IBM Global Business Services
Plant Location International
MKT1: Improving private sector land access
Site Availability Perspective from the investor
Roel Spee
IBM – Plant Location International
Washington D.C., 9 March 2009
© Copyright IBM Corporation 2008
IBM – Plant Location International
Content
 Role of Site Availability in Location Decision Making
 Key Concerns of Companies related to Site Availability
 Role of Sites in Economic Development
 Practical tips for site marketing
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Typical steps in location selection process
1. Define Project Drivers
Specifications
Create Longlist
and
2. Analyze Long-list of Candidate Locations
Identify Shortlist
3. Evaluate Short-listed Locations
Select Preferred Location
4. Site Search & Negotiations
Select Preferred Sites and
Start Negotiations
De-select less attractive locations:
- In theory: many location options
- High level, quick analysis
- Based on desk research
- Focus on key cost & quality drivers
- Confidential
- High level business case
Select best location solution:
- Detailed analysis of many factors
- Forward looking
- Field work to understand dynamics
and identify pitfalls
- Assess implementation risks
- Interviews and negotiations
- Full business case
- Few locations only (short list)
5. Implementation
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Strategic investment drivers and location criteria
 Strategic drivers for location choice
-
Access to new market, Optimize cost efficiency, Access to Resources, Consolidation
of operations, etc
 Strategy has impact on location requirements and their relative importance
 The most critical requirements determine the initial longlist of locations
-
Examples: Market/client proximity, Cost levels, Stability, Safety, …
 Site availability in most cases is not a critical factor for country/region
selection, but becomes very important towards the final decision making
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In international location selection processes, location factors
vary throughout the process
Macro
1. Define Project Drivers
Specifications
Create Longlist
Stability/risk
Market
Macro
Countries
2. Analyze Long-list of Candidate Locations
Identify Shortlist
Workforce/Skills
Infrastructure
Costs
3. Evaluate Short-listed Locations
Select Preferred Location
Sites
Incentives
Quality of Life
4. Site Search & Negotiations
Select Preferred Sites and
Start Negotiations
Regions
5. Implementation
Micro
5
and
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Sites
Micro
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However: need for exceptional sites can turn site availability
into critical factor, and impact scope of location assessment
Macro
Sites
Stability/risk
Market
Sites
Workforce/Skills
Infrastructure
Costs
Sites
Incentives
Quality of Life
Micro
6
1. Define Project Drivers
and
Specifications
Create Longlist of Sites
Sites
2. Analyze Long-list of Candidate Sites
Identify Shortlist of Sites
Sites
3. Evaluate Short-listed Sites
Select Preferred Site
4. Negotiations
Final Decision
5. Implementation
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Macro
Micro
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Key concerns for investors when evaluating sites (1)
 Ownership
 Many different owners creates uncertainty about availability and timing for an investor
 Protection of ownership is a key concern
 Zoning
 Incorrect or incomplete zoning creates uncertainty
 Timing / availability
 Land has to be ‘shovel ready’
 Pollution
 Land has to be pollution free
 Don’t expect investors (your clients) to clean the land
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Key concerns for investors when evaluating sites (2)
 Transport access to the land
 From major transport routes to the local plot
 Utility connections
 Lack of proper connections can cause huge delays, and extra investment costs
 Permits required: for construction, discharges (environmental), etc.
