German air express and logistics giant DHL will invest more than
US$110 million in China over the next few years to maintain its
leading position and to capitalize on the country's continued
growth in trade, the courier announced yesterday.
The investment will be used to expand infrastructure, including
more transport vehicles and service center equipment, and for
training its employees.
The announcement was made by Klaus Zumwinkel, board chairman of
Deutsche Post World Net, DHL's parent company, during his latest
North Asian trip.
Zumwinkel early this week announced investment commitments of
over US$90 million for Japan and US$75 million for South Korea.
The new investment is a key initiative for DHL to enhance its
position in Northeast Asia, which will be the fastest growing
transportation market in the Asia-Pacific region by 2020.
DHL is considering setting up a North Asia hub in either
Shanghai Pudong International Airport or Incheon International
Airport in South Korea.
An announcement on which airport is selected will be made by the
second quarter of this year, said Scott Price, CEO of DHL Express
Asia-Pacific.
"There is still one last filter of analysis to do. It is a very
close race between the two (airports)," Price said.
DHL will make its final decision according to two factors speed
and cost.
The speed consideration includes the ability to secure the
correct air timing, customs flexibility and efficiency, and the
availability of a bonded area to allow goods to move in and out
quickly. New facilities are also evaluated by labor and
construction costs, and tax benefits.
DHL currently has a Central Asia hub in Hong Kong and South Asia
hub in Singapore.
The company's United States rivals, FedEx and UPS, both have
plans to build regional hubs in China. FedEx, previously based
mainly in the Philippines, will launch a new Asia-Pacific hub in
Guangzhou Baiyun International Airport in 2008.
UPS signed a memorandum of understanding with Shanghai Airport
Group last year to establish the UPS International Air Hub at the
Pudong airport.
China is one of DHL's fastest-growing markets, accounting for 25
percent of its revenue in the Asia-Pacific and 10 percent of its
global sales.
DHL has maintained an annual growth rate of 35 to 45 percent in
China in the past years and has set up 73 branches, making it the
largest network among international express delivery firms in the
country.
(China Daily February 15, 2007)