Textiles Manufacturing Plant (Based on information from the Financial Times fDi Benchmark tool, May 2012)

Content Competitiveness of Scotland Value for Money Overall Attractiveness Quality of the Location Annual Operating Costs Quality Competitiveness General Business Environment Labour Availability and Quality Presence of an Industrial Cluster Infrastructure and Accessibility Living Environment

 The following analysis is based on fDi Benchmark, an online location benchmarking tool provided by the Financial Times (FT)  fDi Benchmark compared the Scottish Central Belt with the leading locations globally for a Textiles manufacturing plant based on an analysis of over 55 quality factors and 10 cost factors  A key emphasis was placed on: - Labour availability and quality – overall size of labour market, tightness and competition for labour and experienced industry-specific staff - Presence of industrial cluster – size of the industry, track record and export competitiveness - Infrastructure and accessibility – access to major overseas markets, quality of local infrastructure and quality of utilities  Other factors including the general business environment and living environment were also assessed Benchmarking Study

Project Profile Overview Cost FactorUsage Amount Property Total Occupancy cost (industrial rent)66,000 m² Total Occupancy cost (in town office rent)2,500 m² Weighting Model OverviewWeight Labour Availability and Quality50 Presence of an Industrial Cluster20 Infrastructure and Accessibility15 General Business Environment10 Living Environment5 Employee TypeProfile Head count Logistics and Purchasing Warehouse and Distribution Operative20 Manufacturing Head of Manufacturing10 Production Manager15 Production Operative (Highly Skilled)30 Production Operative (Skilled)125 Production Operative (Unskilled)620 R&D / Engineering Engineer10 Administration Facilities/Office Services Specialist55 Secretary15

fDi Benchmark Matrix The fDi Benchmark Matrix shows the trade off between cost and quality across the 4 selected locations for the Textiles manufacturing plant profile. The average cost and quality score is 100 for the selected locations. Source: fDi Intelligence, from the Financial Times Ltd The ‘ideal’ quadrant is the top left (high quality/lower operating costs)

fDi Benchmark Matrix The matrix is based on the weighting and cost model for the Textiles manufacturing plant profile. The weighting model identifies the key location criteria for the project and the cost model shows the primary cost inputs for the operation. The cost and quality scores are calculated using real data on all the location requirements and cost inputs. The results indicate the different location solutions for the investor as follows:  the Scottish Central Belt and Milan offer higher quality but at higher cost  Bradford and Warsaw offer lower cost, but at lower quality The Operating Cost value is in GBP - United Kingdom Pound LocationQualitative Score Operating Cost Index Operating Cost Value Bradford ,342,981 Milan ,109,435 Scottish Central Belt ,206,790 Warsaw ,491,387 Source: fDi Intelligence, from the Financial Times Ltd

Location Attractiveness Index The location attractiveness index shows the overall attractiveness of the 4 selected locations for the Textiles manufacturing plant profile. The ratio of quality to cost is 50:50 Source: fDi Intelligence, from the Financial Times Ltd

Cost Quality Competitiveness The cost quality competitiveness uses the results of the fDi Benchmark Matrix to show the value for money of each location option. The graph shows that:  The top location offering the highest quality for a given level of cost is Warsaw Source: fDi Intelligence, from the Financial Times Ltd

Cost Competitiveness The annual operating cost calculation for Textiles manufacturing plant is based on the following primary input costs: Labour Cost  The average cost across the selected locations for Textiles manufacturing plant is GBP 18,537,647  The greatest cost saving between the selected locations is GBP 12,618,049 per annum  The values in the chart below are in GBP - United Kingdom Pound Source: fDi Intelligence, from the Financial Times Ltd

Cost Competitiveness LocationLabour CostProperty Bradford12,917,6034,425,377 Milan19,578,3054,531,130 Scottish Central Belt14,721,2966,485,492 Warsaw6,406,0785,085,308 The location with the lowest operating costs is Warsaw In terms of the individual cost factors, the location with the lowest costs is:  Labour Cost: Warsaw  Property: Bradford The values in the table below are in GBP - United Kingdom Pound Source: fDi Intelligence, from the Financial Times Ltd

