Strategic site selection for the industrial plant is a key point in greenfield and brownfield projects, which often determines their success or failure. Do you have a clear plan, but are you considering whether it is better to start on a greenfield site or take advantage of the existing buildings and infrastructure? This choice is crucial and has an impact on its overall sustainability, efficiency, and long-term competitiveness. In this article, we will explore the advantages and disadvantages of both site types and provide the basic criteria to consider when deciding between greenfield and brownfield.
Benefits of a Greenfield Site
- Flexibility in the planning and design of new structures and infrastructure.
- Lower risk of pollution thanks to the use of new and modern materials.
- Ability to optimize space and processes according to own requirements and trends.
Disadvantages of a Greenfield Site
- Higher initial costs associated with the construction of infrastructure and buildings from scratch.
- Longer time frames for project completion compared to the brownfield project.
- Need to build new connections and infrastructure.
Benefits of a Brownfield Site
- Using existing infrastructure and structures can lead to lower costs and faster project delivery.
- Contribute to the revitalization and sustainable redevelopment of abandoned or polluted areas.
- Potentially less regulatory risk compared to a greenfield site.
Disadvantages of a Brownfield Site
- The need for remediation of contaminated land or buildings may increase costs and cause project delays.
- Constraints and potential complications associated with existing structures and infrastructure.
- Legal and ownership issues related to abandoned areas may arise.
“Greenfield projects offer the advantage of being able to design everything from scratch, without existing restrictions. However, the initial challenges are often underestimated. The energy, time, and cost of actually starting a project from ground zero are significant and can create substantial difficulties. Brownfield projects are usually quicker to start because there are already usable resources in place. However, dismantling and adapting existing structures often proves to be more complex than building a completely new one. This can lead to unplanned costs and delays that were not taken into account at the start of the project.”
Werner Schmitz, Managing Owner, Wesconi
Key Data for Selecting an Industrial Plant Location
Before selecting a suitable site for the industrial plant, it’s crucial to gather information that significantly influences the decision-making process.
- Census data provides insights into the region’s demographic profile and workforce composition, aiding in staffing and market targeting.
- Geographic Information Systems (GIS) offer data on topography, infrastructure, and environmental hazard zones.
- Economic development agencies highlight support programs and incentives.
- Real estate listings and brokers help identify available properties.
- Labor market information reveals the availability of skilled labor
- Transport and infrastructure data ensure efficient operations.
- Environmental data on air, water, and soil quality helps ensure the chosen site is sustainable, safe, and compliant with environmental regulations.
- Market research, competitive analysis, and social and cultural data help identify market opportunities and threats and help tailor marketing strategies.
- Local business organizations and government planning departments can offer perspectives on the business environment and potential challenges and opportunities in the region.
Wesconi Helps You Find the Right Location for Your Greenfield or Brownfield Project
Based on many years of experience, we have a well-established procedure for finding a suitable site for greenfield or brownfield projects, which has proven to be effective.
1. Preliminary Planning & Requirement Definition
- Requirement Definition: The client determines the specific needs and goals of the project, including production capacity, workforce requirements, and logistical considerations.
- Geographical Preferences: Together with the client we outline preferred regions based on strategic factors such as market access, proximity to suppliers, and cost considerations.
- Initial Budget Planning: We estimate the budget for land acquisition, development, and associated costs.
2. Market Research & Site Search
- Market Analysis: We conduct market research to identify potential regions that align with the set project goals.
- Identifying Potential Sites: We use real estate databases, industry contacts, and local government resources to compile a list of potential sites.
- Sites Screening: We use various criteria for screening sites, such as land size, accessibility, infrastructure availability, and environmental factors.
3. Feasibility Studies & Preliminary Evaluation
- Site Visits: We conduct initial visits to shortlisted sites to assess their suitability and gather preliminary data.
- Feasibility Studies: We perform initial feasibility studies, including environmental assessments, geotechnical surveys, and infrastructure evaluations.
- Zoning & Regulatory Review: We check zoning regulations and ensure the site can accommodate the planned project.
4. Detailed Site Evaluation
- Cost Analysis: We perform detailed cost analysis, including land acquisition, development, and potential remediation costs.
- Risk Assessment: We assess risks related to environmental issues and regulatory compliance.
- Stakeholder Engagement: We engage with local authorities, community leaders, and other stakeholders to gauge support and identify potential obstacles.
5. Negotiation & Site Selection
- Final Site Visits: We conduct final visits to the top candidate sites for a thorough evaluation.
- Negotiation: We negotiate all terms with landowners or real estate agents, including price, lease terms, and any conditions of sale.
- Site Selection: Together with the client we evaluate all gathered data and make the final site selection decision based on comprehensive analysis.
6. Securing the Site
- Legal Due Diligence: We conduct thorough due diligence to ensure no legal impediments to acquiring or using the site.
- Purchase or Lease Agreement: We finalize the purchase or lease agreement, ensuring all terms and conditions are clearly outlined and agreed upon.
- Permitting & Approvals: We begin the process of securing necessary permits and approvals from local, regional, and national authorities.
7. Transition to the Development Phase
- Site Preparation: We start site preparation activities, such as land clearing, grading, and setting up temporary facilities.
- Infrastructure Planning: We plan for the development of essential infrastructure, including roads, utilities, and drainage systems.
- Detailed Design & Engineering: We initiate detailed design and engineering work to prepare for construction.
“Overall, greenfield projects usually take longer due to the extensive groundwork required, whereas brownfield projects can often be expedited by leveraging existing infrastructure and potentially simpler permitting processes. However, the exact time frame for each project will vary depending on factors such as project size, regulatory environment, market conditions, or specific requirements of the client. An important factor affecting the project timeline is also the communication and involvement of stakeholders, whether on the client side, government and regulatory bodies, or suppliers. In addition to the location scouting and in cooperation with our local partners, we also provide our clients with other services such as project designing, budgeting, securing permits, pre-construction activities, infrastructure development, procurement, construction/redevelopment, health and safety management, commissioning and testing, and operational setup.”
Lenka Luptakova, Marketing Manager, Wesconi
