Food and Beverages Manufacturing Plant A cost/quality comparison (Based on information from the...

Food and Beverages Manufacturing PlantA cost/quality comparison(Based on information from the Financial Times fDi Benchmark tool – May 2012)

Competitiveness of Scotland

Value for Money

Overall Attractiveness

Quality of the Location

Annual Operating Costs

Quality Competitiveness

General Business Environment

Labour Availability and Quality

Presence of an Industrial Cluster

Infrastructure and Accessibility

Living Environment

Contents

The following analysis is based on fDi Benchmark, an online location benchmarking tool provided by

the Financial Times (FT)

fDi Benchmark compared the Scottish Central Belt with the leading locations globally for a Food and Beverages

manufacturing plant based on an analysis of over 55 quality factors and 10 cost factors

A key emphasis was placed on:

- Presence of industrial cluster

- Labour availability and quality

- Infrastructure and accessibility

Other factors including the general business environment and living environment were also

assessed

Benchmarking Study

Project Profile Overview

Cost Factor Usage Amount

Property Total Occupancy cost (industrial rent) 33,000 m²Total Occupancy cost (in town office rent) 1,000 m²Utilities Electricity 48,000 100kWhWater 170,000 m³Industrial Gas 1,800,000 m³

Weighting Model Overview Weight

Presence of an Industrial Cluster 45

Labour Availability and Quality 25

Infrastructure and Accessibility 15

General Business Environment 10

Living Environment 5

Employee Type Profile Head count

Manufacturing

Head of Manufacturing 1

Production Manager 7

Production Operative (Highly Skilled) 15

Production Operative (Skilled) 67

Production Operative (Unskilled) 95

Administration

Facilities/Office Services Specialist 12

Secretary 3

fDi Benchmark Matrix

The fDi Benchmark Matrix shows the trade off between cost and quality across the 5 selected locations for the Food & beverages manufacturing plant profile. The average cost and quality score is 100 for the selected locations.

Source: fDi Intelligence, from the Financial Times Ltd

The ‘ideal’ quadrant is the

top left

(high quality/lower operating costs)

fDi Benchmark Matrix

• The matrix is based on the weighting and cost model for the Food & beverages manufacturing plant profile. The weighting model identifies the key location criteria for the project and the cost model shows the primary cost inputs for the operation. The cost and quality scores are calculated using real data on all the location requirements and cost inputs.

• The results indicate the different location solutions for the investor as follows: the Scottish Central Belt and Barcelona

offer higher quality at lower cost than the average of all the selected locations

New York City offer higher quality but at higher cost

Montreal offer lower cost, but at lower quality

The Operating Cost value is in GBP - United Kingdom Pound

Location Qualitative ScoreOperating Cost

IndexOperating Cost

Value

Barcelona 112.6 94.5 7,959,071

Lyon 72.3 101.1 8,511,616

Montreal 72.5 98.9 8,326,333

New York City (NY) 115.1 109.3 9,206,066

Scottish Central Belt 127.5 96.3 8,106,190


Location Attractiveness Index

The location attractiveness index shows the overall attractiveness of the 5 selected locations for the Food & beverages manufacturing plant profile. The ratio of quality to cost is 50:50


Cost Quality Competitiveness

The cost quality competitiveness uses the results of the fDi Benchmark Matrix to show the value for money of each location option. The graph shows that:

The top location offering the highest quality for a given level of cost is the Scottish Central Belt the Scottish Central Belt also offers an above average level of quality and good value for money as its relative quality is

higher than its relative cost


Cost Competitiveness

The annual operating cost calculation for Food & beverages manufacturing plant is based on the following primary input costs: Labour Cost, Property and Utilities

The average cost across the selected locations for Food & beverages manufacturing plant is GBP 8,421,854

The greatest cost saving between the selected locations is GBP 1,246, 994 per annum The values in the chart below are in GBP - United Kingdom Pound


Cost Competitiveness

Location Labour Cost Property Utilities

Barcelona 4,253,539 2,649,003 1,056,528

Lyon 5,130,684 2,455,161 925,770

Montreal 5,354,792 2,097,775 873,764

New York City (NY) 6,829,775 1,961,164 415,125

Scottish Central Belt 3,692,327 3,139,578 1,274,284

The location with the lowest operating costs is Montreal

In terms of the individual cost factors, the location with the lowest costs is:

Labour Cost: the Scottish Central Belt Property: New York City Utilities: New York City

The values in the table below are in GBP - United Kingdom Pound



The quality competitiveness assessment is based on the weight model for the Food & beverages manufacturing plant profile which assesses each location across the following location factors: General Business Environment, Labour Availability and Quality, Presence of an Industrial Cluster, Infrastructure and Accessibility and Living Environment. The average score for the selected locations is 100.

