Kingdom sees big demand for logistics, mail services

Updated 13 October 2012
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Kingdom sees big demand for logistics, mail services

DHL Express, a leading logistics and express mail services company, has announced an ambitious plan to invest more than $20 million in Saudi Arabia to better tap into the country’s growing demand for logistics and mail services.
The investment will be used for opening two new gateway terminals at the King Khalid International Airport (KKIA) in Riyadh and at the King Fahd International Airport (KFIA) in Dammam respectively besides building other infrastructural facilities for the company.
The announcement was made by Ken Allen, DHL’s chief executive officer, in an interview with Arab News at the DHL’s Saudi Arabia headquarters in Alkhobar recently.
Allen, who has a long track record of successfully turning around business at DHL, gave a brief overview of the DHL’s global operation in the interview with special reference to the progressively growing DHL’s business in the Middle East.
He was speaking at the groundbreaking ceremony of the DHL’s10,000 square meter gateway at King Fahd International Airport in Dhahran recently.
Allen also spoke about the trends in the logistics industry, the key growth markets globally and the company’s plans to hire more Saudi nationals.
Nour Suliman, DHL’s chief executive officer for Middle East & North Africa (MENA); Geoff Walsh, DHL’s country manager for Saudi Arabia; and Ali Thabet, national marketing manager were also present.
Allen was visiting the Eastern Province to participate in the groundbreaking ceremony of the gateway terminal at KFIA and to hold talks with senior official and key clients.
At the outset, the DHL chief pledged to promote localization of DHL workforce, when asked about Saudization drive that will eventually help to cut reliance on foreign workers.
He said the new gateway project would provide jobs to about 100 Saudi nationals within the next 12 months.
A large number of Saudi officials including Khalid Al-Mazel, KFIA senior official, attended the groundbreaking ceremony.
The DHL has plans to set up similar facility in Riyadh, said Allen.
Referring to the gateways to be opened at KKIA and KFIA, Allen said that “the combined area of the new gateways exceeded 20,000 square meters, allowing DHL Express to increase operational capacities in the region.”
He thanked the Saudi government led by Custodian of the Two Holy Mosques King Abdullah for ensuring peace and security in the Kingdom.
He lauded the visionary leadership of the Kingdom in maintaining safety and security at a time when several neighboring countries are witnessing political unrest and uprisings.
In reply to a question about the DHL’s investment and expansion plan in the Gulf region despite political uprisings taking place in several countries, Allen allayed fears of any major crisis in the Kingdom.
To this end, he said the DHL is still operating in all those countries including Syria, which have been caught in the crossfire of unrest, domestic violence and bloody power struggle.
“Even during the Gulf war, DHL crew were on the grounds working round-the-clock. We never left the frontiers during the war,” said Allen.
He expressed optimism about the growth in DHL’s business in the Middle East region, especially the Gulf countries. He pointed out that “the DHL had reported 17 percent growth in business in Egypt, while the UAE and Oman were also growing fast together with other Gulf states.”
To this end, he said the DHL was operating nine flights a week to/from Riyadh, which indicates the growth in business in the Kingdom.
“We will be shortly back in Jeddah also,” said Allen, while referring to the strategic business location of the city.
Spelling out the benefits of the two gateways, the DHL chief saidthe gateways would link with all DHL’s major distribution hubs, including nearby Bahrain.
The company, which has operated in the Kingdom since 1976, outlined a series of projects to boost its local market share, including a significant increase in the number of DHL service points.
“We are committed to providing our customers in Saudi Arabia with greater access to DHL services, which will be delivered with the highest standards in logistics infrastructure, delivery fleets and customer service,” said Allen.
“Through this latest investment, we are planning to open several new service points,” he added.
He said the DHL’s focus on Asia, particularly on the Middle East, in recent years had helped it build a more comprehensive intra-Asian business, which are more focused on longer-haul routes from the region to Europe and North America.
“I am convinced that the Middle East region, particularly Saudi Arabia, will remain the fastest growing region in future, and we will focus on these markets,” said Allen.
In fact, the focus has paid off as the economic troubles in the West have hurt demand for logistics services, said the DHL chief, adding that he expects demand for business in the Middle East and in Asia to remain robust despite signs of slowing growth in a few countries.
While Asia-Pacific already accounts for almost 20 percent of the company’s DHL revenues today, the revenues generated in Asia-Pacific should contribute around one-third to the DHL top line by 2017.
With more than 30 years of experience in the market, DHL is the number one logistics brand in Asia, said Allen.
Referring to the satisfactory business results achieved by the DHL, he said“the September 2012 was an exceptional month with similar upward trend in revenue growth being predicted for October this year.”
He said strong oil prices would ensure better business outlook locally and regionally.
On the question of the impact of UPS move to acquire TNT, Allen said that “DHL does not care about it.”
He pointed out that the European Union regulators are still analyzing whether the purchase of TNT Express by United Parcel Service would pose unfair competition and create problems in the market. The UPS agreed to buy TNT last March for $ 6.66 billion.
Asked about the community initiatives undertaken by the DHL as part of its corporate social responsibility (CSR), he said the company had been working to fulfill its obligations under its CSR plan in different fields.
“We are involved in community programs locally, regionally and globally,” said Allen, adding that the DHL’s disaster response team acted swiftly when Japan was hit by Tsunami.
He said that the company would continue sponsoring Formula One in 2013.
The partnership between DHL and Formula 1 has officially gone into overdrive, he said.
After eight impeccable years as Official Logistics Partner, DHL have a proven track record for getting F1 onto the world’s starting grids. It’s a race against time as DHL matches the speed, precision and teamwork of a well-oiled F1 team to deliver the fastest and most efficient logistics in the business. The DHL Fastest Lap Award is given to the driver with the fastest laps in the Formula One season.
Allen also said the DHL is encouraging its employees, customers and business partners to take part in the company’s Global Volunteer Day for the second year in a row.
This year’s program was scheduled for September 6 to 16. But employees can continue to volunteer beyond this 10-day period, providing assistance to the elderly, helping the disadvantaged and cleaning up the environment, among other areas.
“This is evident from what you will see downstairs in our office,” said Allen, while referring to the special decoration made on the basement floor of the DHL office in Alkhobar.
“With our workforce of 470,000 people in more than 220 countries and territories, we have a tremendous reservoir of knowledge and energy,” said Allen.
The DHL also wants to use this energy on behalf of society as a whole and make a positive contribution to the communities where it does business, he said.
DHL Express with its headquarters in the German city of Bonn is a division of the German logistics company DPDHL.


