Companies

DHL to expand in western China

By Zhou Siyu (China Daily)
Updated: 2011-06-01 09:40

China's robust market has attracted a large amount of investment from DHL Express. Its North Asian hub in Shanghai, a $175 million investment, is under construction and is expected to ease the capacity strain on its Hong Kong hub. [Photo/Agencies]

HONG KONG - Deutsche Post-DHL's express division will continue expanding its investment in China, especially in the western region, said Ken Allen, chief executive of DHL Express.

"Our business there is growing faster than the rest of the country. We always keep the investments ahead of the demand curve," Allen said, without disclosing further details, in an exclusive interview with China Daily.

Wu Dongming, managing director of DHL-Sinotrans International Air Courier Ltd, a joint venture in charge of DHL's express business in China, said notable business growth was seen in cities in the western and central regions, such as Chengdu, Chongqing and Wuhan.

To meet the growth in business volume, the company will consider scheduling more flights to connect Chengdu and Chongqing with its central Asian hub in Hong Kong, Wu said.

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"It's all because the growth continues, and we have to add capacity to the market," Allen said.

China's robust market has attracted a large amount of investment from the company. Its North Asian hub in Shanghai, a $175 million investment, is under construction and is expected to ease the capacity strain on its Hong Kong hub, Allen said.

"Once the North Asian hub opens up, we will be looking at more direct flights out of Shanghai into the key Asian markets," he said. "It is going to be a big boost to our business overall in China."

The company reported 216 million euros ($311.5 million) in pretax profit during the first quarter, compared with 110 million euros during the same period in 2010 and a 392 million euro loss in the first quarter of 2009.

However, as China is keen on improving its economic and trade structure, its rapid GDP increase is estimated to slow to less than 8 percent this year and imports and exports are also expected to decline.

Since the beginning of the year, trade growth has declined, compared with 2010.

China's exports in April rose by 3.4 percentage points over those in the first quarter, but imports dropped by 10.8 percentage points, according to the Ministry of Commerce.

DHL remains confident about China's performance this year. "Maybe the overall growth rate of the Chinese economy is going to slow down a little bit, but that's still going to make it one of fastest growing markets in the DHL network," Allen said.

"Some of (China's) export figures have slowed down a little bit, but we have seen our business holding on very well," he added.

Between January and April, revenue in China's express industry jumped by 25.7 percent year-on-year to 21.42 billion yuan. The overseas express business accounted for 26.9 percent of the total revenue, according to China's State Post Bureau.