Location manufacturing Asia

The company is facing market growth in Asia while not having enough capacity in Asia to cover full Asian market demand. Therefore the company decided to launch an Asia manufacturing location project.

Assignment

Our client is one of the leading food ingredients manufacturers globally, focusing on nutrition. The company is facing market growth in Asia while not having enough capacity in Asia to cover full Asian market demand. Therefore the company decided to launch an Asia manufacturing location project.

Project summary

The client company is one of the leading global food ingredients manufacturers with a specific range of nutritional ingredients. The company has a global network of manufacturing sites with relatively low capacity in Asia versus the other regions of the world. The company now wanted to decide where in Asia to expand production capacity: in Singapore where the company already had some presence or in another country?

Our approach

In this project we followed our proven approach to location and site selection.

The steps taken in the location selection process are as follows:

  1. Kick-off phase: scoping the project and the potential new manufacturing site from a size, labor, expansion and key location requirements perspective.
  2. Longlist analysis: a longlist of 20 potential manufacturing locations across Asia (incl. China, Malaysia, India, Thailand, Indonesia)  was defined based on initial research by BCI. A desk research analysis was conducted to compare and rank these locations based on a set of critical locations factors. The result of this step was a shortlist of 10 locations in 4 countries for further review.  
  3. Shortlist analysis: the 10 locations on the shortlist were analyzed based on a detailed set of Cost, Quality of the Business Environment and Risk factors. We conducted in-depth desk research on each of the locations, using our own databases, public sources, information from economic development agencies in the countries and cities in scope, recruitment firms, real estate brokers, etc. The result of this detailed analysis was the selection of the top-3 locations for fieldwork analysis.
  4. Fieldwork: a combined BCI/client team went on visits to the selected three top locations. Actual site options matching the client’s criteria were visited, meetings with economic development agencies, municipalities, recruiters, similar companies, etc. were held and detailed due diligence was done.
  5. Final selection: the final selection was made based on this last step and a roadmap for the implementation phase was developed.

Result

The company selected a specific location in Malaysia as the preferred location. The advantage was that this was close to the current Singapore location but with lower costs, better labor market situation and proximity to key suppliers.