Deutsche Post DHL‘s EUR 700 million deal to grow supply chain operations in China

Deutsche Post DHL Group has entered into a deal that will transfer its supply chain operations in China to S.F. Holding, a leading premium logistics service provider in the country.

The joint capabilities of Deutsche Post DHL Group and S.F. Holding will create a unique platform to meet the need for a high quality end-to-end supply chain provider in China.

Commenting on the partnership Frank Appel, CEO Deutsche Post DHL Group said: “S.F. Holding’s local market expertise in China has real advantages for our customers across all industries including technology, healthcare, retail, automotive, and e-commerce. Combined with our global operations standards and network support, the agreement provides a solid foundation to continue exploring further opportunities in China in the coming years.”

The transaction involves the supply chain business in Mainland China, Hong Kong and Macau, herein after referred to as “China”. This has no bearing on Deutsche Post DHL Group’s business activities in international express, freight transport and e-commerce logistics solutions in China.

As part of this strategic deal, Deutsche Post DHL Group will receive an upfront payment of RMB 5.5 billion (approximately EUR 700 million) and a revenue-based partnership fee over the next ten years. S.F. Holding will have access to Deutsche Post DHL Group’s best-in-class supply chain services, management expertise, transportation and warehousing technology.

The co-branded organisation will operate under the leadership of Yin Zou, the current CEO, Greater China of DHL Supply Chain, along with his existing management team.

This strategic partnership will allow Deutsche Post DHL Group to continue to participate in the fast-growing Chinese supply chain market, leveraging S.F. Holding’s extensive domestic infrastructure, distribution network and broad base of local customers. This will accelerate the expansion of the co-branded organisation’s customer base. Deutsche Post DHL Group is committed to enhancing the organisation’s product and services offering by providing the breadth of its global supply chain expertise.

Dick Wong, Chairman, S.F. Holding commented: “S.F. Holding has been actively expanding its business-to-business (B2B) capabilities and pursuing different strategic partnerships to grow S.F. Holding into a truly integrated logistics solutions provider that delivers best-in-class services for our clients. This partnership agreement will strengthen our capability in providing supply chain services to a diverse realm of industries and allow us to bring world-class management expertise into our supply chain business operations, enabling us to further understand and tailor to our customer needs.”