Establishing a Plastics Manufacturing Plant in Scotland A cost/quality comparison (Based on information from the Financial Times fDi Benchmark tool – May 2012)

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 Contents

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 establishing a Plastics Manufacturing Plant based on an analysis of over 55 quality factors and 10 cost factors A key emphasis was placed on: - Presence of industrial cluster - Labour availability and quality - Infrastructure and accessibility Other factors including the general business environment and the living environment were also assessed Benchmarking Study

Project Profile Overview Cost FactorUsage Amount Property Total Occupancy cost (industrial rent)49,000 m² Total Occupancy cost (in town office rent)800 m² Utilities Electricity48, kWh Industrial Gas300,000 m³ Weighting Model OverviewWeight Presence of an Industrial Cluster45 Labour Availability and Quality25 Infrastructure and Accessibility15 General Business Environment10 Living Environment5 Employee TypeProfile Head count Manufacturing Head of Manufacturing1 Production Manager3 Production Operative (Highly Skilled)17 Production Operative (Skilled)46 Production Operative (Unskilled)11 R&D / Engineering Engineer10 Administration Secretary2

fDi Benchmark Matrix The fDi Benchmark Matrix shows the trade off between cost and quality across the 7 selected locations for the Plastics 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 Plastics 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 offers higher quality at lower cost than the average of all the selected locations  Frankfurt and Manchester offer higher quality but at higher cost  Dresden, Cork and Newcastle 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 Cork ,892,940 Dresden ,737,485 Frankfurt ,348,980 Helsinki ,987,414 Manchester ,127,112 Newcastle ,177,225 Scottish Central Belt ,893,440 Source: fDi Intelligence, from the Financial Times Ltd

Location Attractiveness Index The location attractiveness index shows the overall attractiveness of the 7 selected locations for the Plastics 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 locations offering the highest quality for a given level of cost are the Scottish Central Belt and Frankfurt  the Scottish Central Belt and Frankfurt offer an above average level of quality and good value for money as there relative quality is higher than their relative cost. Source: fDi Intelligence, from the Financial Times Ltd

Cost Competitiveness The annual operating cost calculation for Plastics manufacturing plant is based on the following primary input costs: Labour Cost, Property and Utilities  The average cost across the selected locations for Plastics manufacturing plant is GBP 7,023,513  The greatest cost saving between the selected locations is GBP 3,810,188 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 CostPropertyUtilities Cork2,672,2792,691,833528,826 Dresden3,399,7132,880,241457,530 Frankfurt4,008,4343,883,015457,530 Helsinki3,143,3375,490,676353,399 Manchester1,905,1794,795,484426,449 Newcastle1,986,7152,764,060426,449 Scottish Central Belt2,087,8114,379,179426,449 The locations with the lowest operating costs are the Scottish Central Belt and Dresden In terms of the individual cost factors, the locations with the lowest costs are:  Labour Cost: Newcastle and Manchester  Property: Cork and Newcastle  Utilities: Helsinki and Newcastle 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 Plastics 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 locations with the highest quality scores are the Scottish Central Belt and Frankfurt 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 Cork Dresden Frankfurt Helsinki Manchester Newcastle Scottish Central Belt In terms of the individual quality factors, the locations with the highest scores are:  General Business Environment: the Scottish Central Belt and Manchester  Labour Availability and Quality: the Scottish Central Belt and Manchester  Presence of an Industrial Cluster: Frankfurt and Manchester  Infrastructure and Accessibility: Frankfurt and Helsinki  Living Environment: Helsinki and Dresden Source: fDi Intelligence, from the Financial Times Ltd

General Business Environment The quality competitiveness breakdown for General Business Environment for the Plastics manufacturing plant profile is shown below The locations with the highest overall scores for General Business Environment are the Scottish Central Belt and Manchester Source: fDi Intelligence, from the Financial Times Ltd

General Business Environment Location Economic growth and stability Operating risk Taxation and incentives Access to finance Regulatory environment Cork Dresden Frankfurt Helsinki Manchester Newcastle Scottish Central Belt In terms of the individual quality criteria within General Business Environment, the locations with the highest scores are:  Economic growth and stability: Frankfurt and Manchester  Operating risk: Manchester and the Scottish Central Belt  Taxation and incentives: Cork and the Scottish Central Belt  Access to Finance: Helsinki and the Scottish Central Belt  Regulatory environment: Cork and Helsinki Source: fDi Intelligence, from the Financial Times Ltd

Labour Availability and Quality The quality competitiveness breakdown for Labour Availability and Quality for the Plastics manufacturing plant profile is shown below The locations with the highest overall scores for Labour Availability and Quality are the Scottish Central Belt and Manchester 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 Cork Dresden Frankfurt Helsinki Manchester Newcastle Scottish Central Belt In terms of the individual quality criteria within Labour Availability and Quality, the locations with the highest scores are:  Overall size of labour market: the Scottish Central Belt and Manchester  Tightness and competition for labour: Dresden and Cork  Experienced industry-specific staff: the Scottish Central Belt and Frankfurt  Flexibility of labour regulations: Manchester and 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 Plastics manufacturing plant profile is shown below The locations with the highest overall scores for Presence of an Industrial Cluster are Frankfurt and Manchester Source: fDi Intelligence, from the Financial Times Ltd

Presence of an Industrial Cluster Location Size of industryTrack record Cork Dresden Frankfurt Helsinki Manchester Newcastle Scottish Central Belt In terms of the individual quality criteria within Presence of an Industrial Cluster, the locations with the highest scores are:  Size of industry: the Scottish Central Belt and Manchester  Track record: Manchester and Frankfurt Source: fDi Intelligence, from the Financial Times Ltd

Infrastructure and Accessibility The quality competitiveness breakdown for Infrastructure and Accessibility for the Plastics manufacturing plant profile is shown below The locations with the highest overall scores for Infrastructure and Accessibility are Frankfurt and Helsinki Source: fDi Intelligence, from the Financial Times Ltd

Infrastructure and Accessibility Location Access to major overseas markets Quality of utilities Quality of ICT infrastructure Cork Dresden Frankfurt Helsinki Manchester Newcastle Scottish Central Belt In terms of the individual quality criteria within Infrastructure and Accessibility, the locations with the highest scores are:  Access to major overseas markets: Frankfurt and Manchester  Quality of utilities: Helsinki and Frankfurt  Quality of ICT infrastructure: Helsinki and Dresden Source: fDi Intelligence, from the Financial Times Ltd

Living Environment The quality competitiveness breakdown for Living Environment for the Plastics manufacturing plant profile is shown below The locations with the highest overall scores for Living Environment are Helsinki and Dresden Source: fDi Intelligence, from the Financial Times Ltd

Living Environment Location Cost of living Attractiveness for international staff Cork Dresden Frankfurt Helsinki Manchester Newcastle Scottish Central Belt In terms of the individual quality criteria within Living Environment, the locations with the highest scores are:  Cost of living: the Scottish Central Belt and Dresden  Attractiveness for international staff: Helsinki and Frankfurt Source: fDi Intelligence, from the Financial Times Ltd

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