DHL Supply Chain plans to invest €350 million (about $586 million) in South East Asia over the next five years to expand its warehousing capacity, workforce and sustainability initiatives.

The company said the investment is part of a series of investments it has made over the past year, which add up to €1.35 billion (more than $2 billion) globally.

DHL Supply Chain said investments cover supply chain infrastructure, people hiring and development, automation, digitalisation and sustainability in India, Latin America and South East Asia.

DHL Supply Chain CEO Oscar de Bok said there is “an incredible opportunity” for businesses in South East Asia to strengthen supply chain resilience.

“Companies are looking at diversifying their supply chains. South East Asia, with its efficient work environment and effective trade agreements such as the China-ASEAN FTA, stands to benefit the most,” he said.

“Our multi-market investment of €350 million in this region complements our global investment strategy.

“These are strategic investments we take – despite the generally softer market environment – because we invest in the future growth of our business and strongly believe in the strategic expansion and diversification of our regional businesses.”

Through this investment, DHL Supply Chain intends to increase its current 1.6 million square metres of warehouse space in South East Asia by 25%, or by 400,000 square metres.

DHL Supply Chain Asia Pacific CEO Javier Bilbao said the company is building logistics centres that can cater to future demand through robotics and sustainability initiatives.

“For example, we are equipping our upcoming fifth facility in Penang – PLH5 with state-of-the-art automated pallet storage and retrieval system and goods-to-person robotics technology to handle small parts picking.”

DHL Supply Chain plans to continue developing its Warehouse Management Systems while introducing other warehouse technology in selected markets such as auto-stores, automated storage and retrieval systems for pallets and large goods, and automated guided vehicles.

It is also aiming to having carbon-neutral facilities for all new buildings: 100% of DHL Supply Chain’s facilities in Singapore and Malaysia have achieved carbon neutrality.