Making the optimal industrial site selection in ASEAN

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Background: Tractus was engaged by an existing client manufacturing industrial fans and ventilation products to conduct a comparative analysis on optimal industrial site selection for a planned expansion. The client and their Singapore-based partner asked Tractus to review a group of Asean markets and validate an existing management decision to invest in Thailand.

Project: Tractus started by setting a project objective of identifying locations that would yield a 30% reduction in costs and generate sufficient competitive advantages to expand market share and sales volumes. Tractus identified critical location criteria based on a review of the client’s core business drivers including cost, operating conditions and risk factors. Modelling the relative attractiveness of Thailand, the Philippines, Malaysia, Vietnam, Cambodia, Myanmar and Indonesia, Tractus bench marked them against Singapore. Models were developed that broke down site selection criteria into sub-components such as domestic market size; operating conditions; transparency/corruption; economic risks; regulatory risk; access to raw materials; and logistics among several other. These were scored and ranked outcomes using multiple-factor decision making methodologies weighted against the client’s outlook for each sub-component.

Solution: Tractus’ analysis and recommendations provided the client with a clear, data-based and process-backed view of the various markets across three different weighting scenarios. While the results validated Thailand as an option to meet the client’s criteria, it also opened Vietnam and Malaysia to consideration based on fixed and variable cost and operating condition performance as well as and proximity to Singapore.

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