India will be among the first few countries to bounce back from the ongoing economic downturn, on the back of its growing domestic consumer population and strong economic fundamentals, said a senior DHL executive at the recent launch of the DHL-Blue Dart air sidefacility in Bangalore.
“Unfortunately India has not been spared from the global slowdown, and will India be among the first few countries to bounce back? Yes, I believe India will bounce back very fast, because of domestic demand of 2.5 million people with purchasing power and the inherent fundamentals in the economy are pretty strong,” said Malcolm Monteiro, DHL senior VP and area director of South Asia.
Monteiro was speaking at the opening of the DHL-Blue Dart airside facility at the Bengaluru International Airport (BIAL), the first of its kind in India. The US$25 million facility is unique because of its fully integrated domestic and international express operations.
The new facility will help “synergise the domestic and international express operations of both businesses in South India,” according to DHL-Blue Dart. DHL has an 81 per cent stake in Blue Dart.
The 220,757 sq feet facility will provide faster clearance and seamless handling of inbound and outbound international and domestic shipments, which will strengthen both companies’ global and domestic delivery network.
The facility is also expected to bring substantial synergies to both companies’ operations, by reducing handling time, streamlining processes and optimising the utilisation of space and common resources through their dedicated aviation network, own maintenance and ground handling, the companies said.
The facility has also been designed to accommodate future growth over the next 10 years.
“With increasing trade opportunities in India and continued growth in intra- Asia trade, our integrated facility at thenew Bengaluru Airport will offer greater customer convenienceby providing end-to-endsolutions for domesticand internationalexpress services,” saidDan McHugh, CEODHL Express Asia-Pacific.
“We are proud to be the pioneers in establishing the first-ofits- kind facility in Asia, benchmarked against world class facilities. This infrastructure is benchmarked to successful global hubs that have self controlled operations and have achieved outstanding results in facilitating trade.”
DHL-Blue Dart still growing
But the new facility comes at time when even the Indian domestic economy is not immune to global economic contagion.
“The unprecedented slowdown has impacted Indian manufacturing and service sectors in particular and we’ve witnessed it across the board,” said Monteiro. “While there has been an overall slowdown in the market we as DHL-Blue Dart are growing above market.”
Monteiro said DHL-Blue Dart was growing at about 15 per cent this year as compared to the industry average of about 10-12 per cent. Last year the two companies saw 21 per cent growth while the industry grew at about 17-19 per cent.
The two have a 60 per cent market share in Indian international shipments and nearly 42 per cent for domestic shipments, with Monteiro saying they are growing it by one or two per cent each year, and “we don’t think this year will be any different”.
He added that while the slowdown is defi nitely being felt, DHL-Blue Dart will not scale back its investments or operations in India, saying, “we’ve committed to the India growth story, it’s going to happen, it’s just a question of how long this slowdown will last.”
“We will continue to invest and we’ll keep pace, depending on the market, but we will continue down this path. Some have questioned putting up a facility in times like this, but India is growing, it’s growing slowly but its growing. We will continue to do these kinds of investments because we believe that this is what facilitates trade and fuels growth.
The express partners are also set to get a boost from the previously announced Aerologic joint venture between Lufthansa and DHL Express. Although the launch of Aerologic has been delayed because of the recent Boeing strike which has delayed delivery of Aerologic’s B777 Freighters, India will eventually be served by two Aerologic flights.
Currently one Lufthansa flight lands at DHL-Blue Dart New Delhi hub and this will be replaced by an Aerologic flight as well as an additional one to Mumbai which will help take some of the pressure off of New Delhi, the partners said.
DHL plans on investing another US$200 million in South Asia – with the lion’s share going to India – over the next 3-5 years, Monteiro said. He also said the country will likely become a South Asia hub sometime beyond that period with Bangalore being a likely location. Two other possibilities include Chennai orHyderabad, he added.
