Eyeing growth, DHL invests Sh1.9bn in regional freight hubs

Cargo processing point at the DHL JKIA offices. YVONNE KAWIRA |

What you need to know:

  • His plan is to open up the international market to DHL’s local business. He also seeks to tap into regional investments to help grow the Kenyan outlets.
  • Mr Mutuma said this will be instrumental in boosting the Kenyan business by speeding up cargo transport from abroad into the continent and through to Kenya.

Global transport firm DHL Express plans to use over Sh1.9 billion to upgrade its freight centres and shipment handling systems.

The investment comes as DHL Express sub-Saharan Africa renews its focus on emerging markets. Last month, Mr Frank Appel, Deutsche Post DHL Group CEO toured Africa, a market where the company makes slightly over 20 per cent of its revenue.

By 2020, it is projected that the figure will rise to 30 per cent as the company’s business in Kenya, South Africa and Nigeria improves.

Already, DHL has employed a Kenyan to oversee its local operations, even as it pumped Sh200 million to upgrade its centres in the country. “We are working on putting retail outlets in Lamu, which is the new centre of logistics as Lamu Port South Sudan Ethiopia Transport corridor takes shape,” said DHL country manager, Mr Andrew Mutuma, last week.

Mr Mutuma, who took over from Mr Alan Cassels on August 1 following the latter’s retirement, is the first Kenyan to be appointed to the post. Mr Mutuma has worked in the oil business for over 10 years. He has also worked at Nokia International, the British Council and Cargo Agent.
Speed transport

His plan is to open up the international market to DHL’s local business. He also seeks to tap into regional investments to help grow the Kenyan outlets.

South Africa for instance has a new, world class Sh1 billion freight centre at the Plumbago Business Park. The centre has 12,000 and 5,500 square metres of warehouse and office space respectfully.

TRIPLE

Mr Mutuma said this will be instrumental in boosting the Kenyan business by speeding up cargo transport from abroad into the continent and through to Kenya. He projects that air, ocean and road freight business will triple as new investments are made in the region.

The new investment by DHL signals the group’s long-term growth plans for the region as it brings state-of-the-art infrastructure, IT systems and world-class services to support businesses in Africa.

“The facility plays a big role in strengthening the country’s growth capabilities as the hub for distribution in the region. It puts Kenya in a position to enhance its business opportunities,” said Mr Mutuma.

He also welcomed competition in the postal and courier business, adding that their entry will see other companies step up their services.

DHL Express Kenya was set up in 1979 with its head office in Nairobi. It now has shops in Mombasa, Kisumu and Nakuru. The local enterprise is complemented by subsidiaries in over 220 countries.

The global subsidiaries in US, UK, Uganda, Tanzania, South Africa, China, India and United Arab Emirates usually act as trade lanes for DHL’s Kenyan business.

To supplement its Kenyan arm, DHL has deployed 16 more vehicles and motor cycles. More machines (conveyer belts) have been put in place to automate the processes by reducing work load for couriers.

It has, however, not been a smooth ride for DHL all along.

“There are very stringent government legislation that sometimes tends to hinder business,” said Mr Mutuma, adding: “An example is the current requirement by Kenya Bureau of Standards, which forces customers to bring in goods in batches of only half a million, making it more expensive.”