Singapore continues to attract major logistics centre investment

The announcement last week by DHL Supply Chain that it is to build a large logistics centre in Singapore followed Menlo opening a similar, if smaller, facility earlier in the month. Both these projects are clear illustrations of the direction Singapore is moving-in in terms of the nature and size of its logistics sector.

The DHL ‘Supply Chain Advanced Regional Centre’ initiative will increase its warehousing capacity in the city state by 40% with its staff growing by an even greater proportion. Partly this is a component of its wider strategy for South East Asia which will see its warehousing expand by 50% in the region over the next three years. However, it is clear that the Singapore facility is qualitatively different from developments elsewhere in South East Asia, with an emphasis on automation and much higher added value operations co-ordinated out of a ‘Solutions & Innovation Centre’ of the type the company has built outside Bonn. DHL Supply Chain intends to target the aerospace, healthcare and technology sectors.

Menlo is similarly growing its contract logistics capacity in the Singapore, with the opening of a new 50,000 sq m ‘Benoi Centre’. This is a shared user facility adding to 219,700 sq m across eight facilities in the city state. As with the DHL facility, Menlo says that the emphasis is on “regional Asia markets” which are some of Menlo’s “fastest growing sectors”. Menlo in Singapore is a specialist in wines and spirits logistics for which Singapore is a key hub, not just for South East Asia, but also for much of the wider Asian region. Indeed the new facility appears to be pitched at Menlo’s existing customers in this sector who include “Pernod Ricard, Asia Pacific Breweries, Bacardi and Tradall”.

These two developments appear to confirm that Singapore continues to be successful in attracting high productivity logistics facilities, with high levels of automation serving high-value supply chains across South East Asia while also interfacing with global trade. The city is fairly unique in the clarity of its vision and appears to be one of a handful of logistics hubs that are important on a global scale.