at the company to streamline order processing through distribution. In addition to reducing product damage, Guilherme says other changes underway will significantly lower paper handling costs, while improving "cycle time" and asset utilization.

For more information:

Carlos Guilherme
Vice President, Supply Chain
Fletcher Challenge Canada
Tel. (604) 654-4418