 Complexity and bureaucracy are to be avoided
 Time taken for procedures
 ‘Speed of implementation’ can be a decisive factor (see next page)
NOTE: Speed will become very important when investment picks up in near future
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Duration of getting construction permits
Median duration (days) that local experts indicate is necessary to deal with
construction permits
1426
1179
704
Best practice
601
350
336
411
243
e
Zi
m
ba
bw
ti
Ha
i
a
Ru
ss
i
l
Le
so
th
o
Br
az
i
er
ia
Ni
g
Un
i
Ch
i
na
144
Ro
m
an
ia
128
Et
hi
op
ia
te
d
Ki
ng
do
m
107
au
r it
iu
s
M
Ke
ny
a
la
nd
ia
Sw
az
i
Tu
ni
s
at
es
St
te
d
Ko
re
a
Un
i
So
ut
h
100
93
84
40
34
Source : World Bank Doing Business, 2009
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Best practice countries in registering and protecting property
Protection of Property Rights - Score 0-10
10
Germany
Denmark
Net herlands
Singapore
Sweden
Japan
Unit ed Kingdom
9
Canada
Belgium
8
Sout h Af rica
Malaysia
Spain
Hungary
India
7
Unit ed St at es
UAE
Bot swana
6
5
Uganda
4
Bangladesh
Czech Republic
Morocco
Zambia
Burkina Faso
Brazil
Philippines
China
Mexico
Viet
nam
Et hiopia
Kenya
Poland Tanzania
Senegal
Bulgaria
Nigeria
Angola
Ukraine
Russian Federat ion
3
2
1
0
0
1
2
3
4
5
6
7
8
9
10
Registering Property - Score 0-10
The Registering Property component is a combined PLI Score using data on the number of days and the number of procedures it takes to register
property, taken from the World Bank’s Doing Business 2009. The Protection of Property Rights scores are taken from the Fraser Institute’s Economic
Freedom Index.
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Role of land in economic development
 Site availability is one of many factors impacting attractiveness of location
 Tailored site development strategies can steer economic development in
preferred directions, by focusing on:
-
Targeted sectors: tailoring sites to specific sectoral needs (for example: logistics,
heavy industry, etc)
-
Targeted regions within your country: stimulating job creation in regions where
need is highest
 Site development must be aligned with overall economic development
strategy

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Land is a ‘Must Have’, but land alone does not win investment projects
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Attractiveness of business environments is determined by
many factors considered by corporate executives
Regulatory
framework
Taxation
Workforce
Business
Environment
Attractiveness
Incentives
Business
costs
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Living
environment
Infrastructure
Real
estate
Natural
disaster
Knowledge &
innovation
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IBM – Plant Location International
Example of improvement of competitive position as result of short
term real estate improvement actions
Relative cost-quality attractiveness of Serbian locations for electronics industry,
before and after recommended improvement of site availability and accessibility
Electronics
Electronics
5,50
5,50
5,30
5,30
5,10
5,10
Bucharest
Bucharest
4,90
4,70
Qualitative score
Qualitative score
4,90
Zagreb
4,50
4,30
4,70
Zagreb
4,50
Belgrade
4,30
Nis
Belgrade
4,10
4,10
Nis
3,90
Novi Sad
3,90
Skopje
Skopje
Novi Sad
3,70
3,70
3,50
135
125
115
105
95
Operating cost index (average = 100)
As is
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85
75
65
3,50
145
135
125
115
105
95
85
75
65
Operating cost index (average = 100)
Improved site access and availability
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IBM – Plant Location International
Some final practical tips for marketing sites to investors
 Use maps to show geography and accessibility: before, during and after site visit
 Use logical business routes when bringing investors to sites (know where the site is!!!)
 Don’t propose/show sites which are clearly not available yet
 Show all individual important features; present site from different viewpoints
 Give the investor time to absorb impressions
 Be prepared to explain activities of neighbour companies
 Be very careful with offering brownfield sites. Don’t expect investors to solve your
environmental problems!
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Contact Details
IBM Global Business Services
Plant Location International
Plant Location International (PLI)
Global Location Strategies
A service of IBM Global Business Services
Web-site: www.ibm.com/gbs/pli
Roel Spee
Global Leader
Phone: +32 475 915 832
Office: +32 2 416 59 28
E-mail: roel.spee@be.ibm.com
© Copyright IBM Corporation 2008
IBM Global Business Services
Plant Location International
Annex
Introduction to
IBM – Plant Location International
9 March 2009
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IBM – Plant Location International
PLI is a global leader in Global Location Strategies,
supporting two groups of clients
1. Corporate Executives
•
Support with location strategies: where should we operate our business units?
 Defining global footprints, screening countries/regions, local site selection, incentives negotiations
•
•
Across all industries
Covering all relevant business functions: manufacturing, distribution, R&D, HQs, shared
services, contact centers, data centers, etc
 IBM-PLI is a global market leading dedicated corporate location consultant!
