chemical companies

How to choose the best site for chemical companies

Choosing the right location for chemical companies is a decision that should not be made easily. Here are the right five key steps.

Choosing the right location for chemical companies is a decision that should not be made easily. Here are the right five key steps.

Any successful chemical companies is looking for new markets and new growth opportunities. In today's global economy, this may mean finding locations for new manufacturing or R & D facilities around the world. The process of siting begins when a company decides to move an existing office or production location, or add a new location to its portfolio. Choosing a location for a chemical companies is a complex and long process, which usually takes months or even years. For this reason, many companies choose to hire external consultants to advise them on the choice of production locations. SGR regularly provides site selection consulting services for customers.

1. Develop a detailed selection criteria list

The first step in choosing a new site is to develop a detailed list of selection criteria. This list should contain the most important conditions for the new site. How close are the company's customers? Where is the nearest port? How much land is needed? What is the labor force? What is the minimum power demand of the new factory? The standard will solve these and many other problems, and there will be great differences between different projects and companies. What is not important to one company may be important to another. For example, the U.S. headquarters and R & D institutions of Korean automobile manufacturers may give priority to the availability of experienced marketing and engineering personnel and be close to the headquarters, thus forcing manufacturers to focus on urban areas in California. In contrast, a Swedish producer of sawdust pellet fuel may focus on the availability of resources to produce its products and may choose a location close to a timber plantation in the southern United States. As another example, suppliers in the U.S. automotive industry may pay more attention to logistics to establish a manufacturing location chain to effectively supply products to automobile assembly plants in the Midwest and south of the United States.

2. Analyze qualitative and quantitative factors

Qualitative factors have no direct impact on the company's profits, but they are crucial to the company's success. Qualitative factors include the size and environment of the community, the local education system and the connectivity of the community to nearby markets.

Through the above three examples, it is easy to see how qualitative factors affect the location process. For example, an automobile R & D center needs experienced engineers who are either educated locally or attracted to the region by other factors. In fact, the largest concentration of automotive engineers in the United States is in the educated Detroit area. California is not one of the centers of the U.S. auto industry, but it has the potential to attract automotive engineers to the state. Auto suppliers may want to avoid big cities, because companies are more interested in the type of loyal labor that may be found in small towns. It may be necessary to set up a community university focusing on advanced automobile manufacturing technology near the factory to train the company's employees.

3. Study competitive communities and evaluate data

In most cases, the company and its consultants will request data from potential candidate states and communities, and will review public and subscription databases to generate preliminary areas of potential sites. The initial visit was to places considered appropriate. This early screening may be done by the company or its consultants. In general, SGR will visit 10 to 25 potential sites with our customers. The purpose of the visit is to eliminate inappropriate websites and narrow the scope to a few websites that meet all the company's selection criteria.

4. Consider incentives and bonuses

When the field narrows to just a few suitable locations, the company usually turns its attention to incentives. Opening a new factory is a huge investment for chemical companies. A good incentive scheme can reduce the investment risk and ultimately help the company set up a successful and profitable factory. This is beneficial to all parties.

5. Make a final decision and complete the transaction

After the shortlisted communities put together their best incentives, the prospect is a final, often painful, location decision. After a decision is made, a written agreement, commonly known as a memorandum of understanding or development agreement, is usually signed between the winning site and the potential client.

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