DHL Express is actively looking for acquisitions in India to expand in one of the world’sstrongest potential growth markets, according to senior executives.
Malcolm Monteiro, former head of subsidiary Blue Dart Express and now DHL Express director forSouth Asia, told the Business Standard newspaper that the company is “open for acquisitions” ifopportunities arise in order to increase the two brands’ leadership of their respectiveinternational and domestic market segments.
And Blue Dart Express COO Yogesh Dhingra told Reuters in an interview that the company islooking at niche regional players and is ready to spend Rs 1 billion to Rs 1.5 billion (€15-22million) for smaller acquisitions. But no talks are currently taking place and no major acquisitionis pending, he stressed.
In an in-depth interview with the Business Standard last week, Monteiro said DHL Express andBlue Dart, its 81% domestic express subsidiary, already have strong market positions. A further 10retail centres will be added this year to the existing 350 Retail Express outlets and 30 branchoffices, while Blue Dart plans to add its eighth freighter, a B757, next year which is whenadditional capacity will be needed, he said. The company will continue to expand in so-called TierII and Tier III markets which are expanding due to more manufacturing industries, he said. Inaddition, DHL will offer more solutions for vertical markets.
Asked about acquisitions, Monteiro responded: “We are going to grow organically and are open toany kind of acquisitions, should there persist an opportunity.” DHL had already invested more than$300 million in the country in the last 5-6 years and investment will continue, he said. “When anopportunity presents itself, we wouldn’t be restricted by budgets.”
The Indian express market, according to the DHL director, is worth about Rs 70 billion (€1.1billion) and is growing about 12%-15%, having recovered in the last few months. The two companieshave grown faster than the overall market, and DHL has about 60% of the international market inshipment terms, while Blue Dart has 44% of the domestic air express sector, Monteiro said. “We arevery optimistic about 2010 and expect to see double-digit growth here.” India generates about 8%-9%of DHL Express Asia Pacific revenues.
In other moves, DHL is expected to open an integrated international and domestic terminal atHyderabad airport in April following the recent opening of a similar facility at Bangaloreairport.
DHL is also considering creating a rail-based ground transport product for long-distancecross-country shipments. This could offer deliveries in three days compared to five days for roadtransportation, Monteiro told The Hindu newspaper in a separate interview. The company is currentlyrunning pilot projects to test how reliable this transport mode is before making a decision. Newrail-side warehouses would be needed for such a service.