2. Economic Development Organizations (frequently Public Sector)
•
Support with efforts to attract and retain business
 Improvement of business environment
 Inward investment strategies
•
Based on our unique insight in the investor’s perspective
•
Services do not include investment attraction (conflict of interest)!
 IBM-PLI is unique in advising EDOs on the basis of its unrivalled corporate experience!
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IBM – Plant Location International
Brief history
18
1960
Plant Location International (PLI) founded as independent consulting firm in
Brussels, Belgium. Focus on location advisory services
1989
PLI fully acquired by Price Waterhouse, becomes PW-PLI
1996
US-team established to serve Americas market
Brussels based PLI serves as key practice for EMEA and Asia-Pacific
1998
Price Waterhouse merges with Coopers & Lybrand: PwC-PLI
2002
PwC Consulting acquired by IBM:
IBM Global Business Services becomes new home of IBM-PLI
2006
Global operating model agreed with IBM global management:
PLI transforms into virtual globally integrated operation
2009
PLI: Global team of 25 dedicated location consultants, supported by network of
thousands of industry experts and local strategy consultants around the world
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Global resources of Plant Location International
Global PLI hub
Dedicated PLI resources
Local PLI coordinators
Research back office
Center for Economic
Development Research
Americas
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EMEA
Asia-Pacific
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IBM – Plant Location International
Plant Location International
Example of services to corporate clients
 Strategic location planning: strategic advice on which geographic areas provide opportunities for
locating or consolidating various business functions in alignment with the overall business strategy
 Definition of key location criteria: helping corporate executives define and prioritize the key criteria for
assessing locations for specific business functions.
 Screening of multiple location options: assessing and ranking locations on key cost and quality
criteria to quickly identify the most interesting candidate locations for investment.
 Review and validation of preferred location options: validation or second opinion of a preferred
location to assess its suitability based on specific project parameters.
 Site or facility search: researching and validating available sites and buildings meeting the client’s
project specifications once a preferred country/region has been identified.
 Consolidation of existing sites: projections and assessment of location impact of consolidation
scenarios; assisting with determining best site for future consolidation.
 Disposal of obsolete sites and facilities: defining and implementing an approach to identify target
groups of companies, develop marketing materials, research possible new users.
 Advice on financial support: analysis of financial incentives available to corporations in countries
around the world: amounts, conditions, application, etc.
 Monitoring business environments: constant screening of dynamics in areas of interest such as to
provide early advice on upcoming opportunities and threats.
 Strategy workshops: workshops to optimize company’s own location strategy efforts based on latest
insight in market trends and location dynamics, as well as data sources and evaluation techniques.
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Examples of corporate clients for location advisory services
* Multiple assignments, only most recent names used
ABN-AMRO*
AGFA*
Alcan
Alza*
American Express
Amgen
Anheuser-Busch
AstraZeneca*
Avaya*
Aventis*
Avery Dennison
Avis*
Avnet
BAT
Baxter*
Bayer*
Becton Dickinson*
Bekaert
BF Goodrich*
Biogen
BMW
BOC International
Bose*
Boston Scientific*
BP Amoco*
Bristol Myers Squibb*
Brunswick
Cadbury Schweppes
Campbell Foods*
Caterpillar
Chiquita
Citibank*
Claire’s
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Coca Cola