BMW picks insider Zipse as CEO to catch up with rivals

Oliver Zipse
Updated 33 min 29 sec ago
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BMW picks insider Zipse as CEO to catch up with rivals

  • German giant has lost ground to Mercedes-Benz and Tesla as tech steps up

FRANKFURT: BMW has named Oliver Zipse as its new CEO, continuing the German carmaker’s tradition of promoting production chiefs to the top job even as the auto industry expands into new areas such as technology and services.
Hailing Zipse’s “decisive” leadership style, BMW hopes the 55-year-old can help it win back its edge in electric cars and the premium market  from rival Mercedes-Benz.
But some analysts questioned whether Zipse was the right choice with new fields such as software and services like car-sharing becoming increasingly important.
“What is intriguing is the cultural bias to appoint the head of production. It works sometimes but ... being good at building cars is not a defining edge the way it was 20 years ago,” said Jefferies analyst Philippe Houchois.
Current CEO Harald Krueger, and former chiefs Norbert Reithofer, Bernd Pischetsrieder and Joachim Milberg were all former production heads.
Zipse joined BMW as a trainee in 1991 and served as head of brand and product strategies and boss of BMW’s Oxford plant in England before joining the board.
He will become chief executive on Aug. 16, taking over from Krueger who said he would not be available for a second term.
“With Oliver Zipse, a decisive strategic and analytical leader will assume the Chair of the Board of Management of BMW. He will provide fresh momentum in shaping  the future,” said Reithofer.
Zipse helped expand BMW’s efficient production network in Hungary, China and the US, in a move that delivered industry-leading profit margins.
Under Krueger, BMW was overtaken in 2016 by Mercedes-Benz as the best-selling luxury car brand.
It also had an early lead over US  rival Tesla in electric cars, but scaled back ambitions after its i3 model failed to sell large numbers.
Reithofer initially championed Krueger’s low-key consensus-seeking leadership, but pressured him to roll out electric vehicles more aggressively, forcing Krueger to skip the Paris Motor Show in 2016 to reevaluate BMW’s electric strategy.
Krueger’s reluctance to push low-margin electric vehicles led to an exodus of talented electric vehicle experts, including Christian Senger, now Volkswagen’s (VW) board member responsible for software, and Audi’s Markus Duesmann, who is seen as a future CEO of the company.
Both were poached by VW CEO Herbert Diess, a former BMW board member responsible for research who was himself passed over for BMW’s top job in 2015.
VW has since pushed a radical 80 billion euro ($90 billion) electric car mass production strategy, and a sweeping alliance with Ford.

Other skills
“A CEO needs to have an idea for how mobility will evolve in the future. This goes far beyond optimising an existing business,” said Carsten Breitfeld, chief executive of China-based ICONIQ motors, and former BMW engineer. “He needs to build teams, attract talent, and promote a culture oriented along consumer electronics and internet dynamics.”
German manufacturers have dominated the high-performance market for decades, but analysts warn shifts towards sophisticated technology and software is opening the door to new challengers.
“Tesla has a lead of three to four years in areas like software and electronics. There is a risk that the Germans can’t catch up,” UBS analyst Patrick Hummel said.
Germany’s Auto Motor und Sport car magazine, normally quick to champion German manufacturers, this week ran a cover questioning BMW’s future.
“Production expertise is important, but if you want to avoid ending up being a hardware provider for Google or Apple, you need to have the ability to move up the food chain into data and software,” a former BMW board member said.