DHL sees potential in Philippine market
PENANG, MALAYSIA — DHL Supply Chain is seeing opportunities in the Philippine market where the retail sector is starting to gain momentum, its top official said.
“I think the Philippines for us, as a market, brings many opportunities,” Andries Retief, DHL Supply Chain Chief Executive Officer for Southeast Asia, said in a media interview in Penang, Malaysia, on Tuesday. “I think the [country] as a market holds potential for the future.”
Mr. Retief cited as an example the Philippine retail market, which he said is now “starting to get some momentum.”
“If you look at the Philippines and look at the different prominent sectors, then you will look at things like obviously, the retail and consumer sector.”
“The semiconductor technology sector — that is also our expertise as DHL,” he said, adding that “semiconductors and retail [are] very well established over many markets, specifically in the Philippines.”
“Those are probably the two main areas,” he said.
Apart from retail and technology, Mr. Retief said that DHL Supply Chain is also keeping an eye on opportunities in other industries.
“There are other industries in the Philippines that we keep looking at: automotive, energy and mining, and so forth,” he added.
In the Philippines, DHL Supply Chain has about 280,000 square meters (sq.m.) of warehouse space, 20 facilities, and 30 customers to date.
Mr. Retief said that the firm expects to see more customers. “We continue to add more customers, that number we believe will grow. If you invest in the space and the people and the technology, then those customers will be there. And there is a need, we can tell from the market in the Philippines and Indonesia.”
DHL Supply Chain earlier announced it is investing €80 million in the Philippines over the next five years, which would include the development of two new facilities.
This includes the Sta. Rosa Logistics Hub, a 50,000 sq.m. built-to-suit warehousing storage.
The investment is also expected to create 1,000 jobs by 2024, mainly related to warehousing and transportation.
Depending on demand, Mr. Retief also sees the possibility of expanding its built-to-suit warehouses in the country.
“It depends on which customers or which sectors we see fit for those buildings specifically. When we [chose] the built-to-suit in Sta. Rosa, it’s because we have a clear idea of which sectors or which parts of the market we want to target to include there, and we can ‘built-to-suit’ those. That’s likely to be the case for the future, but there might be some exceptions,” Mr. Retief said.
“I think what’s maybe more important than if it’s built-to-suit is to say, is it built in a way that supports our focus on carbon neutrality? These are carbon-neutral buildings and the size of those investments in the Philippines is quite large,” he added.
DHL Supply Chain may also consider developing more bonded warehouses in the Philippines.
“[It’s] a service we continue to focus on offering to our customers. We will increase those as the demand is there,” he added.
Meanwhile, Mr. Retief also said that automation in the Philippines is not as far-fetched as expected.
“There is a perception, and I think that’s the wrong perception, that says because you’re in the Philippines or Indonesia, you can’t drive automation, you can’t drive digitalization. I don’t think that’s true,” he said.
“If you are committed to a market for the long term, which at DHL Supply Chain we clearly are, then digitalization and automation is non-negotiable. The key to making sure you get that right is saying where are the non-value-adding activities? Every market, every operation has activities that are not adding as much value as others,” he added.
DHL Supply Chain’s €80-million investment in the Philippines is part of its €350 million commitment in Southeast Asia. Malaysia will receive the biggest share with €131 million, followed by Singapore (€104 million) and Indonesia (€35 million). — Luisa Maria Jacinta C. Jocson