Romania, a country where investors have to be for long term


A very enthusiastic businessman and first-class professional, Daniel KEARVELL, Managing Director of DHL Romania, tells Nine O’Clock why in this country one has all the reasons to be optimistic.

Mr. Kearvell, you have been representing DHL Group for many years already…
My career with DHL started in Saint Petersburg as Area Manager, Western Russia. Then it followed as Programme Manager for Eastern Europe, Middle East, Africa – based in Brussels and Dubai -  and then as Country Manager in Qatar. All this came after a great experience, also in Russia, as Commercial Manager in Moscow and Director in Saint Petersburg at the Russian-British Chamber of Commerce. From June 2012 I am Managing Director of DHL Romania.
Before coming here, what was your knowledge about Romania?
Before I came to Romania, I knew of DHL Romania for a long time because of its strong market position. Initially, I thought that here would be a mix between East and West, but now, for me, it is clear that what you have here is closer to the life of an Western European, which makes it easier for expats and foreigners to come here. I really feel quite at home!
Romania is a great and pleasant country. Saint Petersburg is also a wonderful place, but in general Russia is a tough environment. The country’s size in itself presents a big challenge. I know Romanian colleagues who are highly appreciated at the network’s Group level. In general, my Romanian colleagues are very educated and experts in the International Express industry. The Western leaning of the educated workforce I believe is one reason for the success of many Romanians within international companies such as DHL. I genuinely believe that Romania has some of the best English language levels in Europe.
All this time, what exactly of your experience with the German company have you implemented here in Romania and what do you intend to do further for keeping the company’s good performance?
I would split our recently development into three key categories. Firstly, key has been the investment in DHL Romania’s operations that we have made here in the last year and a half. At the moment, we have a very new fleet following the investment of EUR 2.5 M: over 200 vehicles with safe and security systems for shipments, which is very important and an area in which we are market leaders in Romania, plus 3 aircrafts. The demand we have from customers in the West of the country has meant that we have had to double the capacity of our air network in Arad and Cluj. It’s all about being more accessible to customers. It should be mentioned as well that this is not an easy market, particularly taking into account its challenging geography. Nevertheless, it’s up to us to be where our customers are. We have 41 locations across Romania and we have increased our footprint considerably last year. We have new locations for our service points, such as those in malls (e.g. Baneasa Shopping City), as well a number of partnerships all across the country.
The other area where we have developed recently is that which concerns new products. Last year DHL launched DHL Receiver Paid, a new import service aimed primarily at private individuals. Customers can use DHL worldwide to bring goods or documents from abroad to their destination, in Romania. The service is for those who make occasional imports and is very simple to use because it does not require advance payment or the signing of a contract with DHL in advance.
Last but not least, on the people side, it’s about one big thing the company has implemented in the last few years, which includes Romania too: namely, the launch of a Global Training Program named Certified International Specialist (CIS). The CIS program consists of a Foundation course and specialized modules for individual functions, such as sales and customs clearance, as well as a world class Leadership curriculum. This programme provides an unique learning experience and is facilitated by DHL Express executives and managers worldwide.  I myself facilitated the programme for managers in 4 countries last year. The Foundation course has been attended by all current employees of the company and serves as the main induction program for new recruits. It takes them back through the entrepreneurial history of DHL and the pioneering spirit and customer dedication that helped it grow into the world’s most international company. In Romania, this program has already proved to be very successful and popular. Six top managers facilitate this programme, which we believe emphasizes and develops further the huge professionalism of our employees.
The company’s vision emphasizes that you want to be The Logistics Company for the World. What are the strengths of DHL on an extremely competitive logistics company market?
Along with the CIS program, it’s all about doing our job, irrespective of what the market difficulties are. In this respect, I can give you the example of wartime Libya: even when the country was in turmoil and in the midst of war, DHL continued to deliver shipments by sea from Italy. We made deliveries in incredibly difficult conditions, but we respected our commitment to the customers. I think that this is the strength of DHL. Then, the fact that we have our own operation here, and do not operate through agencies to any great degree, is also one of our strengths.
