DHL Supply Chain hands off Chinese operations

posted by Francis Churchill
31 October 2018

DHL Supply Chain has transferred the running of its business in China to a domestic company in a deal worth several billion RMB.

SF Holding, one of China’s largest logistics companies, will take over the operations of DHL Supply Chain across mainland China, Macau and Hong Kong under a strategic partnership between the two firms.

DHL Supply Chain will receive and upfront payment of RMB5.5bn (€700m), as well as an undisclosed revenue-based partnership fee over the 10-year life of the agreement. In exchange SF Holding will gain access to DHL’s supply chain service, management expertise and warehousing technology.

DHL said the partnership will enable the group to “continue to participate in the fast-growing Chinese supply chain market” by leveraging SFHolding’s domestic infrastructure, distribution network and existing customer base.

Frank Appel, CEO of Deutsche Post DHL Group, DHL Supply Chain’s parent company, said SF Holding’s local market expertise held “real advantages” for DHL across industries including technology, healthcare, retail, automotive, and e-commerce.

Dick Wong, chairman of SF Holding, said the partnership with DHL was part of the firm’s plans to expand its B2B capabilities and grow into a “truly integrated logistics solutions provider”.

“This partnership agreement will strengthen our capability in providing supply chain services to a diverse realm of industries,” he said.

The partnership will operate a co-branded organisation led by Yin Zou, the current CEO of DHL Supply Chain in Greater China, and his existing management team.

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