DP World is pursuing its expansion plans in the Asia Pacific but is eyeing “organic growth” as it continues to build its end-to-end logistics offering in the region.
However, the Emirati multinational logistics company noted that it is also open to strategic investments and partnership opportunities, as it bets big on the APAC region.
Glen Hilton, CEO and managing director of Asia Pacific, DP World, said he remains “cautiously optimistic” about DP World’s business prospects in the region – while acknowledging the challenges of the current operating environment and growth opportunities.
“We recognize the immense potential that APAC holds for growth and are committed to investing in the region and unlocking its full potential,” he told Asia Cargo News.
“We are focused on expanding our business in APAC through organic growth as well as strategic investment and partnership opportunities,” Hilton added, noting that such expansion supports DP World’s customers’ growth ambitions and also impacts economies by increasing trade volumes.
The recently published Trade in Transition report of DP World indicates that in 2024, APAC will be the fastest-growing region globally in exports and imports – at over 5% growth each.
It also underscores the importance of intra-Asian trade for APAC businesses amidst geopolitical and economic uncertainties, with one-third of Asia Pacific executives surveyed saying Southeast Asia is one of their primary export markets.
Hilton noted that China is the largest trading partner of many countries and regions, including the ASEAN, Australia, Japan and South Korea, and these relationships are “set to grow.”
“In 2023, we saw intra-Asian exports doing relatively well, with good growth numbers in Vietnam, Thailand, the Philippines, Malaysia, and Indonesia,” Hilton told Asia Cargo News.
“We anticipate continued growth in intra-Asia trade, with high-export markets such as China, Vietnam and Thailand playing a pivotal role.”
He added that China retained its position as the largest trading partner for several ASEAN nations, including Cambodia, Myanmar, Malaysia, Singapore, Indonesia and Vietnam, from January to November 2023.
“Trade between China and the ASEAN bloc is also anticipated to increase to around US$616 billion over the next decade, marking the most significant absolute rise worldwide,” the DP World CEO and managing director of Asia Pacific further said.
Hilton added that DP World is also seeing more APAC businesses diversify and reorganize their supply chains. A third of companies surveyed in its 2024 Trade in Transition report say they are utilizing friendshoring, while a similar proportion says they are establishing parallel supply chains or employing dual sourcing.
He said that one related trend impacting the region is the China + 1 strategy, which has benefitted Southeast Asian markets such as Thailand and Vietnam.
Still, Hilton noted that manufacturing levels within China remain robust, demonstrating the “nuanced nature of supply chain dynamics in the region.”
Across the Asia Pacific, DP World operates 17 ports and terminals.
It has also been expanding its offerings and integrating its logistics operations in the region with recent investments and projects across APAC, like operating and increasing the capacity of Belawan New Container Terminal to 1.4 million TEUs in partnership with the Indonesia Investment Authority and Indonesian government-owned port operator, Pelindo.
DP World said this would help develop Indonesia’s most direct link with the Malacca Strait — one of the world’s busiest shipping routes connecting the Andaman Sea (Indian Ocean) and the South China Sea (Pacific Ocean).
Meanwhile, the group is working with Indonesia’s Maspion Group to construct a new container terminal in Gresik, East Java, enhancing the province’s position as a critical trade gateway connecting Indonesian enterprises with customers in the region and globally.
DP World is also investing in double the warehousing capacity at the Yennora Distribution Centre in Australia and introducing a new rail service that shortens connection time to Sydney’s Port Botany by circumventing road congestion. It also recently broke ground on its Brisbane Container Park at the Port of Brisbane.
“Globally and in the region, DP World’s business focus is to grow as an end-to-end smart logistics solutions provider, leveraging – and even expanding – our extensive global ports and terminals network and adapting to ever-changing customer demands,” Hilton said of DP World’s growth plans.
He noted that DP World is also actively exploring and investing in strategic partnerships and innovative solutions that leverage the strengths of both air and sea freight to offer seamless service, such as the launch of its first air cargo logistics hub in the Dominican Republic last year.
“Our strategy is centred on expanding into new markets and growing our capabilities in freight forwarding, warehousing, inland logistics and other touchpoints within the wider supply chain,” the DP World executive told Asia Cargo News.
“APAC is central to this strategy as it is the largest and fastest-growing region in the world for outsourced logistics, projected to account for 40% of global revenues for contract logistics services by 2027.”
DP World is also open to looking at possible acquisitions to fortify its end-to-end logistics business.
“DP World is continuously evaluating strategic moves and investments to expand our footprint and diversify our capabilities across the full supply chain,” Hilton told Asia Cargo News when asked about DP World’s interest in a possible DB Schenker acquisition after Deutsche Bahn's logistics arm was put up for sale last year.
“We remain open to opportunities that align with our long-term objectives,” he said.
By Charlee C. Delavin
Asia Cargo News | Hong Kong
