25 Jan 2020

Manufacturing Footprint Optimization: Site Selection

Background

  • German-owned chemical company with an ageing facility was being pressured by local authorities to relocate to an “official” chemical processing zone, as part of the Chinese government’s initiative to combat industrial pollution
  • EWA was engaged to conduct a comprehensive site selection process and provide the client with quantified site recommendations

Approach

Step 1: Create functional definition of plant
  • Purpose for expansion, customers, supply chain, products, capital equipment, etc.
  • Definition of the site requirements & specifications:
  • Size of plant, land requirements, structural requirements, utilities and consumption, logistics, labor force requirements, ground compaction, water table, number of employees, manufacturing space, office space, employee facilities, etc.
Step 2: Analysis of company performance influencers
  • Logistics, location of customer base, location of suppliers, location of business partners, freight & transportation costs, current property costs, current operational costs, government incentives, etc.
Step 3: On the ground interaction
  • Identification of 7 business/chemical parks for further exploration based upon site & company criteria
  • Personal site visits, face-to-face negotiations, meetings with other companies located in the individual business parks & interaction with local government officials
  • Tours with company executives
  • Negotiations and confirmations of land price and tax incentives
  • Analysis of the impact on startup and operational costs
Step 4: Recommendation of the 3 quantified location options with full analysis

Results

  • Significant tax and land incentives were attained by EWA negotiations
  • Client approved EWA recommendation and final negotiations are currently in process.
  • Client has engaged EWA in the role of “Owners Representative” for follow-on activities including coordinating design and overseeing construction
More Case Studies