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DHL is one of the world’s leading international logistics companies that have a global network crisscrossing more than 220 countries. The CEO of the company, Ken Allen, visited Ethiopia on March 15th 2013 as part of his Sub Saharan Africa tour. He sat down with Capital’s Eskedar Kifle to discuss on the success of DHL worldwide and its operations in Africa.

Capital: How successful is DHL in the world and to what do you attribute that Success?
Ken Allen:
In 2008, DHL lost a lot of money, around 2.8 billion euros to be exact, but then in 2009 we made 500 million euros in profits. In 2010, the trend continued to go upwards and we made 900 million euros and this year we made a billion. We have done that purely by focusing on areas in which we are strong and by being a specialist in the international arena. We spend around 600 million euros a year to develop our aviation facilities, systems and capabilities. That is the area where we think we are the best at.
We have seen our market share grow in the past 2 to 3 months, and we really think that in the environment today, there are a lot of domestic issues in a lot of countries, especially in Europe, like Spain and Portugal, but the opportunity is there for small companies to enter the export market. Despite such problems, our business in Portugal is a good example, where we are growing 8 to 9 percent annually, which is really quite good.
DHL provides its services in almost every country in the world. We have established good relations with the countries we operate in and we understand customs and aviation, which has enabled us to acquire a lot of customers around the world. Therefore, we are in a position to help small businesses grow by helping to introduce them to the international market, which is important for any economy.
Capital: What about in Africa and specifically in Ethiopia, how successful are you?
I think we are very successful. I believe Africa and Ethiopia, especially with the growth of the middle class and entrepreneurs, will reach great heights. As a company, we should encourage small businesses to become bigger so that they can provide employment and different opportunities for others. There are a lot of opportunities in Africa.
Usually, people ask how much we spend in this country and in that country. We spend 600 million euros every year to upgrade our systems for the provision of excellence.
For example, we spend a lot of money in China because that’s where a lot of businesses are, but don’t forget that whatever is coming out of China has to be going somewhere; it has to be delivered in Africa, Europe and America, so we try to keep a very balanced view of where we put our investment. Africa continues to grow, especially in goods and services that are inbound. The inbound is much higher than the outbound; therefore, I think that is why, if we can, we want to work with the government to promote small businesses, help them export their products to the international market.
The thing about DHL is that if you are a small company and maybe you have only got 30 or 40 items to sell in the beginning, our system makes that very easy to do. You can give us 5 kilo boxes or 10 kilo boxes and we can deliver it anywhere in the world for you. I think our system really helps small businesses to grow and in that sense also has a lot to offer in Africa and Ethiopia.
Capital: What makes your company different than those engaged in your kind of business?
First of all, I don’t think there are a lot of companies like ours. Recently there was talk of UPS buying TNT, if that would have happened there would have been only three international express companies, but as I said, we spend all our effort and focus on becoming the best international express that there is, which means we put a lot of investment in our people in terms of international knowledge, a lot of investment in our IT systems in terms of international movement and a lot of investment in aircraft to make sure that materials move around. So I don’t think there is a company quite like DHL. Sometimes for legal reasons we can’t own a business in some countries, but even in such cases, we manage to develop close relations. The management of some of our competitions is very centralized, but everybody working in DHL feels part of the DHL family, and we work very hard to encourage them to feel that way.
I want to explain why that is the case. This company started as an entrepreneurial company; therefore, we understand Small and Medium Enterprises (SME’s) much better. DHL was established by Dalsey, Hillblom and Lynn, three guys who came together with no money and had to rely on other people to go to the rest of the world and build from literally nothing. We built the company country by country on very local bases. I hope when you see DHL in Ethiopia, it looks like an Ethiopian company, because DHL in Australia looks like an Australian company. With our IP system and peoples’ network, we all pull together for the customer. That is why I say if you try and think globally, DHL in my opinion, is the best example of a ‘think global act local’ company.
Capital: Is this your first time in Ethiopia?
I am embarrassed to say it is my first time in Ethiopia. You know, I have been with DHL for 28 years and have worked in the Middle East, Europe and some parts of Africa. I must say, I can’t believe I haven’t been here before, now that I am actually here.
Capital: Any special purpose of your visit here?
