DHL Supply Chain, the world’s largest contract logistics service provider, is investing another 113 million euros ($141 million) in China to further develop its business, after enjoying steady double-digit growth.

The 113 Million Euro Investment

The new investment, added to an injection of 105 million euros in 2013, brings its total commitment in the country to 218 million euros, making China one of its most important country globally.

Oscar de Bok, chief executive officer of DHL Supply Chain Asia Pacific, said that by 2020 DHL expects to have set up another six logistics centers in Guangzhou, Hangzhou, Wuhan, Shenyang, Shenzhen and the China Pilot Free Trade Zone in Shanghai, bringing its total national warehousing capacity to 1 million square meters. He attributed the rapid business growth across emerging markets including China to the rise of the middle class who he said now demands more sophisticated logistics services.

“By working closely with our customers who provide us with their demand forecast, we have a clear roadmap of the locations we need to be in; as well as the level of the services required. In China alone, DSC will expand its warehouse facilities and transport capacities by 50 percent over the next three years.”

DHL is expecting China’s automotive, life sciences and pharmaceuticals industries to be the focus of its activities in coming years, the last two being driven by the nation’s fast growing medical reforms, said de Bok.

With operations right around the world, DHL is using its global reach, he said, to offer customers in China a complete point-to-point delivery service without having to depend on any third-party operators.

Focus in Western China

The company plans to expand into the west of the country, particularly, in the next few years, a strategy already partly realized with the opening of its Chengdu logistics center earlier this year.

The 54,000 sqm centre operates scalable, repeatable solutions for multiple customers across a broad spectrum of industries including technology, consumer and healthcare; and delivers significant synergy benefits in terms of cost, quality and performance. The new facility also acts as a multi-user cross-dock to support the effective and efficient transportation of products across the Western region.

Zou Yin, managing director of DHL Supply Chain China, said: “One of the reasons for setting up this center was that some of our customers had moved their manufacturing centers to the city, where they are enjoying excellent infrastructure facilities.

“Chengdu is very likely to become one of DHL’s global distribution centers.”

The company is giving similar importance to its Shanghai FTZ operation which it plans to use as a focal point for international business, as well as acting as a future regional and global center, said Zou.

Source: Chinadaily.com.cn

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