Mumbai: The supply chain unit of Deutsche Post DHL will spend €100 million in India to build warehouses in eight locations and upgrade its transport fleet to meet increasing customer demand.

The new facilities in Mumbai, Gurgaon, the national capital region, Bangalore, Nagpur, Chennai, Kolkata and Ahmedabad will add an additional 5 million sq. ft of warehousing space.

“With these new warehouses and our continued investment in our people, we are taking another step in the right direction to pursue DHL’s global strategy and support Indian business development," said Paul Graham, chief executive officer, Asia Pacific, DHL Supply Chain.

DHL Supply Chain was established in India 1997 and has 5,000 employees. It has 103 warehouses in more than 50 cities.

Deutsche Post DHL will invest as much as €300 million in India, Frank Appel, chief executive of Deutsche Post AG, said in an interview in June.

In April 2010, DHL’s supply chain division had announced plans to invest €50 million in five years to grow its technical services offering, part of its overall service logistics solution, and mapped out expansion plans for China, India, Japan and Singapore.

Experts say DHL is moving in the right direction to tap the opportunities available in the Indian logistics chain.

India has the highest logistics cost at 13% of the gross domestic product (GDP), which is higher than that of the US at 9% and Germany 8%.

Most of the Indian logistics companies do not offer logistics services such as track and trace, inventory management, etc., according to a report by Vikas Sarangdhar of Gartner Inc., a consultancy.

Indian logistics companies have old infrastructure and 30-40% of the infrastructure is more than 50 years old, Sarangdhar said in the 1 June report.

In April, Deutsche Post DHL had acquired the 24% stake held by Lemuir Group in DHL Lemuir Logistics Pvt. Ltd to boost its presence in India. This brings Deutsche Post DHL’s shareholding to 100% and strengthens its position in the international freight forwarding, supply-chain management and customs brokerage services in India. The entity is being renamed as DHL Logistics Pvt. Ltd.

DHL also controls India’s leading small parcel courier Blue Dart Express Ltd.

Last year, FedEx Corp. of the US had acquired Mumbai-based logistics company AFL.

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