DHL Express has stepped up cooperation with its expanding Indian subsidiary Blue Dart Expressbut does not plan to absorb the company, according to a senior executive.
In parallel, Deutsche Post DHL has not yet decided whether to scale back its 81% holding in thedomestic express market leader to 75% in line with new Indian stock exchange rules or fully takeover and then de-list the company, Malcolm Monteiro, DHL Express senior vice-president and areadirector for South Asia, told Indian newspaper The Financial Chronicle.
“Blue Dart has advantages with its governance and risk management systems. The verticals thatBlue Dart services, domestic express, and that DHL services, international express, are differentand require separate focus. At the backend, we already leveraging synergies between our differentbusiness units, so we do not see any reason to merge the two firms,” he said.
Asked whether DHL would reduce its Blue Dart stake by 2013 in line with the new stock exchangerules, he commented: “There is still time for that and a call has to be taken by our corporateheadquarters on whether they would like to dilute the stake or delist the company.” The former BlueDart managing director also pointed out that Blue Dart was “very successful” in contrast to othercountries, where DHL had exited the domestic express business.
In August, DHL confirmed that it was reviewing its stake in Blue Dart due to the listing rulechanges. A DHL spokesperson told CEP-Research at the time: “DHL is reviewing all business optionsin line with the Indian government’s regulation of 75% shareholding requirements.” The company wasnot immediately available to comment on Monteiro’s remarks.
Financially, Blue Dart is performing well. In 2010, it had revenues of Rs 11,474 million (€185.6million), up 27% on 2009 and also well above 2008 levels. Its volumes grew 11.5% to 87 milliondomestic shipments and 0.74 million international shipments during last year. The company’s netprofit rose 55% to Rs 944 million (€15.3 million) in 2010. Over the first nine months of 2011, thedomestic express market leader increased revenues by 32.3% to Rs 10,961 million (€159.1 million)and its net profit rose 41.9% to Rs 998.7 million (€14.5 million).
Monteiro also told the Indian newspaper that DHL Express India and Blue Dart Express were nowcooperating more closely in terms of cross-selling, operational synergies and sharing bestpractices in administration and other parts of the businesses. Under their long-standingpartnership, DHL Express uses Blue Dart’s extensive network in India for collections and deliveriesin areas where it is not present, while Blue Dart uses DHL Express for its internationalshipments.
Meanwhile, several Indian newspapers reported that Blue Dart plans to invest about Rs 1.5billion (€21.5 million) on expanding its air and ground network in 2012, which is about the samelevel as the last two years.
The reports followed the official launch of the corporate environmental protection programmeGOGREEN in India. DHL Express and Blue Dart Express customers can now neutralise their CO2emissions by paying an additional offset charge for their domestic and international shipments. Thecarbon-neutral service is available across all of the Blue Dart and DHL express services.
R. S. Subramanian, Country Manager, DHL Express India, said: “At DHL, innovation means providingsolutions today for the world of tomorrow. Our GOGREEN Carbon Neutral Service enables us tocollaborate with our customers and help them evaluate measure and neutralise their carbonfootprint.”
Anil Khanna, Managing Director, Blue Dart Express Ltd., added: “Blue Dart has always led the wayfor the domestic express industry. We are acknowledged for the product innovations, infrastructureas well as sustainability initiatives and are considered as a lighthouse for other logisticscompanies in Blue Dart Country. The GOGREEN Carbon Neutral Service will not only enable ourcustomers to contribute to a greener future but will also help fund the climate protection projectsand build healthier and productive communities.”
