DHL says USD 100 mln investment for GST solutions in India

Singapore : Global logistics group DHL, with plans to invest USD 100 million in coming years, is working with its customers to prepare for the Goods and Services Tax (GST) being implemented next month.

Well ahead of the curve, DHL is planning to invest over USD 100 million in its supply chain operations in India in the next 3 to 4 years to meet the expected increasing demand following the GST implementation.

"We are working together on how to create new solutions for the Indian market especially focusing on GST for likely immediate challenges," said Scott Allison, President of Life Sciences & Healthcare sector, DHL Customer Solutions and Innovation.

"Ahead of the GST implementation, we want to help our customers to be as prepared as they possibly can be for the GST," he said at an interview during the 17th DHL Global Life Sciences and Healthcare Conference held in Singapore from 20- 22 June.

"We would like to see the customers take advantage of what the new legislations offers and we want to be there as a partner to help customers throughout that (GST) transition period," said Allison.

"To help our customers prepare for the GST implementation, we had started this engagement more than a year ago. There have been discussions with each of our customers because each of them have different setup requirements," elaborated Leonora Lim, Vice President of Life Sciences & Healthcare, Asia Pacific, DHL Customer Solutions and Innovation.

"We just want to make sure we understand where our customers are with regard to GST and where they want to be," Lim said.

This would help bridge any gap in operations during the transition period and as GST regulations become clearer and clearer, she added.

Elaborating on the USD 100 million supply chain investment, Allison said, "A lot of what we are trying to do is related to GST".

"We believe that GST is going to drive customers to assess the supply chain setups in India. With the GST in place, they can set up supply chains more professionally and efficiently. We are focused on our customers' requirements," he added.

Besides leveraging existing infrastructure, DHL aims to setup national distribution centres in major metros such as Mumbai with strategic locations across India for managing supply chain.

"That is the thrust of this supply chain investment," he stressed.

India is already a big player in the healthcare and pharma markets.

A significant portion of generic-type producers are coming out of the Indian market, he noted.

Indian generic companies are probably going to have an advantage in competitively producing from India as western companies are under cost pressure, Allison pointed out.

"The Indian market is going to grow," he underlined.