Mercury Business Report, Friday, 31 October 2014
DHL, the global logistics and transportation company which is part of the Deutsche Post group that generated revenues of more than €55billion (R760bn) last year, has invested €30 million in its supply chain and global forwarding divisions in South Africa. The investment signals DHL’s long-term growth plans for the continent and its intention to use South African assets as a logistics hub and spring board into the rest of Africa.
The investment was in two facilities in Plumbago Business Park close to OR Tambo International airport, which were launched yesterday. About €16m has been invested in 12 000m2 of warehouse space and 5 500m2 of office accommodation for DHL Global Forwarding, a leading provider of air, sea and road freight services. A 25 000m2 multi-user warehouse facility has also been built for DHL Supply Chain’s operations for €14,5m, which will be used to consolidate DHL’s technology client portfolio and some key fast moving consumer goods clients.
Twine Mtya, the chief executive of DHL Global Forwarding Southern Africa, said yesterday the investment had been made in South Africa because it was in the consolidation and upgrading of existing facilities DHL had in the country. Mtya stressed that through the investment in a world-class facility, DHL was positioning itself to be a regional hub for exports to other parts of the continent. “South Africa is a key hub for customers to get access to the markets in Africa.” He said the new investments were also necessary to support their growth and expansion plans in South Africa.
“In addition to our established air and ocean freight services, we have seen particular growth in our robust inter-modal road network, spanning 12 African countries. Road freight volumes have more than doubled in the past year, spurred by increasing demand and economic growth on the continent.” Myta said the bulk of the investment was in buildings but investments had also been made in technology in the warehouses to increase efficiency, speed up the flow of cargo and provide good visibility of the cargo being handled.
Investments had also been made in a solar energy system to reduce energy consumption and in new information technology to reduce the need for paper to reduce DHL’s carbon footprint, he said.
Roger Crook, the chief executive of DHL Global Forwarding and Freight and a member of the board of management at Deutsche Post, stressed the importance of Africa and the merging economies for the group’s future. “Part of our global three pillar Strategy 2020 is to focus on further expansion of logistics services in the world’s emerging markets. Today, emerging market revenues contribute just over 20 percent of the group’s revenues. By 2020, the group expects this figure to climb to 30 percent,” he said.
Craig Roberts, the chief executive of DHL Supply Chain for Middle East and Africa, said it was implementing international best practices at the Plumbago Business park facility and this would become the model for other facilities across the country. Roberts said the investments were long-term in nature and reflected DHL Supply Chain’s commitment to Africa. “We have an ambitious growth strategy for this region and intend to use our South African assets as a springboard into the rest of Africa.”