It All Starts with Location

German industrial conglomerate ThyssenKrupp AG required a site to support the production of 5.1 million metric tons of high-quality products made from steel slabs.

" Trite as it may sound, teamwork was key...and the teaming process was important as we relied on the expertise and professional services of Cushman & Wakefield’s Business Consulting team to help us find the best location for our plant. "
- Thomas Woelker, Chief Project Officer, Vice President, ThyssenKrupp Steel USA

The Challenge
In early 2006, ThyssenKrupp enlisted C&W to determine the optimal location for a new carbon and stainless steel processing facility in the United States. C&W's Business Consulting Group led the development and execution of a comprehensive location strategy for ThyssenKrupp's $3.7 billion, 2,700-employee mill, which would utilize the steels slabs from Brazil. Previously, C&W Business Consulting had assisted ThyssenKrupp with a large manufacturing project in Asia.

Our Impact
C&W identified critical location factors and a search area based on ThyssenKrupp's market access objectives, transport-mode requirements (port, river, rail), and very large-scale infrastructure needs. Upon identifying ThyssenKrupp's priorities, we conducted desktop and field evaluations of 69 sites across 19 states along major U.S. waterways to identify feasible options for further due diligence. Our screening analyses on key operating conditions and costs, such as inbound/outbound logistics, labor costs, and transportation and utility infrastructure and rates led us to focus on the region along the Gulf of Mexico.

The C&W Team and our trusted third-party providers orchestrated parallel due diligence programs under an aggressive time frame. We assisted ThyssenKrupp's key decision makers with their site elimination through an efficient and logical decision-support process.

Upon determining three finalist locations in the southeastern United States we completed parallel, in-depth labor market studies, financial analyses and negotiations, and managed government relations in the three finalist states.

These efforts facilitated the selection of two finalist sites, and provided a comprehensive financial comparison of these Louisiana and Alabama locations, along with a thorough assessment of operational advantages, disadvantages and risks.

The Outcome
Provided thorough site selection process and decision making tools to assist ThyssenKrupp in eliminating 68 sites to their final site location over 16 months. For the two finalist locations, incentives packages totaling $811 million in Alabama and $1.8 billion in Louisiana were negotiated. Based on team cohesiveness, labor quality, shipping solutions, utility costs, site infrastructure, and support from neighboring states, ThyssenKrupp's final selection was a 3,600-acre site in Mobile, Alabama. The mill is one of the largest private-sector investments in the United States in recent history, and supports ThyssenKrupp's goal to expand its NAFTA market share in high-quality carbon and stainless steel flat products for automotive, household products and related industry sectors. Construction is underway for the $3.7 billion, 7 million square foot steel processing facility, scheduled to open in 2010. The mill will ultimately employ 2,700 workers.

For more information contact:

Andy Mace
(717)505-8046
Andy.Mace@cushwake.com

Services:

Global Business Consulting

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