Compaq Computer*
Concert (AT&T/BT)
Corning*
Daikin*
DHL*
Delphi
Deutsche Bank*
Diageo
Disney
Dow Chemical*
Dresdner Bank
DSM
Du Pont
Duty Free Shoppers*
Eastman Chemical
Eaton
Eli Lilly
EMC
Energizer
Engelhard
Ericsson
Esco
ExxonMobil*
FMC
Fokker AESP
Ford Motor*
Franklin Mint
GAP
GATX
General Electric*
General Instruments
General Motors*
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Gillette*
GlaxoSmithKline*
Goodyear/Dunlop*
Guardian
Haagen-Dazs
Heinz*
Henkel
Hercules
Hertz
Hewlett-Packard*
Hitachi
Hoechst
Holcim*
Hoogovens
HSBC
IBM*
ICI
ICON*
Idemitsu
IFF
Inbev
Indspec
Ingersoll Rand
Intel
International Paper
James Hardie*
John Deere*
Johnson & Johnson*
JP MorganChase*
JVC
KBC
Kellogg
Kimberly Clark*
Knauf Insulation
Kodak*
Kohler*
Kone
Kraft Foods
LA Gear
Level 3
Levi Strauss
Little Tikes
Lloyds
Lufthansa
Master Foods
Mattel*
Medtronic*
Merck*
Meritor
Microsoft
Mitsubishi
Mobil Plastics
Monsanto*
Motorola
Nashua
National Instruments*
National Semiconductor
NEC
Nestlé*
Netscape*
Nike*
Nissan
NKT Cables
Norske Skog
Nortel
Novartis*
Nuon
Orica Mining*
Owens Ollinois
Paramount
Pepsico*
Phillip Morris*
Philips*
Procter & Gamble*
PricewaterhouseCoopers*
Prudential Investment
Quintiles
Radnor
Ralston Purina
Raychem
Reader’s Digest
Reckitt & Colman
Reuters*
Rohm & Haas
Rothmans
Rubbermaid
Sabena
Samsung*
SAS Airlines
Saville Systems
Schering
Scott Paper
Shell*
Shire Pharmaceuticals
Siemens*
Sigma Coatings
SKF
Smiths Food
Societé Général
Sony*
Standard Chartered Bank*
Stork
Sun Electric
Sun Microsystems
Swissair
Tandem
TDK
Technicolor
Telia
Telxon
Tetra Pak*
Texas Instruments
Toshiba
Toyota*
TPG Group
UBM
Unilever*
Union Carbide
United Technologies
UPM-Kymmene
Vaillant
Visteon
Volvo
Warner Lambert
Wellman
Westvaco
Whirlpool
WL Gore
Woolworth
WordPerfect
Xerox
Xircom
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IBM – Plant Location International
Plant Location International
Example of services to economic development organizations
 Competitive location benchmarking analysis - provide detailed tailor made analysis of the
attractiveness of regions/countries as investment locations relative to key competitors, covering a range
of sectors and business functions, and based on typical investor’s requirements
 Investment trend analysis - provide comprehensive investment trend analysis for countries and
regions across the world using IBM’s Global Investment Locations Database (GILD) - a unique
database that records investment project announcements around the world on an ongoing basis
 Investment promotion strategies - define the objectives for inward investment promotion, setting out
priorities and targets for sector/business functions
 Economic impact analysis - analyze impact of policies and initiatives on the attractiveness of specific
locations to investors, coupled with broader economic impact assessments for investments
 Marketing strategies and tools - develop marketing tools and initiatives based on investor needs,
including the unique IBM-PLI Location Benchmarking Tool to validate your location’s proposition and
market this to prospective investors using their own location selection criteria and techniques
 Analysis and advice on Economic Development Organization (EDO) effectiveness - analyze and
provide advice on structure, organization and operations of EDOs, based on international best practices
 Training – train economic development staff on the corporate location decision process, how to
undertake investment promotion activities and initiatives, and deal with investors
 Strategy workshops – conduct workshops to review investment promotion strategies and provide
advice on trends and upcoming changes
 Location Intelligence On Demand – deliver ongoing support services, providing prompt responses to
urgent requests for market or location intelligence
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Examples inward investment & economic development clients
* Multiple assignments
Albania
Antilles
Australia
Austria
Azerbadjan
Belgium
Canada
Cape Verde
Caribbean
China
Costa Rica
Czech Rep.
