DHL Supply Chain, the global market leader for contract logistics solutions, formed a joint venture with JG Summit Holdings Inc. to provide transport and distribution solutions for local and international businesses in the country.
Both parties agreed to invest P60 million in the joint venture company to be called DHL Summit Solutions Inc.
JG Summit said in a disclosure to the stock exchange DSSI would leverage the strengths of both parties to enhance domestic transportation operations to improve safety, compliance and customer experience in the Philippines.
“The Philippines economy is expected to grow by 6 percent year-on-year and businesses will need to invest in world-class logistics and warehousing services to stay ahead of the competition,” said JG Summit president and chief executive Lance Gokongwei.
“With our diverse business portfolios and local networks, we are committed to help homegrown and international companies in the Philippines achieve their next phase of growth. Working with DHL is the ideal move for us, as we leverage their global footprint and tap onto their expert knowledge to provide integrated industry-leading services,” he said.
DSSI will engage in the business of providing domestic transportation, logistics, warehousing and distribution of cargoes and other supply chain management activities.
The newly-formed joint venture is expected to start commercial operations in June 2020.
Terry Ryan, chief executive of DHL Supply Chain for Asia Pacific said: “We are seeing greater investment by the government on enhancing infrastructure such as setting up integrated logistics and industrial parks, and customers can count on our expertise in this aspect to serve their needs. Our global network and local expertise puts us in good stead as the most reliable logistics partner they need, to fully capitalize on the market opportunities.”
The Philippines economy is projected to grow exponentially, supported by the government’s Development Plan for the period 2017-2022 which is aimed at accelerating infrastructure programs and projects especially for the healthcare, telecommunication, electronics and retail sectors.
JG Summit is the latest conglomerate to foray into the fast-growing logistics industry. Ayala Corp., SM Investments Corp. and Metro Pacific Investments Corp. also made significant investments in the sector.
