Amazon defends new Sydney warehouse as ’employment creator’

Amazon defends new Sydney warehouse as ’employment creator’

American e-commerce giant Amazon.com, Inc (NASDAQ: AMZN) has certainly garnered its fair share of fans. The online giant morphed from a garaged online book retailer to one of the largest global companies. All this in the past 2 decades.

This has no doubt been a joyful experience for anyone who has bought Amazon Stock along the way. Just 5 years ago, Amazon Stock were US$443. Today, those same Stock will set you back US$2,759 each.

But Jeff Bezos’ baby has attracted its fair share of critics, too. And that’s perhaps why we are hearing mixed views about the company’s plans to build a new ‘robotics fulfilment centre’ in Sydney’s western suburbs. 

Amazon expands its Aussie footprint

According to reporting in BusinessInsider, the company already has 4 of these ‘fulfilment centres’ (also known as distribution warehouses) in the country. But the new Sydney centre looks likely to be Amazon’s largest investment in Australia to date. The warehouse is set to occupy 200,000 square metres over 4 levels and house around 11 million items. It will be constructed in partnership with ASX companies Goodman Group (ASX: GMG) and Brickworks Limited (ASX: BKW).

The report states Amazon faced past criticism for excessive automation in fulfilment centres, heavily relying on ‘robots’ instead of human workers. Amazon also denied reports of increased rates of worker injury through higher automation levels

These issues seem pertinent to NSW taxpayers with Amazon reliant on NSW government grants to build the centre. The report also quotes an investigation by Reuters, which has found that after initially being operated by human workers, Amazon’s US-based fulfilment centres have been increasingly automated in recent years, which has cost around 1,300 jobs across 55 centres.

However, BusinessInsider quotes Amazon Australia’s director of operations Craig Fuller, who calls the new centre an “employment creator”:

“We know from our experience of launching Amazon robotics buildings in other countries that we actually make jobs. Since we started launching robotic sites, we’ve created around about 300,000 jobs… We still need people to maintain and look after the robots.”

Should ASX investors pay attention?

Despite what you may think of Amazon’s business practises, it looks as though the e-commerce giant is here to stay. Especially as the government has effectively rolled out the red carpet. Whilst many ASX investors may not want to invest in Amazon directly, Goodman Group and Brickworks Stock seem worth another look. Especially after these developments.

REITs (real estate investment trusts) have been on the nose in recent times for ASX investors. But I think investing in the future of e-commerce (as Goodman Group and Brickworks are doing) is a smart path to explore.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns Stock of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns Stock of and has recommended Brickworks. The Motley Fool Australia has recommended Amazon. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Amazon defends new Sydney warehouse as ’employment creator’ appeared first on Motley Fool Australia.

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Author: Sebastian Bowen

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