BAYAN LEPAS (Oct 17): DHL Supply Chain, the contract logistics arm of German multinational logistics firm Deutsche Post AG, will invest up to €350 million (RM1.74 billion) in Southeast Asia, of which Malaysia will receive the biggest investment of up to €131 million.

Meanwhile, DHL Supply Chain will allocate €104 million worth of investment in Singapore, followed by the Philippines with up to €80 million, and Indonesia with €35 million.

DHL Supply Chain Southeast Asia chief executive officer Andries Retief said that the investment will be spread over the next five years to expand DHL Supply Chain’s warehousing capacity, workforce and sustainability initiatives in Southeast Asia.

“There is a global reshuffle of supply chains, and Malaysia will benefit from it, especially in the manufacturing sector. A member of Asean, the country is party to numerous free trade agreements, making it an attractive option for those looking to diversify their sourcing options.

“This is why we are investing €131 million in Malaysia to ensure that we have the capacity and talent to support our customers’ growth here,” Retief said during a media briefing here on Tuesday.

With €131 million in Malaysia, Retief said that DHL Supply Chain will introduce new facilities across Malaysia, with two in Penang, one in Kuala Lumpur and another one in Johor Bahru, covering the main economic regions of the country.

These new builds will add 113,000 sq m of warehouse space to DHL Supply Chain’s existing portfolio of 217,300 sq m in Malaysia.

Part of the total investment will also be directed to the implementation of advanced automation at the upcoming Penang Logistics Hub 5 (PLH5) in Bayan Lepas, Penang. The PLH5 is scheduled to be completed in 2024.

DHL Supply Chain CEO of Asia-Pacific Javier Bilbao said the decision to invest the largest amount in Malaysia within Southeast Asia stems from a surge in foreign investments in the country recently, as well as its vital role in the semiconductor industry.

“There are clear signals and messages from many foreign investors that they see this (Malaysia) as a key element [in supply chain diversification].

“There have been a number of announcements [which have been made] that have a knock-on effect on the logistics industry [in Malaysia],” Bilbao told The Edge.

Additionally, DHL Supply Chain will continue to invest in its warehouse management system and digitalisation, such as its state-of-the-art automated pallet storage and retrieval system and goods-to-person robotics technology in its new warehouse facilities to handle small parts picking.

It also aims to expand its transportation capabilities in Malaysia, with significant investment in its fleet, systems and people.

DHL Supply Chain will build its first connected control tower in Kuala Lumpur, offering standardised and centralised transport services with end-to-end visibility.

DHL Supply Chain expects that the new investment will create 450 jobs in the country by 2024, mainly centred on digitalisation and automation of its warehouses.

Interestingly, Malaysian employees will be offered the opportunities to learn and upskill from DHL Supply Chain’s peers via its global network.

DHL Supply Chain also partners the Malaysian government to provide employment opportunities for the hearing-impaired and speech-disabled community.

According to Deutsche Post’s annual report 2022, the group, which is listed on the Frankfurt Stock Exchange, saw its supply chain division contribute a revenue of €16.43 billion in 2022, of which 15% came from the Asia-Pacific region with a total of €2.41 billion.