Supporting the site selection for the production of heavy construction machinery in Brazil

Our client

With revenues of over USD 6.0 billion and 27,000 employees, this manufacturer of heavy construction machinery is one of the top-10 players globally. In its two main business segments, concrete machinery and hoisting machinery, the company is both rank second worldwide.

case 11

Background:

  • Infrastructure investments have been rapidly developing in Brazil, representing an attractive market for a heavy machinery manufacturer. Many of the client's competitors had already localized their production in Brazil.
  • Consequently there was an urgency to define an entry strategy and identify the best option for a greenfield assembly site location.
  • Objective of this initiative was to identify possible sites for a factory location and support negotiation and the finalization of a letter of intent.

Approach:

  • We provided a high-level market and competition analysis in order to understand key drivers for the decision of where to locate the clients production facility.
  • A decision model was developed, considering aspects like logistics, infrastructure, tax, government incentives, ease-of-doing-business and labor availability.
  • On the basis of this model we simulated and compared the advantages of different states, cities and specific terrains.

Outcome:

  • Initially, based on the decision model, a ranking of states and a recommendation of two states as the final candidates have been provided.
  • In a second step, relevant cities (long-list) had been identified and 15 cities short-listed based on results from a comprehensive simulation of criteria.
  • In all these short-listed cities, terrain options were selected for technical site visits.
  • Finally, visits of prioritized terrain options with client executives were carried out and recommendations of four specific terrains (plus three contingencies) made.


 

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