German logistics provider Dachser eyes China market
Leading Germany-based logistics provider Dachser Far East Ltd, a subsidiary of GmbH & Co KG, will add new services to sharpen its competitive edge as part of its five-year development plan in China.
The company said yesterday it had set up a wholly foreign-owned enterprise (WFOE) in Shanghai to monitor its business in North China and is applying for another WFOE based in Shenzhen in South China.
“This is part of Dachser’s ambitious investment programme of 1 billion euros (USD1.3 billion) worldwide until 2014 that will position Dachser to continue its dynamic expansion in our key markets including China,” said Thomas Reuter, managing director of Dachser Air & Sea Logistics.
Dachser plans to establish logistics centres in the areas of South China/Pearl River Delta, North and Central China, as well as in Hong Kong, Shanghai, Beijing and Tianjin.
The company also plans to introduce a highly integrated logistics service, Contract Logistics, by 2007. Its Air & Sea logistics service is currently the company’s pillar business in China.
“In the next five years, the plan is to grow Asia’s turnover from 85 million euros in 2005 to 303 million euros by 2011, which is a triple-digit growth of 258 per cent. The Greater China region is expected to contribute 220 million euros in turnover by then. And this is our plan for Greater China,” Reuter said.
Dachser also plans to increase staffing at its operational office in China from 13 to 24, aiming to double the number by 2011.
Last year the company opened a representative office in Chengdu, making Dachser one of the few international logistics companies to step into inland China.
The announcement came as demand rises for logistics services in China as it becomes the world’s manufacturing base, and with consolidation in the logistics market expected. Multinational logistics and postal services providers including DHL, UPS and FedEx are all expanding their presence in the market.
The past three years have seen a series of acquisitions of domestic logistics players by international giants.
“Dachser’s move shows that China has become one of the fastest growing markets for logistics service providers,” said Xu Gang, an analyst with Shanghai-based Tradeworld Consulting Limited.
He added that Dachser’s WFOE in Shanghai and another to be opened in Shenzhen would give the company a competitive edge in the Chinese market.
“Our WFOE licence covers most areas of our current freight forwarding activities as well as a warehousing service,” said Christophe Vincent, general manager of North China Dachser Shanghai Co Ltd.
“We are, without doubt, in China to stay, and setting up WFOEs for our China operations are evidence of our commitment,” said Edoardo Podest, regional managing director of Dachser Far East.
