DHL Express wants to open a major facility at the planned new Istanbul ‘mega-airport’ that could operate as a regional sub-hub as part of growth plans in the ‘priority’ Turkish market, managing director Markus Reckling told CEP-Research in an exclusive interview.
The company is continuing to grow well in Turkey despite the weak economy, and is seeing growing volumes of cross-border e-commerce shipments, he also said on the sidelines of a recent media event at the European air hub at Leipzig.
Under its Strategy 2020, Deutsche Post DHL Group has committed to invest €100 million in Turkey as one of its 11 ‘priority’ emerging markets. On a visit last October, CEO Frank Appel described Turkey as “one of the most promising countries we focus on”, as “a trusted partner for direct investments” and with “a dynamic consumer market”.
Late last year DHL Express invested €10 million in launching weekday flights to Istanbul’s Sabiha Gökçen Airport, which is located on the Anatolian side of the Bosphorus, to meet demand from customers located on the eastern side of Istanbul as well as nearby cities. The company has also spent €2 million on new sorting technology at its larger facility at Istanbul’s Atatürk airport.
“We are the only express operator with flights at both airports,” Reckling pointed out. UPS operates to Atatürk Airport while TNT has flights to Sabiha Gökçen.
Looking ahead, however, the DHL Express Turkey chief disclosed ambitious plans at Istanbul’s planned new airport, which could become the world’s largest with capacity for 150 million passengers a year. Construction work started this year at the site, located 35km north-west of the Turkish metropolis, with opening of the airport's first stage currently scheduled for 2018. It will replace congested Atatürk Airport, which will be closed.
“We have signed an MoU for a large facility which would probably be an investment of about €50-60 million,” Reckling said. “In the future this could be a sub-hub for the Middle East and CIS area.” DHL is the first express operator to sign an MoU for the new airport, he added. The hub would cover a 20,000 sqm area.
Asked about DHL Express’ business development in Turkey against the background of a slowing economy and political uncertainties, he responded: “Our shipment volumes are still growing double-digit this year despite the economy and we are continuing to invest.”
DHL is especially focusing on supporting Turkish SMEs, who make up 99% of all firms and generate 57% of the country’s exports. The company claims a 53% share of the Turkish international express market.
On B2C trends, Reckling said DHL has seen e-commerce exports soar 50% from a low base as more Turkish firms sell online to international buyers. He cited the example of a small fashion firm specialising in women’s hijab headscarves which had grown from 10 shipments a day to 1,000 a day in recent months. In contrast, Turkish e-commerce imports are “at a very early stage”, he added.
Asked Turkey’s prospects in general, Reckling underlined the country’s fundamental competitive advantages, including its young population and geo-strategic location, but also highlighted the need for further investments in education, infrastructure and product quality. “The added-value is too low. And there are no big Turkish brands,” he commented.
