Food for thought: SME profile

Tuesday, 01 April 2003


    A $100 million import/export freight terminal, a thriving food service company, investment and construction interests may have seemed light years removed from a young man driving around the countryside selling ice cream from the back of a truck.

    A $100 million import/export freight terminal, a thriving food service company, investment and construction interests may have seemed light years removed from a young man driving around the countryside selling ice cream from the back of a truck.

    But for George Tanos, it was simply a reality waiting to happen.

    In 1975, Tanos took over what had been a sideline of his father's Sydney-based ice cream business and, starting with a customer base of just 30, began selling around the NSW Central West.

    After gaining an engineering certificate, he started work as an engineering draftsman, ending up as production manager after three years and specialising in electro-mechanical design, a skill he still uses today.

    Although raised in Sydney, Tanos moved to the town of Blayney, equidistant from Orange and Bathurst and a convenient distance from centres such as Cowra and Dubbo. He opened Blayney Foods and concentrated on building up a major food service business supplying the region.

    "To do that, we had to be unique," says Tanos.

    "We had to look at services beyond just delivering out of the back of a truck. Back in those days it was very much van selling. You loaded up with stock, went out to a customer and said this is what I've got, what can I get you.

    "You were doing well if you had 80 percent of what he needed," he says. "It wasn't an efficient way to operate. At that rate you could only make 16 calls a day. If you didn't get to a customer before the afternoon, four others had got to him first. You sat at the side of road during lunch time and then you hoped when you did get to a business, the boss would be there so you could get paid.

    "I drove those trucks and did the distribution myself for 12 years and grew the business as well. This was important because I understood the customer base. I was the eyes and ears of the business."

    Very soon Tanos realised he needed to change the focus to make the business more efficient.

    "After 12 months we had all of our customers on a sales pre-order system. It wasn't easy, but it was much more efficient for everyone.

    "Every day we had to compete against the corporates just to survive. So we had to get smarter. We set up tele sales with people who specialised in different areas of our range which meant our customers were talking to people who really understood the product."

    In 1987, Blayney Foods took over Streets Ice Cream distribution in the Central West after the company had left the region, which meant adding two more refrigerated vehicles to the existing fleet of three.

    "We had to experiment with their IT and our IT so we could find a way to consolidate it which meant more changes to the way we were doing business," he says.

    "A couple of years after that, we started doing distribution for Barters Poultry. We had already been buying their product and reselling it, now we were distributing to the majors such as Woolworths and Red Rooster. Back in those days I think we were doing about 5000 chickens a week. We thought that was big time. Now it is in excess of 100,000."

    After that, Blayney Foods joined Countrywide, a nationwide business made up of around 100 similar food service businesses with national distribution and a $800 million turnover.

    According to Tanos, this arrangement allows for the pooling of resources within the group to enable the development of IT packages, the implementation of standards such as health and safety and wide ranging operational procedures.

    The Blayney Sealink project will make the small town the largest food warehousing and distribution centre in inland Australia and one of its key components is the construction of a $10 million warehouse facility by Blayney Foods on 68 hectare site adjacent to new rail siding and storage area.

    Last month the NSW Rail Infrastructure Corporation called for expressions of interest from companies prepared to construct and operate the $4 million project.

    The concept took shape after Blayney Foods found it had customers with a need for importing products, unloading and warehousing.

    As Tanos looked into the viability of providing these services, he discovered a new area for potential growth.

    "We were fortunate to be involved with the Federal Government's action agenda for transport logistics," he says. "We took part in some of the set up of the agenda and we found a lot of parallels with what we are doing with Sealink.

    "Overall this will be $100 million dollar investment. The group itself will be investing $36 million over the next three years and we have put $4 million in so far. In 18 months we will have 200 staff and there will be up to 500 on site when the project is operational.

    "The concept of fourth party logistics is what we are about. We are not about operating trains or driving trains but we are about offering our customer the alternative of a number of rail services, not one but a number that will create competition not just for price but competition of service.

    "We are a logistics service. You have a product you want to export and have located an overseas market or you want assistance in identifying that market. We can offer transport, storage, containerisation, four or five rail services or export agents, freight forwarders.

    "It is a publicly accessible. intermodel site. Warehousing, rail, road, freight forwarding, international and domestic markets. The customer can choose what services they want," says Tanos.

    "For importers, they will have on offer warehousing and distribution, supplies held on a national basis through Countrywide wholesalers. We also offer locations for packing companies on this site as well. We will lease property and provide services such as labour.

    Tanos claims the benefits are obvious.

    "Raw material is brought into the area, produced and brought back into this area for freighting out. It is better to do the packing in the intermodel facility than off-site. We are talking primarily export-focussed. On a container you can get 20 percent more weight if we put it straight on to rail, run it to port and load directly on to a vessel. If you have a road leg component in the exercise, you are reduced to road rates of 21 tonnes."

    Tanos is convinced the project will be a winner for all involved saying it will greatly benefit local exporters and boost the economy of the region - which probably won't be a bad thing for ice cream sales.

    The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.

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