DHL strengthens capabilities to capitalize on US$12.5 billion packaging market in Asia Pacific
- Market leader launches the region's first packaging center in Malaysia with RM2 million (US$566,000) investment
- Local team led pilot which will be rolled out to Asia Pacific
DHL today launched the DHL Asia Pacific Packaging Center in Shah Alam, Selangor to tap into the packaging market in Asia Pacific estimated to be worth up to US$12.5 billion. DHL Supply Chain Asia Pacific expects to see this business grow by 15% year-on-year over the next three years.
Built at an investment of RM2 million (approx. US$566,000), the DHL Asia Pacific Packaging Center is the first-of-its-kind in Asia Pacific, and plans are to establish up to six more centers in the region by 2012. The investment is timely as packaging services currently form 25% of the contract logistics market in Asia Pacific. DHL expects the demand to grow given the rising demand for customized packaging solutions especially from the consumer, technology and healthcare sectors.
"We expect the business to grow 15% year-on-year over the next three years. According to our estimates, only around 30% of companies outsource their secondary packaging activities to logistics providers, compared to over 75% for warehousing services. In the current economic climate, we find more companies looking to outsource their packaging operations to focus on their core business," said Paul H. Graham, Chief Executive Officer, DHL Supply Chain Asia Pacific.
The conceptualization and development of DHL's Asia Pacific Packaging Center in Malaysia was led by a local team, which had been sent overseas to learn about DHL's global facilities in the US. These facilities specialize in contract manufacturing and secondary packaging and the team looked to adapt aspects of the facilities to suit business needs in the region. This team will be responsible for the roll-out of DHL's planned facilities in other countries in Asia Pacific as well.
The DHL Asia Pacific Packaging Center houses four packaging rooms - two dedicated GMP-compliant and two multi-user GMP-compliant - and 20 packing lines that can handle 60 million pieces per year. Each packing line is equipped the latest in packaging technology - electric and gravity conveyors, stretch-wrapping tunnels, semi-automated carton sealer and labeling guns.
The facility has also been designed to address specific concerns of the retail industry. Confidentiality is especially important in the highly competitive world of Fast-Moving Consumer Goods (FMCG) where brands launch promotions to sustain sales and grow market-share. Designing separate rooms and assigning dedicated teams in the DHL Asia Pacific Packaging Center for different products allow complete confidentiality for each customer. "Upon completion, all finished products are carefully concealed with specially-sourced dark opaque shrink-wrap materials and sent directly to customers' designated distribution centers within 48 hours upon completion," said Kok Peet Leong, Vice President, South East Asia and Managing Director, DHL Supply Chain Singapore.
Another unique feature of the facility is that customers are able to check on the status of their goods in a real-time manner via an in-house packaging productivity monitoring system. Simply by logging on to a website, customers have full visibility as to what percentage of their goods have been packaged - this is important as they are then able to plan precisely their promotion launch dates - to ensure that products are available on the shelves when campaigns start.
"The DHL Asia Pacific Packaging Center complements our focus on value-added services that extends beyond warehousing and distribution of goods. An integrated and streamlined supply chain will deliver reduced costs, enhanced logistics efficiency and speed-to-market. This enables customers to gain greater control of their supply chains, which is especially crucial for our customers in the fast-moving retail sector who require timely deliveries of their products, particularly during tactical sales promotions throughout the year," said Gary Teoh, Country Manager, DHL Supply Chain Malaysia.
DHL has vast experience in managing supply chains across a broad range of business sectors that includes aviation, automotive, healthcare and retail and the GMP-compliant facility offers packaging services for all industries. DHL's packaging services include:
- Packaging design procurement - design and consulting, printing services, materials procurement
- Primary packing - contract manufacturing
- Packing bundling - co-packing, re-packaging and bundling
- Co-packing logistics compliance - quantity control, quality control, corrective labeling, corrective packaging
- Assembly labeling - kitting, assembly