DHL invests additional $5-M to expand RP operations

Global air express industry leader DHL Worldwide is spending an additional P260 million ($5 million) in the Philippines to expand and upgrade its facilities here.

The company unveiled yesterday plans of increasing its investments here, including the upgrading of its gateway facilities at the Manila International Airport, the setting up of additional full-service centers in the areas of Old Manila, Metro South, and Metro North, as well as several new express centers to be strategically located around Metro Manila and Cebu.

Around $5 million will be added to its existing $15-million investent in its Philippine operations.

Company officials said they are refurbishing their gateway facilities at Villamor, which receive, process, sort, and send out mail and parcel. The upgrading will focus on the IT infrastructure.

DHL has a 38- to 40-percent share of the Philippine market, where there are around three or four major players. In the Asia Pacific region, it has a four- to 4.5- percent market share, again in a playing field dominated by four players. Globally, it has a 37-percent share and serves the requirements of around 90 percent of the Fortune 500 companies.

The company hopes to introduce a number of value-added products this year, and sees, a huge potential in the Philippines for its newest service – express logistics — which will allow local companies to gain competitiveness advantage through supply chain management (SCM).

It is also unveiling very soon another new product – temperature controlled packaging for the pharmaceuticals industry.

In an interview, DHL Asia Pacific business acquisition support group manager Frits de Vroet said that they are targeting for the region eight industries for this new service – electronic components, semiconductor, precision engineering (such as Siemens and General Electric), automotive, pharmaceutical, financial institutions, fashion, and telecommunications.

Express logistics is a relatively new type of service, introduced by DHL worldwide around five years ago and in the Asia-Pacific region, in the last three years.

By leveraging DHL’s four regional distribution centers, 100 strategic parts centers, its core transport network, skills and people, information technology systems, and logistics call response center, the company aims to provide added value to its customers by helping them redesign their logistics and make it a driver of competitive advantage.

De Vroet explained that current logistics approaches in companies, especially service organizations, are fragmented. For instance, field engineers do their courier work by picking up the parts, some of which get lost in the process, and sometimes ordering too much resulting in excess inventory. "We take away the physical part of of fulfilling the orders," he said. Right now, this job is done by the manufacturing organization itself of by a service provider.