Danish shipping and logistics provider Maersk will invest more than $500m to expand its supply chain infrastructure in Southeast Asia.

The supply chain expansion will help Maersk to lower the cost of trade in the region, with the company planning to add up to 480,000sqm of warehouse capacity across Malaysia, Indonesia, Singapore and the Philippines by 2026.

Part of the investment is earmarked for Malaysia’s Port of Tanjung Pelepas, 340km south of the country’s capital Kuala Lumpur. Maersk intends to turn the port into a “key integrated logistics hub” to simplify domestic and international supply chains.

In addition, Maersk has announced plans to build green fuel infrastructure, as well as pilot biodiesel-fueled trucks and operate electric vehicle (EV) trucks by mid-2024.

“Southeast Asia is the fastest growing area in the Asia Pacific,” said Vincent Clerc, CEO at Maersk. “A digitally savvy population coupled with an e-commerce boom, governmental efforts to capitalise on global manufacturing diversification, growing regional brands and rising inter-regional trade is spurring sustained growth in this area.

“Our investment reflects the commitment to being the global logistics integrator addressing the changing needs of our customers, now and in the future, while remaining steadfast to our decarbonisation agenda.”

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Elaine Low, Southeast Asia Area Managing Director at Maersk, said the investment will deliver an “end-to-end supply chain and logistics solution” in the region, adding: “Customers will have the flexibility to choose different transport models, omnichannel-fulfilment services and their preference for eco-friendly supply chain solutions depending on their sustainability goals.

Malaysia recorded over $36.9bn in FDI in 2022, with 55.1% and 78.3% of total investment going into its services and manufacturing sectors, respectively.

For Maersk, the new round of investment comes after the company’s port-operating unit APM Terminals announced in September plans to invest more than $500m in modernising and expanding the trade volume in the ports of Rijeka (Croatia) and Lazaro Cardenas (Mexico).