Cities in France and the Netherlands are the cheapest places in Europe for food and drink processors to locate manufacturing plants, according to a cost comparison study by KPMG.
The firm's "Competitive Alternatives" study is a guide for comparing business costs in North America, Europe and Asia Pacific. When comparing costs worldwide, Singapore comes out on top among industrialized countries as the cheapest business location for food processors, followed by the Netherlands, France, the UK, Canada, Italy, the U.S., Germany and Japan.
"The study is the most thorough comparison of international business costs ever undertaken by KPMG, and contains valuable information for any company seeking cost advantage in locating their international business operations," KPMG said in a statement.
The study measures the combined impact of 27 significant business cost components that are most likely to vary by location. The study covers 17 industry operations in the nine industrialized countries. The basis for comparison is the after-tax cost of startup and operations, over 10 years.
In the ranking among European cities, Potiers in France comes out on top as the cheapest place from which to process food, followed by Mulhouse. Potiers ranked as the third-cheapest location worldwide, while Mulhouse ranked fourth.
In Europe, Mulhouse is followed by Brabant Stad, the Netherlands, Montpellier in France, Amsterdam, Lincoln (UK), East Netherlands, Barnsley (UK), Naples (Italy), Leicester (UK), Derby (UK), Livorno (Italy), Florence (Italy), Chernnitz (Germany), and Darmstadt (Germany).
The most expensive place worldwide is in Hamamatsu, Japan.
The study used a representative food processing operation to compare locations. The operation is modeled on a small independent food processor, producing medium-value, non-perishable products such as packed, dried, or canned foods or confectionery.
The operation is characterized by moderate facility and other initial investment requirements, a workforce with a relatively high proportion of lesser-skilled employees and moderate energy requirements.
KPMG figured the plant would have annual sales of $31m at full production, with materials and sales costs accounting for 54 percent of sales. Other operating costs would add up to six percent of sales.
The study is available at KPMG's Competitive Alternatives site (www.competitivealternatives.com).