The regional director and I were in Africa and I wanted to see as much as I could in a short period of time. We have been to Zambia, South Africa, Kenya and now we are in Ethiopia. Next, we will be going to Riyadh, Bahrain then back to Germany. I am here formally to say thank you to government officials that helped us and all our customers, but specifically we want to grow here in Ethiopia and want to invest some more money at the facility we have at the airport. We already have a great facility there, but we have grown now and we need to have a bigger facility to help our customers trade better in and out of the country. One of the things I am very passionate about is the SMEs. I really think that in a country like Ethiopia, there are probably a lot of people with a lot of good ideas and they just need a little bit of help to push it forward.
Capital: A lot of big companies are involved in social works and also protecting the environment by going green, what about DHL?
We have a massive commitment to what we call corporate social responsibilities. I feel that the more we try and have a good spirit within the company, the more people want to do for others outside the company. Young people in particular are very passionate about what’s going on with the environment and we are very much into the whole idea of going green. We have focused on three initiatives; we have the classic “Go Green” agenda, and with that the biggest thing we can do is get fuel-efficient airplanes, because that is the biggest contribution we can make in reducing carbon output. Currently, we have reduced our carbon output by 20 percent. We are really committed to phasing out the old system and get more fuel-efficient aircraft. In a lot of our warehouses and other facilities we remind people about simple things like not forgetting to turn lights off or using electric cars.
Then we have the “Go Teach” initiative, which supports children who have no access to education. There actually is a program called “Upstairs” within the company that helps staff who can’t afford to put their children through secondary education up to university. In various countries in the world we have a hand in supporting education programs for a number of years. For example, yesterday when we were in Kenya, we visited an orphanage just on the outskirts of Nairobi with whom we have been working with for nine years now.
The other initiative we have is “Go Help”. When devastating events, such as the tsunami in Japan and the earthquake in Haiti occurs, what people want is logistic help. In the case of the tsunami in Japan, the first thing we were asked to bring in was an aircraft full of bottled water because all the water had been contaminated, so we flew in this plane full of bottled water as part of the “Go Help” program.
DHL, as I keep pointing out, is a company which is truly international. In most countries we have an on-airport facility, to facilitate the transfer of goods for our customers. When the earthquake caused devastation in Haiti, we were lucky our facility at the airport remained intact and we were able to fly our planes to and from the country by working with the United Nations and were able to take in all the things people needed in the aftermath of the quake.
Because of all these things we are into, I believe we are committed to corporate responsibility.
Capital: What do you think are the opportunities and the challenges in Africa/Ethiopia for a company such as yours?
I think, when you are in the business environment, like our company, we just do what we can do best. We are not political; we certainly do not want to get involved in politics. I think the best thing we can do is to do whatever we can to get companies trading internationally. It is a real passion of mine, because I think it is the way to overcome all issues with regards domestic economies, and to have free trade globally.
In this age of the internet, you can develop something in Ethiopia and put it on a website, and if people like it, it can be shipped by DHL to wherever it needs to go. I think if businesses, DHL and other logistics companies work together, we can open up new markets and enhance existing ones where people will benefit. I’m sure great ideas are brewing in this country; they just need a little bit of help.
Capital: Even though the ICT sector in Ethiopia has come a long way, it still has much farther to go. Does that affect DHL’s business here?
We are part of a global network; so in many ways the only thing we need is an internet connection and the technology we have. DHL Ethiopia is the same as, not just DHL Kenya or Saudi Arabia but also DHL UK or our branches in other European countries. We provide couriers with scanners to record the data, and then all they have to do is upload it in our system of networks. Our IT requirements are not that high. We do what we call CIA, meaning ‘Clear In the Air’, which means the majority of items that are being forwarded to different countries have gone through  and are cleared by customs and all other processes have been completed before they reach their destinations. So concerning IT, we don’t really have any issues in Ethiopia.
Capital: Are there any new projects you are working on?
Currently, the biggest change that can be observed is the growth of internet shopping; about 30 percent of our growth is coming from internet shopping worldwide and I think the express system is ideal for that. People are not going to buy hundreds of thousands of things. It is all about individual packages going to individuals’ houses.
The biggest issue we have to resolve is on the return side. Domestically, if you buy something and you want to be able to return it, it is a rather easy process. But sending back an item bought from abroad is not easy at all. That is what we are trying to fix. The basic growth of trade means we have to work really hard just to keep up with the current demand. What we are really thinking about is how we will improve on what we have rather than starting or getting involved in some other dramatic project.