Client Situation
Our client is an ~$850 Mn diversified conglomerate and one of the world’s leading manufacturer of niche Transformer & Specialty Oils, Power Transmission Conductors & Cables. It offers over 400 types of oils and a comprehensive range of cables and conductors. It also exports to 100 countries, with strong relationships with major global end users. The Middle East accounted for a significant portion of their revenue, and its management was keen to set up a manufacturing location in the UAE, with a preference for setting up in a Free Zone for its benefits and incentives. Having conducted multiple engagements for the client previously, and due to its significant experience in the region and industry, Cedar was brought in to help conduct a location assessment and feasibility study.
Cedar’s Approach
Cedar used its significant experience in location and market assessments, using its 4 step methodology which included a combination of primary and secondary data collection to develop a location selection matrix for the client.
- Cedar worked with the client to define key parameters on which to compare 4 potential locations, such as key infrastructure and land availability, facilities etc .
- Cedar then conducted a detailed assessment of the shortlisted locations covering the parameters through a mix of primary and secondary research .
- Cedar ranked and weighed the data, using its own and industry insights.
- Based on the assessment and ranking conducted, Cedar recommended a location.
- Determined total capex and opex costs involved in setting up a plant in that location and provided the client a high level overview of the plant layout and equipment .
- Additionally Cedar also identified a list of key vendors/contractors that would assist in plant set up .
Outcome
Post analysis of multiple locations and a detailed feasibility study, Cedar made strategic recommendations on selection of a best-fit location for the client.
- Cedar provided the client an informed decisioning framework which encompassed detailed information including plant layouts, cost of materials, transportation costs, shipping and port charges amongst others.
- Client invested ~ $6-7.5 Mn to set up a plant in the recommended location.
- Engaged with key vendors and contractors that Cedar identified.
- Plant expected to completed by December 2015.
- Post announcement of the new plant, client stock price gained 1.5% .
- Cedar made strategy work!.