DHL is investing $15m (€10.2m) in its logistics infrastructure in Asia, increasing capacity in India to meet demand for supply chain services that are in compliance with stricter regulatory and quality requirements.
The third-party logistics (3PL) market in India is currently at an early stage of its development but will grow from $1.5bn in 2008 to $4bn in 2012, according to RNCOS. DHL believes gaps in the existing supply chain infrastructure are a factor in the increasing outsourcing of 3PL.
In particular a tightening of the regulatory and quality regulations has created demand for temperature controlled handling and storage, improved product transparency and end-to-end logistics capabilities, according to DHL.
Expansion of India’s pharma industry will also play a role in the growth in demand for 3PL. DHL believes production in the country has a compound annual growth rate (CAGR) of over 40 per cent, being valued at $2.5bn by 2010.
This is because India has “established itself as a preferred destination four outsourcing drug discovery, clinical research and manufacturing”, according to DHL. To serve this growing market DHL is constructing life science competence centres in Mumbai and Hyderabad, India.
Site in Singapore
Some of the $15m investment will be used to construct a logistics centre in Singapore, which DHL views as a “key transportation hub” for receiving pharma products from major manufacturing sources.
These products can then be stored and distributed to Asia, the US and Europe. Singapore’s status as a key transport location is underpinned by its proximity to Asia’s major shipping lanes and its high-volume regional airline hub.
Furthermore, Singapore has made significant investments to develop its life science industry, with the recent push to attract biologics manufacturing resulting in Lonza establishing a facility in the country.
The construction of a life science competence centre in Singapore builds on DHL’s existing offering in the country. DHL already offers its door-to-door service that provides track and trace, specialised handling and packaging that maintains a temperature of 2°C to -20°C.