DHL to spend S$50m on Asian expansion
DHL to spend S$50m on Asian expansion
SINGAPORE (Reuter): Air express company DHL Worldwide Express said on Thursday it will spend Singapore $50 million (US$35.5 million) to expand in southeast Asia this year.
Company officials also told a news conference that DHL's original core business in documents is seeing strong growth despite the revolution in electronic communications.
The investment includes S$16 million ($11.36 million) to be spent in Singapore on expansion of two service centers, a Changi Airport hub, an express logistics center, handling equipment and telecommunications, said Charles Chia, general manager of DHL Singapore.
Other investments include a Manila hub, an airside facility in Kuala Lumpur and an express freight handling center in Jakarta.
DHL plans to spend S$70 million ($49.7 million) in southeast Asia between 1996 and 2000, said Chia.
Chia said DHL's documents business is growing robustly despite industry predictions that about 30 percent of all documents will be replaced by faxes, electronic mail and other technologies.
"Many believe documents to be a sunset product, (but) we have not seen a declining growth. We have managed to penetrate new market segments and find substitutions for what has been lost to electronic media," said Chia.
The Internet revolution is, to an extent, helping the air express industry, said Colman Ridge, regional marketing director.
"Internet, international banking and electronic commerce are increasing the level of trust and confidence in international marketing by SMEs (small and medium-sized enterprises)," said Ridge.
"What we sacrifice in terms of a few lost documents is being returned in a million new packages. All of us are benefiting from that," said Ridge.
"People still have a high reluctance to e-mail or fax anything over 20 pages," said Ridge. "Then there's also the human factor -- people just want to have the hard copy."
DHL Singapore's documents business grew by 31 percent in volume in calendar 1995, said Chia. Its packages and express freight business grew by 68 percent in volume.
In southeast Asia, its documents business grew by 23 percent while its packages and express freight increased by 66 percent.
DHL has a 38 percent share of Singapore's S$300 million air express market, said Chia. The company expects to grow by more than 25 percent this year, against a forecast of industry growth of about 20 percent, he said.
DHL this week launched its Jumbo Junior box, for flat-fee shipments of up to 10 kilograms, in Singapore and Malaysia. The box will be launched soon in other Asian markets, said Chia.