DHL Global Forwarding signs Joint Venture with Ethiopian Airlines
DHL Global Forwarding, the air and ocean freight specialist of Deutsche Post DHL Group, and Ethiopian Airlines, the largest aviation group in Africa, signed a new agreement to form a joint venture company – DHL-Ethiopian Airline Logistics Services Ltd. – to enhance Ethiopia’s logistics infrastructure and connections. With this partnership, DHL Global Forwarding is the first global forwarder to establish a local presence in Ethiopia, following the government’s recent decision to liberalize key sectors of the booming economy.
“DHL Global Forwarding is an important enabler of global trade. By bundling our global network expertise with Ethiopian Airline’s profound knowledge of the regulatory and operational environment, we are opening up an important access to international trade for Africa’s fastest growing economy and at the same time strengthening our position in the African continent,” said Tim Scharwath, CEO DHL Global Forwarding.
Ethiopian Airlines, which assumes a majority stake in this joint venture, will provide regulatory and operational support as DHL Global Forwarding establishes air, ocean, and road freight connections between Ethiopia’s main trade hubs and the rest of the world. Pramod Bagalwadi, a DHL veteran with over two decades of experience in management roles within the logistics industry, has been appointed to lead the new organization. This will be an additional portfolio for Bagalwadi, who currently leads the Industrial Projects Team for DHL in Sub-Saharan Africa and a strategic business partner for the company in the region.
Joint Venture formed by long-time partners to leverage growth
The joint venture is another step in an extended partnership between DHL Global Forwarding and Ethiopian Airlines. Since 2010, DHL Global Forwarding has undertaken the maintenance, repair, and overhaul (MRO) operations of Ethiopian Airlines’ commercial segment, handling end-to-end customs clearance of essential items and ground transportation – ranging from aircraft parts, engines and mechanical modules to textile, utensils, food and beverages – via air and ocean freight between Europe and Asia.
“With Ethiopia’s projected GDP per capita growth of about 6% through 2022 , there will be growing demand for logistics support from business. Therefore, working with the right partner to meet that demand, and enhance our logistics ecosystem is crucial. DHL’s expertise and Ethiopian Airlines’ strong history of negotiating local market challenges to connect our country’s businesses with opportunities for growth worldwide will steer us in the positive direction. As our long-term partner in the region, we look forward to working even more closely with DHL on further extending Ethiopia’s transport infrastructure and industrial growth as the joint venture takes off,” said Tewolde GebreMariam, Group CEO, Ethiopian Airlines.
The joint venture will provide much-needed freight capacity and logistics infrastructure to Ethiopia, where soaring economic growth has rapidly driven up demand for international forwarding and handling services. It includes provisions for agriculture exports that currently underpin Ethiopia’s economic growth with the goal of offering door-to-door logistics services. The country currently generates revenue of more than US$270m in exports alone. Door-to-door solutions, including cold-chain services for life sciences and other temperature-sensitive industries, will also connect Ethiopia’s growing number of industrial zones and business parks, covering fast-growing sectors including pharmaceuticals, garments, and automotive production.
In the midst of its five-year Growth and Transformation Plan which emphasizes large-scale infrastructure and export-focused manufacturing, Ethiopia aims to establish at least eight more industrial parks and two million manufacturing jobs by 2025 in industries like horticulture, fashion and pharmaceuticals.