DHL-Sinotrans to expand business

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Last updated at: (Beijing Time) Tuesday, October 28, 2003

DHL-Sinotrans to expand business

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DHL, the world's leading express and logistics company, announced Monday that its local joint venture --- DHL-Sinotrans --- will invest an additional US$200 million over the next five years as part of its Chinese expansion plan.

DHL officials said the investment will further boost DHL-Sinotrans' capacity and support the anticipated high growth of the express delivery service in the country.

DHL-Sinotrans will use the money to expand and enhance its existing gateways in Beijing, Shanghai, Guangzhou and Shenzhen, add 14 new regional branches, buy 1,200 new vehicles and recruit more staff, creating up to 2,100 new positions for DHL in China.

Uwe Doerken, chief executive officer of DHL Express, said: "The logistics industry is widely recognized by governments around the world as a critical and strategically important industry. This is no exception in China.

"The astonishing pace of infrastructure development underscores the governments' emphasis on the logistics industry as a driver of economic progress," Doerken said.

"The wide-ranging expansion programme will add significantly to DHL's ongoing investments in China and illustrates the active role which DHL is committed to playing in the country."

FedEx Corp, another global logistics services provider, announced on Friday its expansion plan for China.

The company said it plans to create a separate China business unit in Shanghai in a bid to capture a bigger slice of the country's booming air freight market.

FedEx is adding 100 Chinese cities to its network over the next five years.

"It is just coincidental as the booming China market is attracting every player in the logistics field," said John Mullen, chief executive officer of DHL Asia-Pacific, referring to the timing of his company's announcement.

Doerken said the biggest challenge for DHL is accommodating the rapidly increasing market demand with the usual quality of service.

Mullen said: "DHL intends to stay in step with the needs of our customers in China, where the industry is developing and customer expectations continue to become more sophisticated.

"We maintain the belief that China will become DHL's most important market in Asia-Pacific within the next few years," he said.

"The investment will provide strength to our network, enabling us to support the growth of the market."

The logistics industry in China, fuelled by the growth of manufacturing industries and trade, has grown dramatically in the past few years. DHL has experienced an annual growth of between 35 per cent and 45 per cent during the past three years in China.

DHL's new expansion programme follows recent initiatives to cement its leading position in China, which included the acquisition of a 5 per cent stake in Sinotrans, its Chinese partner, and the offering of overnight freight services between Hong Kong and Shanghai four times a week in co-operation with Dragonair, a Hong Kong-based carrier.

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