Deutsche Post Bags British Health Services Contract

The spokeswoman confirmed a report in German daily Frankfurter Allgemeine Zeitung newspaper published on Tuesday.

The firm's DHL logistics subsidiary will supply 500 hospitals in Britain with food, office equipment, bed linen and medical devices. The 10-year contract will create 1,000 jobs, the paper said.

Britain's Department of Health had opened bidding for the contract and several big European logistics firms had applied for it. Deutsche Post's clinching of the contract is largely seen to be a result of its close links with British logistics company Exel, which is a leader in Britain in the field of supplying products and services.

The previously state-owned Deutsche Post bought Exel last years for a sum of 5.5 billion euros.

"A convincing offer"

Klaus Zumwinkel, CEO of Deutsche Post said the NHS contract marked a significant success for the group's strategy.

"After the take-over of Exel and given DHL's extensive expertise in the health sector, we were able to make our customer a truly convincing offer," Zumwinkel said. "We now reap the benefits of both our internationalization strategy and our broad product range."

Zumwinkel added that Deutsche Post's logistics subsidiary, DHL will in future operate a segment in Britain under the name of NHS Supply Chain, which will take over procurement and logistics services for half a million products in the public health sector.

The products include food, bed linen, office equipment, stationery, cleaning products, patient clothing, medical and surgical equipment.

In 2008, DHL will also open a new Britain-based distribution center to act as a stockholding hub for food and other products. An extra 1,000 employees are expected to be recruited to manage it. The NHS Supply Chain is meant to help Britain's Department of Health to save up to 1.4 billion euros.

A win-win situation

John Allan, CEO of DHL's logistics division and a member of the Deutsche Post management board, said the contract was a win-win situation.

"This contract is both good for staff and good for the NHS," Allan said. "We are thrilled to play such a major part in this change to manage and deliver a world-class supply chain for the NHS."