Hy-Vee To Expand Chariton Distribution Center

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5/24/2011

FOR IMMEDIATE RELEASE

Hy-Vee to expand Chariton distribution center

Construction on perishable addition, new fueling station to begin in June

CHARITON, IA – Officials with Hy-Vee, Inc. have announced plans to expand the company’s distribution facility in Chariton.

Construction will begin next month on a 108,000-square-foot addition to Hy-Vee’s perishable distribution facility, located just west of Chariton on Hy-Vee Road. In addition, Hy-Vee has received permission from the city to relocate a truck fueling station from its current location at the grocery distribution center on Osceola Avenue to a site at the southeast corner of Osceola Avenue and Hy-Vee Road.

Tod Hockenson, Vice President, Distribution for Hy-Vee, Inc., said the warehouse addition will provide much-needed space to handle more products in the fast-growing areas of produce and frozen foods. Once the expansion project is completed, Hy-Vee will be able to realign its product mix between the Chariton facility and the company’s Perishable Distributors of Iowa facility in Ankeny.

“This product realignment will help us organize shipments in the most efficient and cost-effective manner,” Hockenson said. “We will be able to ensure the proper cold chain from manufacturing through warehousing and transportation to our retail stores. This means we preserve product integrity for the customer and reduce our dependence on dual-temperature trailers, which also reduces our operating costs.”

Hockenson said relocating the fueling station to a new facility will provide more parking and greater ease of access for trucks and allow Hy-Vee to modernize its fueling equipment.

“Both projects will increase the capacity and the functionality of our Chariton distribution campus, which ensures our ability to operate here for many years to come,” Hockenson said.

On May 19, the Iowa Department of Economic Development Board approved Hy-Vee’s application for an estimated $836,817 in financial assistance from the state’s High Quality Job Program (HQJP) to complete the $18.4 million project. The amount of the award is based on a refund of estimated sales, service or use taxes paid during construction, investment tax credits, and a refund of sales taxes paid on warehouse equipment. The Lucas County Board of Supervisors has agreed to provide a 20 percent match of that amount in the form of tax abatement or tax increment financing (TIF) and application has been made to Indian Hills Community College to assist with funding for job training.

The expansion project is expected to create a minimum of 10 new high-quality jobs over the next five years. Hockenson noted that this figure does not include additional employees who will be needed to accommodate Hy-Vee’s sales growth and the construction of new stores.

“We estimate each new store we open creates a need for two to three new distribution center positions to handle the increased product volume,” Hockenson said.

Construction on the new fueling station and the distribution center expansion will begin in June. Hy-Vee plans a ground-breaking ceremony in the next few weeks to mark the occasion.

Hy-Vee, Inc. is an employee-owned corporation operating 231 retail stores in eight Midwestern states. For 2010 the company recorded total sales of $6.9 billion, ranking it among the top 25 supermarket chains and the top 50 private companies in the United States. Visit the company’s website at www.hy-vee.com

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