The client is a listed property developer in Malaysia who has strong interest in industrial parks development. The project is one of the client’s flagship development situated in an ASEAN City, with more than 5,000 acres in size.
The client is aspired to develop an international level industrial park focusing on high-value electrical & electronics (E&E) products. In view of the massive development scale and huge capital requirement, the client wishes to formulate a concept business plan that will guide the whole development, from land negotiation, to masterplan, construction and operation.
FULL STORY
The client envisioned to develop a flagship industrial park which provides a conducive environment to house the entire industry ecosystem in one place. This implies that the park would need to provide full fledge utilities and features of an international level industrial park, tailored made to suit the need of targeted E&E industry.
The client realized there is an imperative need to benchmark the key features of industrial parks globally, to establish a baseline that would set the services standard of this development. A development of this scale would require highly specialised consultants to establish the technical specification and planning during the development phase to minimise the costs for rework. Various government involvements would be need too, to facilitate the provision of critical infrastructures and provide incentives that would attract foreign investors.
With the above objectives, the client has approach us to assist in crafting a Concept Business Plan that will guide the execution of the development.
KEY OUTCOMES
One of the key aspects for the whole industrial park development is the market positioning, in particular the focused industry or sub-segments. E&E is a relatively huge and complex industry compared to others like plantation or transportation. Different sub-segments can have vastly different value chain activities, processes and requirement, due to its highly specialised products’ characteristics. Hence, our team spent the initial part of the study to assess the E&E industry and global and regional level, in order to better understand the industry trends and identify the prospective sub-segments. We looked at the global production and trade of major E&E products, raw materials and deduced the highly potential sub-segments, taking into consideration the estimated increases in demand for various E&E products over the next ten to twenty years.
With this focused sub-segment identified, we leveraged on our internal data warehouse and shortlisted a basket of similar industrial park developments globally. A detailed comparative analysis was conducted to look at various aspects of the parks, including location, size, focused industries & sub-segments, incentives provided by the parks & respective government agencies, key milestone achievements & time taken, list & type of tenants and investors. The benchmarking information had allowed us to draw insights on the key success factors that would make our project comparable to those global champions.
Another critical facets that would determine the success of this project is the government involvement, in particular the Non-Financial Support such as provision of critical infrastructures (roads, highway, electricity, water, sewerages, internet) and Financial Support (incentives, grants, tax exemptions) for selected private sector players. To this end, we had designed several incentives packages and list of supports required that are pertinent to the project, and attractive to foreign investors. These incentives packages will then be used as the baseline for negotiation with respective government agencies.
To further justify the needs for the project, we had developed a socio-economic model that quantified the potential socio-economic benefits from the industrial park development, in particular the job creation, GDP uplift and tax revenue to government. With this, the benefits of the development were evidential, and this had served as a convincing justification for subsequent pitching with the government bodies.
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