The location with the highest quality score is the Scottish Central Belt



Location

General Business

Environment

Labour Availability and

QualityPresence of an

Industrial ClusterInfrastructure

and AccessibilityLiving

Environment

Barcelona 10 29 58 12 4

Lyon 10 16 31 10 5

Montreal 17 20 20 9 6

New York City (NY) 22 41 37 11 5

Scottish Central Belt 16 20 78 8 5

In terms of the individual quality factors, the location with the highest score is:

General Business Environment: New York City Labour Availability and Quality: New York City Presence of an Industrial Cluster: the Scottish Central Belt Infrastructure and Accessibility: Barcelona Living Environment: Montreal



The quality competitiveness breakdown for General Business Environment for the Food & beverages manufacturing plant profile is shown below

The location with the highest overall score for General Business Environment is New York City



Location

Economic growth and stability

Operating riskTaxation and

incentivesRegulatory

environment

Barcelona 1.90 2.52 2.56 2.72

Lyon 1.38 2.88 1.67 4.31

Montreal 1.54 4.75 4.38 6.49

New York City (NY) 8.97 5.31 3.11 4.43

Scottish Central Belt 1.21 7.03 3.28 4.55

In terms of the individual quality criteria within General Business Environment, the location with the highest score is: Economic growth and stability: New York City Operating risk: the Scottish Central Belt Taxation and incentives: Montreal Regulatory environment: Montreal



The quality competitiveness breakdown for Labour Availability and Quality for the Food & beverages manufacturing plant profile is shown below

The location with the highest overall score for Labour Availability and Quality is New York City



Location

Overall size of labour market

Tightness and competition for

labour

Flexibility of labour regulations

Barcelona 4.27 21.16 3.60

Lyon 1.57 9.91 4.05

Montreal 3.29 9.91 6.78

New York City (NY) 19.92 10.73 9.98

Scottish Central Belt 2.20 10.80 6.84

In terms of the individual quality criteria within Labour Availability and Quality, the location with the highest score is: Overall size of labour market: New York City Tightness and competition for labour: Barcelona Flexibility of labour regulations: New York City



The quality competitiveness breakdown for Presence of an Industrial Cluster for the Food & beverages manufacturing plant profile is shown below

The location with the highest overall score for Presence of an Industrial Cluster is the Scottish Central Belt



Location Size of industry Track recordIndustry

Specialisation

Barcelona 24.50 21.43 12.08

Lyon 15.51 4.02 11.95

Montreal 10.89 6.70 2.50

New York City (NY) 24.93 9.38 2.63


In terms of the individual quality criteria within Presence of an Industrial Cluster, the location with the highest score is: Size of industry: the Scottish Central Belt Track record: Barcelona Industry Specialisation: the Scottish Central Belt



The quality competitiveness breakdown for Infrastructure and Accessibility for the Food & beverages manufacturing plant profile is shown below

The location with the highest overall score for Infrastructure and Accessibility is Barcelona



Location

Access to major overseas markets

Quality of utilitiesQuality of ICT infrastructure

Barcelona 3.81 5.18 2.51

Lyon 2.42 3.95 3.94

Montreal 2.60 3.50 2.66

New York City (NY) 3.75 3.69 3.52


In terms of the individual quality criteria within Infrastructure and Accessibility, the location with the highest score is: Access to major overseas markets: Barcelona Quality of utilities: Barcelona Quality of ICT infrastructure: Lyon


Living Environment

The quality competitiveness breakdown for Living Environment for the Food & beverages manufacturing plant profile is shown below

The location with the highest overall score for Living Environment is Montreal


Living Environment

Location

Cost of livingAttractiveness for international staff

Barcelona 2.07 2.29

Lyon 2.77 1.97

Montreal 2.90 3.58

New York City (NY) 2.01 2.73

Scottish Central Belt 2.74 1.93

In terms of the individual quality criteria within Living Environment, the location with the highest score is: Cost of living: Montreal Attractiveness for international staff: Montreal


To realise the potential,please contact:

Scottish Development International150 Broomielaw, Atlantic Quay Glasgow G2 8LU Scotland, UK T +44 141 228 2828F +44 141 228 2089www.sdi.co.uk

Worldwide offices in: Americas, Europe, Middle East, Africa and Asia Pacific

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