Case Study

Italian manufacturing company setting-up plant in India

Italian manufacturing company was willing to set-up a plant in India, but was in a dilemma about the location of the plant which was a very critical aspect as it would involve heavy amount of foreign investment.

Every entrepreneur is faced with the problem of deciding the best site for location of his plant or factory. An ideal location is one where the cost of the product is kept to minimum, with a large market share, the least risk and the maximum social gain. It is the place of maximum net advantage or which gives lowest unit cost of production and distribution.

According to present scenario, the important considerations for selecting a suitable location are natural or climatic conditions, availability and nearness to the sources of raw material, transport costs in obtaining raw material and also distribution or marketing finished products to the ultimate users, access to market, availability of Infrastructural facilities, availability of skilled & non-skilled labour, technically qualified & trained managers, location of banking & financial institutions , government incentives, tax benefits as provided in SEZ, EOU, FTZ, and other areas as per government regulations.

The Italian company approached NBC for its opinion on the issue.

NBC team conducted detailed analysis of various criteria, vis-à-vis suppliers, customers, electricity rates, raw material availability, mobility, labour availability, infrastructure, tax benefits and other related issues statewise which are sensitive to the location of the plant.

NBC prepared detailed and comprehensive locational study for the client which helped them in selection of preferred location of the plant . Client was able to reap the benefits of the advantageous location and plant turned profitable in first year of the operations.

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