How much did the local operations contribute to the financial consolidation of the whole group last year?
The turnover of the DHL Express at global level is approximately EUR 13 bln, whilst the turnover for DHL International Romania, which includes Express and Freight divisions, in 2013 will be around EUR 50 M.
But I think as relevant as statistics is that we are extremely optimistic about the opportunities we have in Romania. We should be confident in Romania and to acknowledge the fact that we do have considerable strength in this country. We, DHL, are confident in its potential. Within our 11 central-eastern European countries for DHL, Romania is one of the fastest growing. Within the whole Europe, that’s 41 countries for DHL, Romania is in the top 12 countries in terms of shipment growth. DHL Romania grew 13 percent vs. last year because we invested in people and in infrastructure. What the economy is doing is indeed important to our business, but nevertheless we expect to grow by at least 10 per cent in 2014.
Crisis is a good opportunity for some players to grow their business by acquiring smaller players. Do you intend to do moves like the one you made with Cargus a few years ago?
There is no intention for DHL Romania to acquire any new companies this year. The reason for that is we focus on the international express sector that we are experts in. That is at what we’re good at. Obviously, acquisition is one option as a method for expansion, but at DHL Express we focus on developing our international business. I use as a good example a study that DHL Express made last year which reveals that International trade and cooperation are key drivers for small business success. The study, which surveyed 410 SMEs in so-called G7 economies along with firms in BRICM, shows 26 per cent of those that traded internationally also significantly outperformed the market, while only 13 per cent of domestic-only SMEs also outperformed the market. DHL’s study also discerned that inadequate business infrastructure can constrain a company’s competitiveness due to the reduction of business efficiency.
In this context, Romania’s estimated GDP growth of 2.5-3 per cent for 2014 will be the third highest increase in EU, is encouraging for our business here. The western part of Romania is the growth leader for us, which is a reflection of both the excellent service quality that we offer in this side of the country and our customer activity in these areas. This year we will open a new airport facility in Cluj and will continue to focus on this significant growth area. This new facility will enable a transit time improvement of up to one hour for our customers. We have a number of projects on Romanian exports with local Chambers of Commerce and SMEs activities to support this segment of the economy. Our customers know that we are here to stay. But, for all these projects, of course economic stability is very important.
As an important representative of the German business community, what is DHL Romania message to the businessmen interested to invest here?
Taking on the role of a consultant to new business interested in entering the Romanian market, my advice for the investors is that there are many opportunities: the taxation is quite low, the human resource is fantastic… it is a very competitive market. The infrastructure continues to improve… The country presents fantastic opportunities in particular in four areas: manufacturing, taxes, oil and gas, and tourism. If you go to talk with any major investor in Romania, the majority of them will be absolutely delighted how the business grows here. I know this because practically all of these major investors are DHL customers. We have 5000 customers from all sectors: automotive, IT, oil and gas, manufacture, textiles, as well as private persons. But I have a message for you too: know your market, do your research, consider making a good local partner. Romania is a place where you have to commit to long term. The more you are able to do this, and the more commitment you show to the market, the more return you are likely to receive on your investment.
How do you see the local courier market comparing it to the external one? What is your estimation about the value of this market?
The domestic market is growing well. For DHL, the figures show the domestic product last year grew at 12 per cent. The majority of the DHL domestic customers are already international customers. I think that the value of the international express courier market, DHL Express’s major focus, is probably around EUR 100 M. Our market share in international express air services was around 42 per cent last year, and for 2014 we estimate that it will grow to 45 per cent.
The company does not resume at logistics activity, but also combines it with Corporate Responsibility actions…
Yes, this is true. This year we intend to re-launch The Carpathian DHL Marathon Relay in Poiana Brasov, a charity race event where we raise funds for different humanitarian causes, with several hundred participants expected. Also, we will continue the partnership with the Romanian National Rugby Team up to the 2015 World Cup, which is extremely exciting. We will have numerous other interesting projects this year too.

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