DHL continues to deliver the goods in China

09:13, December 15, 2010      

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Despite concerns over a slowdown in China's economic growth, Deutsche Post DHL, a leading global provider of logistics services, remains confident about its future business expansion and is optimistic about the country's performance, said Larry Rosen, chief financial officer of the company, on Tuesday.

"With its growing importance in the region and the world for trade, China is an essentially important market for us. For the foreseeable future, we see growth rates in the high single-digit to low double-digit range from next year," Rosen said.

China's GDP grew by 10.6 percent year-on-year during the first three quarters of this year. Meanwhile, during the first 11 months, the country's overall trade volume shot up by 36.3 percent year-on-year, with exports and imports hitting a record in November, official figures showed.

As China undergoes economic restructuring, the GDP growth rate is expected to decelerate to around 8 percent for a more balanced development, in addition to putting downward pressure on the country's high consumer purchase index of 5.1 percent, said economists.

Yet, according to Rosen, the dynamic nature of the world's second-largest economy means China is still expected to outperform the company's other major markets.

"It is such a big a market, which means that, (even with a minor slowdown in economic growth), in absolute terms, the market is growing so much every year. In our home market and other major industrialized markets such as the United States, we see single-digit growth, whereas we see twice as much growth in China and other parts of Asia," Rosen said.

The company has seen an overall revenue increase of 11.2 percent year-on-year for the first nine months of this year, with China "as one of the most important elements".

Express parcel delivery and supply-chain services, two of the company's business divisions, are the major contributors to its revenue growth.

"We continue to be positive about our full-year 2010 performance. Overall, we expect an operating income (earnings before interest and tax) of about 2 billion euros ($2.7 billion) for this year, and much higher net income in 2010 compared with 2009," he said.

To boost revenue, the company will focus on sectors including healthcare, technology and energy, which are important to all its business divisions, he added.

Given DHL's strong presence in China, Rosen said mergers and acquisitions policy will concentrate on small- and medium-sized domestic companies to complement the company's growth.

In the meantime, DHL is building its North Asia hub in Shanghai, an investment of $175 million, which is due to be completed in the first half of 2012.

Currently, the company has a total of 15,000 employees in China alone, making up a quarter of its staff in Asia, and the number is growing year by year, according to Rosen.

The key factor for a growing business is to accumulate a "talented and motivated workforce", he said.

Source:China Daily
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