Denmark
Djibouti
Estonia
Ethiopia
France
Germany
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Foreign Investment Promotion Center
Government of Curaçao
Invest Australia*
City and Port of Brisbane
DSRD New South Wales°*
Invest Victoria*
Austrian Business Agency*
Vienna International Airport
Port of Baku
Brussels Airport
Flanders Foreign Investment Office*
Office for Foreign Investm. Wallonia*
Port of Antwerp*
Invdustry Canada
Invest Canada/DFAIT*
Montreal International
Province of Quebec
Toronto
Promex
Carribean Inward Investment Office
Xi’an Pharma Park, Shaanxi
CINDE*
CzechInvest*
Copenhagen Capacity*
Invest in Denmark*
Government of Djibouti
Port of Tallinn
EIA Ethiopian Investment Authority
Ile de la Réunion
Ile de France, Paris
Invest in France/Datar*
Nord-Pas de Calais Developpement*
Port of Le Havre*
Frankfurt Airport
HWF Hamburg
IIC (former East German States)*
Nordrhein Westfalen*
Saxony Economic Development Corp*
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Ghana
Guadeloupe
Hong Kong
Hungary
India
Ireland
Israel
Italy
Kuwait
Luxembourg
Malaysia
Mexico
Morocco
Namibia
Netherlands
New Zealand
Philippines
Poland
Portugal
Puerto Rico
Russia
Saudi Arabia
Singapore
South Africa
Ghana Investment Promotion
Port of Guadeloupe
ITC Hong Kong
ITD Hungary*
Government of Gujarat SEZ
Positra SEZ
Enterprise Ireland*
IDA Ireland*
Israeli FEPZ
PROMOS Milan
Sviluppo Italia*
Kuwait
Ministry of Transport
Port Klang
Industrial Port Development Board
Government of Morocco
Namibia Investment Centre
Airport Amsterdam-Schiphol*
Airport Maastricht-Aachen
Netherlands Foreign Investm.Agency*
Ports of Amsterdam and Rotterdam
Auckland City Council
Investment New Zealand
Cagayan
Industrial Development Agency
PAIZ Polish Inward Investment Agency*
Special Economic Zones (various)
AIP Regio Norte
Embassy of Portugal/ICEP*
Instituto de Fomento
Moscow
St. Petersburg
APEC
General Investment Authority
Ministry of Finance
PSA Port of Singapore Authority*
Singapore Econ. Development Board*
COEGA*
Trade and Investment South Africa
Spain
Suriname
Sweden
Switzerland
Tanzania
Thailand
Tunisia
Trinidad Tobago
UAE
UK:
- England
PromoMadrid*
Government of Suriname
ISA Invest in Sweden Agency*
Canton of Schaffhausen
Tanzania Investment Centre
Industrial Authority Esate of Thailand
Government of Tunisia
Port Authority of Trinidad & Tobago
Jebel Ali Port Authority, Dubai
Advantage West Midlands*
Creative Sheffield
East Midlands Development Agency*
MIDAS Manchester*
North West Development Agency*
UK Trade & Investment*
- Scotland
Edinburgh IFC
Scottish Development International*
- Northern Ireland Invest Northern Ireland*
- Wales
Welsh Development Agency*
USA
Commonwealth of Pennsylvania*
Greater Jamaica, NY
Greater Phoenix Economic Council*
Maryland DBED*
Michigan EDC
New York State
Research Triangle Park, NC*
State of Florida
State of Indiana
State of Louisiana
TexasWorkforce Commission
Toledo, OH
International
Asian Development Bank*
organisations
COMESA
European Commission*
FIAS/World Bank/MIGA*
OECD*
UNCTAD*
WAIPA*
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IBM – Plant Location International
Tools and Techniques
GILD – Global Investment Locations Database
Share of estimated production jobs
in Asia, 2006
GILD is a unique investment
tracking database developed by
Plant Location International:
24
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Pakistan
4%
Singapore
4%
India
29%
Malaysia
8%
Viet Nam
23%
Job creation
Specialization by function, 2006
China
23%
G
lo
b
al
ia
In
d
hi
na
C
ae
l
Is
r
s
Ph
ilip
pi
ne
N
am
Other
R&D
Services
Production
Vi
et
 Monitors investment project
announcements globally on a
daily basis
 Includes ‘greenfield’ projects &
major expansions
 Data on each project includes
company, sector, sub-sector,
activity, origin, location, jobs, 100%
90%
sites, incentives, markets
80%
being served etc.
70%
 Allows trend analysis by
60%
activity and (sub-)sector and 50%
40%
competitive analysis by
30%
location (country, region,
20%
community)
10%
 Indicates where peer
0%
companies have decided to set
up similar facilities
Other
Thailand Philippines 6%
1%
2%
IBM Global Location
Trends reports
© Copyright IBM Corporation 2008
IBM – Plant Location International
IBM-PLI’s Location Benchmarking Tool: a powerful marketing tool (web
based and pc based) convincing investors of a location’s unique advantages
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