Quality Competitiveness The quality competitiveness assessment is based on the weight model for the Textiles manufacturing plant profile which assesses each location across the following location factors: General Business Environment, Labour Availability and Quality, Presence of an Industrial Cluster, Infrastructure and Accessibility and Living Environment. The average score for the selected locations is 100. The location with the highest quality score is Milan Source: fDi Intelligence, from the Financial Times Ltd

Quality Competitiveness Location General Business Environment Labour Availability and Quality Presence of an Industrial Cluster Infrastructure and Accessibility Living Environment Bradford Milan Scottish Central Belt Warsaw In terms of the individual quality factors, the location with the highest score is:  General Business Environment: Milan  Labour Availability and Quality: the Scottish Central Belt  Presence of an Industrial Cluster: Milan  Infrastructure and Accessibility: Bradford  Living Environment: Warsaw Source: fDi Intelligence, from the Financial Times Ltd

General Business Environment The quality competitiveness breakdown for General Business Environment for the Textiles manufacturing plant profile is shown below. The location with the highest overall score for General Business Environment is Milan Source: fDi Intelligence, from the Financial Times Ltd

General Business Environment Location Economic growth and stability Operating risk Taxation and incentives Regulatory environment Bradford Milan Scottish Central Belt Warsaw In terms of the individual quality criteria within General Business Environment, the location with the highest score is:  Economic growth and stability: Milan  Operating risk: Milan  Taxation and incentives: the Scottish Central Belt  Regulatory environment: the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd

Labour Availability and Quality The quality competitiveness breakdown for Labour Availability and Quality for the Textiles manufacturing plant profile is shown below The location with the highest overall score for Labour Availability and Quality is the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd

Labour Availability and Quality Location Overall size of labour market Tightness and competition for labour Experienced industry-specific staff Flexibility of labour regulations Bradford Milan Scottish Central Belt Warsaw In terms of the individual quality criteria within Labour Availability and Quality, the location with the highest score is:  Overall size of labour market: Milan  Tightness and competition for labour: Bradford  Experienced industry-specific staff: the Scottish Central Belt  Flexibility of labour regulations: the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd

Presence of an Industrial Cluster The quality competitiveness breakdown for Presence of an Industrial Cluster for the Textiles manufacturing plant profile is shown below The location with the highest overall score for Presence of an Industrial Cluster is Milan Source: fDi Intelligence, from the Financial Times Ltd

Presence of an Industrial Cluster Location Size of industryTrack record Bradford Milan Scottish Central Belt Warsaw In terms of the individual quality criteria within Presence of an Industrial Cluster, the location with the highest score is:  Size of industry: Milan  Track record: Warsaw Source: fDi Intelligence, from the Financial Times Ltd

Infrastructure and Accessibility The quality competitiveness breakdown for Infrastructure and Accessibility for the Textiles manufacturing plant profile is shown below The location with the highest overall score for Infrastructure and Accessibility is Bradford Source: fDi Intelligence, from the Financial Times Ltd

Infrastructure and Accessibility Location Access to major overseas markets Quality of utilities Quality of ICT infrastructure Bradford Milan Scottish Central Belt Warsaw In terms of the individual quality criteria within Infrastructure and Accessibility, the location with the highest score is:  Access to major overseas markets: Bradford  Quality of utilities: Bradford  Quality of ICT infrastructure: Warsaw Source: fDi Intelligence, from the Financial Times Ltd

Living Environment The quality competitiveness breakdown for Living Environment for the Textiles manufacturing plant profile is shown below The location with the highest overall score for Living Environment is Warsaw Source: fDi Intelligence, from the Financial Times Ltd

Living Environment Location Cost of living Attractiveness for international staff Bradford Milan Scottish Central Belt Warsaw In terms of the individual quality criteria within Living Environment, the location with the highest score is:  Cost of living: Bradford  Attractiveness for international staff: Warsaw Source: fDi Intelligence, from the Financial Times Ltd

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