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Dhl To Grow Revenues In Emerging Markets

By Esther Awoniyi
01 October 2015   |   9:50 pm
Global logistics company DHL, aims to grow the share of revenues generated in emerging markets significantly, with the Sub-Saharan Africa region playing a vital part in this strategy

Hennie-HeymansGlobal logistics company DHL, aims to grow the share of revenues generated in emerging markets significantly, with the Sub-Saharan Africa region playing a vital part in this strategy. It hopes to achieve this under the leadership of its newly appointed CEO for Sub-Saharan Africa, Hennie Heymans. CNBC Africa’s Esther Awoniyi caught up with him on the company’s plans for the region.
Awoniyi: Give us a brief background to the company and what has been done in Africa.
Heymans: We have been around on the continent since 1978 and with that comes a whole lot of experience and know- how and understanding the intricacies of how businesses operate in Africa. Certainly, we’ve made a whole lot of significant investments over the last 12 months and we will continue with those investments for a foreseeable future.

Africa is certainly the last continent that will provide the kind of growth that the world is looking for which means that we will see more Foreign Direct Investments(FDI) coming into the continent and with more FDI, there would be more opportunities from a logistics perspective. In simple terms, we will continue our investment on both plants and facilities across the internet for the remaining part of this year and certainly going into 2016.

Awoniyi: Specifically, I want to know what you will be doing differently from your predecessor.
Heymans: A continuation of what’s been started a couple of years ago, the starting point is the investment in people, our organization is all about the people. Looking over the market and understanding where the growth points will be. I am absolutely convinced that the growth would be a consumer-lit growth on the continent and as a result, the strategy would certainly concentrate on making sure that we make ourselves available, not only just to the corporate organizations but also the small businesses so typically also the SME users.

Looking at the change that started, eighteen months ago, we had less than 1500 retails points around the continent, today, we’ve got an excess of 4,800. So it’s important we make ourselves available to the smaller companies. There is still enormous potential within smaller SMEs in some markets in Sub-Sahara, so we agree to aggressively pursue our retail points and investments in our facilities across the continent.

Awoniyi: How much exactly is being invested? I know that DHL holds a very optimistic view of growth in Africa this year, perhaps even Sub-Saharan region but we’ve seen even softer growth, does that in any way change your strategy or sentiment?
Heymans: Actually, not. Infact, it is confirming that the strategy we are following in terms of making ourselves more available for the consumer-lit growth is the right strategy to follow.

Africa has gone a little soft as a result of the drop in commodities across the continent and that is therefore more important for the corporates and organisations like ourselves to make us more existable for the consumer-lit growth that would follow. Investment has been aggressive. 2015 alone has seen us invest an excess of 17million euros and what I can’t tell you is the plans for next year but we have more investments still to come from our perspective.

Awoniyi: You talked about 17 million euros investment in Sub-Saharan Africa. Tell us how much has been spent so far and how much is being distributed across the Countries that you have key interests in.

Heymans: I think it has less to do with Countries but specifically to making sure what we offer across the continent is part of our global network and it is also specific to make sure that what we have available in Africa from our technology perspective links in with what is available in the rest of the world. We have recently rolled out the use of 400 brand new scanners across Africa and those are now very similar to the scanners that you find elsewhere in the world, which means from a technology perspective, Africa is on an absolute par with what is being used elsewhere in the world.

There are two major benefits to that- the first is that we can process shipments a lot quicker and also means that we have access to live data a lot quicker which means that our customers regardless where they may be based in the world would have access to the data with regards to this shipment which is a lot quicker.

Awoniyi: Talking about the Logistics business, DHL has been in Africa for about 37 years now and you have made heavy investments and you are a known market leader in this field, how do you see it evolve in the next 5-10 years and what would be the key catalyst or factors that will shape or reshape this industry?

Heymans: I think there are two things, the first is connectivity- Connectivity across the continent is still a big challenge for us and a lot of focus and investment should go into that part of logistics. Secondly, we need to look at some of the stumbling blocks in Africa and in particular, we have to look at some of the difficulties we have in terms of infrastructure- Road infrastructure in particular, infrastructure of taxonomy, the custom points that we have across Africa, that would need a political wall to make sure that we want to make ourselves more existable to the world and if we could combine those two, Africa will have a fantastic growth period lying ahead.

Awoniyi: What are the biggest challenges that you see ahead that are specific to DHL and how do you plan to surmount them?

Heymans: From a connectivity perspective, we would spend a lot more around that particular area of our business be it via air or road, I think there is still a big opportunity for us to further improve on what we already have and secondly, to build partnerships at Governmental and official levels to makes sure that we pull back some of the experience that we have across the world to make sure that we have our orders a lot more accessible not only just for the consumer-lit market but also for investors that are looking towards this continent to come and invest in further growth for Sub-Saharan Africa.

Awoniyi: Speaking of our growth, we know that infrastructure remains a huge challenge although we’ve seen some significant investment, but Africa is not fully quite there in terms of ensuring that this problem is solved but are you optimistic that African economies would continue to devote their time and monies to building infrastructure and also in attracting private capital to help close that infrastructure gap?

Heymans: Yes, I am absolutely confident that this would happen. We have already seen lot of investment in that and part of this investment would drive the consumer growth as technology becomes a lot more available and cheaper for sub-Saharan Africa and also see that things are changed in the political wall across the continent. There are a number of countries that are going through customs upgrade and modernization projects and all of that is building wealth for the growth of this continent.

Frankly, it is also more about us leading this growth- looking at the history of Africa, five or seven years ago, it was a forgotten continent, the password at the moment is Africa-rising and I think that perspective should be shifted to say; Africa must start thriving and it is up to us to make sure that -that indeed takes place over the next five years.

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