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GeoPost-Kanoo JV Eyes Foray into Saudi Arabia and Bahrain

Wolfgang Lehmacher, President and CEO, GeoPost Intercontinental — the holding company for the express parcel subsidiaries of Groupe La Poste, the French Postal Service — said he expected the next phase of expansion to commence in 2010, after which Kuwait, Qatar and Oman might be markets to evaluate for further expansion.

“The current economic situation has not caused us to scale back our activities, either globally or regionally. We believe that our flexible operating model and solid capital structure, being part of Groupe La Poste — one of the world’s largest and most experienced operators in the transportation and services sector — are a strong basis to weather the current economic storm. As a matter of fact, our specialisation in express parcels is even more relevant in this current economic climate where clients are looking for more cost efficient alternatives to traditional express services.”

Lehmacher said GeoPost chose Dubai as an entry point into the Middle East as it is a regional hub and the location of its partner Kanoo Group’s’s headquarters.

DPD UAE was created as a joint venture with the Kanoo Group in 2007, with operations officially launched during January 2008. GeoPost is the majority shareholder of DPD, the central operating vehicle that delivers two million parcels a day.

“Over the last year, we have already experienced significant growth in the UAE and expect this growth to continue for the foreseeable future.”

He said DPD UAE had established complete regional delivery coverage. “We can deliver parcels to any destination in the Middle East. In the future, we intend to expand our presence to form a regional cluster, which should have the potential to emulate the success of our European operations. In the next phase, this will involve entry into Saudi Arabia, one of the largest markets in the region, and Bahrain, a strategically important gateway location.”

He said the flexibility of GeoPost’s business model and its specialisation in express parcels as an attractive alternative to traditional express services has been successful. “In the Middle East, we are satisfied with our progress to this point and performance has been in line with our expectations. The region forms a critical part of our expansion strategy.”

He said the UAE operation has strong future growth prospects, particularly due to its position as a key hub between India, Europe and Africa. “Our first year of operations has proven to be successful, with volume growth meeting our expectations. During 2009, we hope to double our existing volumes. Over the long-term, our goal is to build a position in the Middle East which is comparable to our leadership position in the European market.”

Lehmacher said the current economic environment would drive a number of trends which could significantly re-shape the global business landscape. “One of these in particular is the mode shift. Due to significant pressure on revenues and profits created by this environment, customers are seeking more cost-effective options to meet their transport needs. This is creating a shift in mode of transport, from air to ground — road, or rail — and sea. The transport sector must, therefore, recognise and meet this need, helping businesses to weather the current economic challenges through supply chain optimisation that will allow them to operate more efficiently.”

issacjohn@khaleejtimes.com