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DHL invests US$61.2M in APAC

Logistics company's supply chain division aims to grow technical services in Asia-Pacific as part of expansion plans for region over next five years.

SINGAPORE--Logistics company DHL plans to invest 50 million euros (US$61.2 million) in the Asia-Pacific region over the next five years to boost its supply chain division's technical services offering, said company executives at a media briefing Wednesday.

The supply chain arm of the company also aims to double its service logistics footprint in India and China, and expand its operations in Singapore and Japan.

Speaking at the event, Paul Graham, chief executive officer of DHL Asia Pacific Supply Chain, said the investment is part of the company's strategy to grow its value chain beyond its core warehouse and transportation service.

According to Graham, the company has seen a trend where its IT sector customers are looking to outsource more of their non-core activities and consolidate their supply chain.

In a company statement, he noted that the logistics industry is growing at an estimated rate of 25 percent per year. Service logistics, especially technical services, account for up to 60 percent of the overall spend.

"Harnessing the size and scale of our extensive footprint spanning 42 countries and territories in Asia-Pacific, we have a unique opportunity to bridge the market gap between companies offering technical repairs and logistics providers," he added.

DHL's technical services suite covers pre-sales to post-sales activities. Pre-sales activities include the assembling, configuration and customization, packing of retail kits, as well as staging and deployment of products. Post-sales activities encompass call center support, authorized service provider management, and return and repair management.

In the statement, Graham noted that the company has 400 sites in China and 470 in India. Within the next three to five years, DHL plans to double that number in the two growing markets, from the current 15 percent in China and 40 percent in India.

Supply chain challenges in Asia
Kerry Mok, senior vice president, service logistics and technology, DHL Asia-Pacific Supply Chain, told ZDNet Asia on the sidelines that Asia faces different challenges from other regions.

Apart from the large geographical size of the region, key complications for the supply chain market include taxation and customs. Here, he said DHL is able to assist its customers when it comes to importing as the logistics firm has legal entities in target countries and understands the markets.

He noted that intellectual property protection is also important for outsourcing companies as fraud issues arise frequently in the region's emerging markets.

For example, some customers would try to claim on warranty for non-original parts. One of the offerings in DHL's technical services suite include counter-checking warranty claims and product specifications.