The world's largest logistics provider has predicted double-digit growth for its business in the Gulf.
DHL bullish about future in region
DUBAI // The world's largest logistics provider has predicted double-digit growth for its business in the Gulf despite warnings of a regional economic slowdown and was planning to invest US$150 million (Dh550m) over the next three years, a senior executive said yesterday. DHL plans to open a 75,000 square feet logistics facility at Dubai World Central, the aviation and logistics hub which is being built around Al Maktoum International Airport.
"We have plans to invest there and we want to go there in a sizeable way," said Hermann Ude, the chief executive of DHL Global Forwarding, freight. Mr Ude refused to say how much the firm was planning to invest in the logistics facility at Dubai World Central. "We don't know the cost yet, but we will be there when the new airport opens for traffic," he said. Economies around the world are suffering from the global financial crisis and concerns surrounding credit availability, which is restricting growth. The slowdown has also affected the freight and forwarding businesses. Mr Ude said DHL had cut its revenue projection targets in several regions and was seeing a fall in its forwarding business, especially in the technology sector.
"We are however, very confident about this region," he said. "We are positive regarding growth and we believe we can compensate for a lot of shortfalls in the volumes here with new products and adding new sectors. "There is a prediction of a slowdown in growth, but we have not changed our revenue targets for the GCC." Mr Ude said the economic downturn had forced DHL to reduce its revenue targets on the trans-Pacific, trans-Atlantic and Asia-US sectors, and a slowdown was already evident.
Danzas AEI Emirates, a joint venture between Dubai-based Al Tayer Group and DHL Management, a subsidiary of Deutsche Post World Net, yesterday launched a Dh185m multi-purpose logistics facility in Dubai's Jebel Ali Free Zone. The 80,000 sq ft facility is the largest of its kind in the Middle East. "An increasing number of companies from diverse industries, including life sciences and the automotive and technology sectors, have chosen Dubai as an alternative production and logistic base," Mr Ude said, adding that the growing number of customers was driving the firm to invest more in infrastructure development.
He said the Gulf was ideally positioned with access not just to Europe, Africa and Asia, but also to rapidly developing economies such as the Indian subcontinent and its vast manufacturing output. "Dubai, by virtue of its location, has become a vital point for freight and forwarding of goods from Asia to Europe and Africa and we would certainly want to consolidate our position here," Mr Ude said. "If Dubai continues to spend the way it is spending right now on development, it will eventually develop a structure for the whole of the UAE, serving multiple purposes for logistics operators."
Mr Ude said the firm intended to develop more multi-purpose facilities in the region, expanding its services and forwarding road network and connecting them to DHL's main hubs. "We have a five-year investment plan, but we are investing far ahead of that due to growing customer needs," he said, adding that developing human resources and investing heavily in training and developing talent was more important to the company.