Deutsche Post’s logistics pillar, DHL, confirmed investments of about €47 mn in Sub-Sahara Africa. As announced by DP’s CEO Frank Appel during a recent biz trip to Nigeria and South Africa, emerging markets like those he visited will play an increasingly important role in his group’s growth "Strategy 2020." This includes the strengthening of air services at selected regional African hubs.
During several meetings with local clients and DHL executives in Nigeria and South Africa, Frank Appel stressed the importance of the continent for the further development of Deutsche Post DHL
Group’s revenue. Currently, "emerging markets contribute over 20 percent to our group’s revenue, but by 2020 the group expects this figure to climb to 30 percent."
Focus on Emerging Markets
On the occasion of his stay in Johannesburg the CEO stated that his company will continue to concentrate on organic growth by investing in promising present and future markets.
Regarding the vast Sub-Sahara region Frank stressed that South Africa is the number one place on the continent to be for DP/DHL due to a developed economy and the country’s exceptional geographic location as a primary gateway to Africa.
Nigeria on the other hand, with its fast growing gross domestic product and increasing consumerism, is another highly attractive place to expand his company’s footprint, the Hamburg-born executive added.
Major Investment Program
Appel confirmed significant investments, in excess of €17 million in Sub-Sahara Africa, by DHL Express, where the integrator already operates across 51 countries and territories.
In South Africa investments by both DHL Supply Chain and DHL Global Forwarding, total €30.5 million. More than half (€16 mn) of this expenditure will be spent to build a TAPA "A" certified cargo terminal offering 12,000 square meters of warehouse capacity and 5,500 sqm of office space. The new "world-class facility" (according to the Deutsche Post) located at South Africa's Plumbago Business Park will be utilized mainly by DHL GF, the forwarding unit of the logistics giant.
Expansion of Air Operations Expected
Deutsche Post’s growing activities in the Sub-Saharan region will inevitably lead to an increase in air services on intra-African routes as well as intercontinental connections.
DHL’s main air hub is Lagos where 15 dedicated freighter aircraft, owned by DHL Aviation, are currently based. In total, incl. partners, there are 280 daily flights throughout the region for distributing express shipments but also standard consignments.
In addition, DHL utilizes the holds of passenger aircraft offered by a large number of commercial carriers like Brussels Airlines, Lufthansa, Emirates, British Airways/IAG or Air France-KLM, serving Lagos and the neighboring countries for a fast transport of goods on the major trade routes between Europe or Asia and Sub-Sahara Africa. In Johannesburg, DHL Aviation's fleet comprises 4 freighters, which together with partnering airlines operate more than 70 commercial flights per day.
It can be expected that these air services will be upped considerably once the investments announced by Appel come to fruition.
Heiner Siegmund / Michael Taweel