DHL invests $15m in Asia

By Nick Taylor

- Last updated on GMT

Related tags: Supply chain management, Compound annual growth rate, Logistics

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.

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