< Previous18 JULY 2021 S I T E S EL E C T I O N W ORLD REPOR T S Let’s Hear it for “Mama Cheers” Ugandan entrepreneur Julian Omalla received government grants and loans totaling $10 million to build a fresh juice factory to complement her popular “Cheers” line of fruit beverages. Starting from scratch in 1996, Omalla built a small empire that commanded 60% market share during its peak. “With the new factory, we hope to expand our market to all corners of the world,” said the businesswoman a ectionately known as “Mama Cheers.” Omalla, recognized by the U.N. for her e orts to support women, sources her beverages from locally grown mangoes, guavas and citruses on 1,700 acres (690 hectares) that she purchased 10 years ago. by GARY DAUGHTERS gary.daughters@siteselection.com Source: UNCTAD Source: Getty Images UN: FDI to Rebound in 2021 Global foreign direct investment fl ows are expected to bottom out in 2021 and regain some of the ground lost during pandemic-plagued 2020, says a report issued in late June by the United Nations Conference on Trade and Development (UNCTAD). The agency expects an FDI rebound of 10% to 15%. FDI fl ows plunged globally by 35% in 2020, to $1 trillion from $1.5 trillion the previous year, amid global lockdowns. The drop was heavily skewed towards developed economies, where FDI fell by 58%, in part due to corporate restructuring and intrafi rm fi nancial fl ows. Green Investments in the Persian Gulf Apartnership led by India’s biggest solar developer announced plans to invest $2.5 billon to manufacture ammonia and hydrogen using green technologies in Oman’s Special Economic Zone at Duqm. ACME Solar Holdings says it chose Oman for its location, high solar irradiation and government supports. Solar energy is to power the facility, which is intended to supply markets in the U.S., Europe and Asia. In April, Saudi Arabia announced plans to build a $5 billion green ammonia plant in the Neom megadevelopment on the Red Sea. S I T E S E L E C T I O N JULY 2021 19 The Pope Goes Electric Electric automaker Fisker, which plans to launch production next year, announced in late May that it will supply Pope Francis with a customized, electric “Popemobile.” Fisker co-founders Henrik Fisker and Geeta Gupta-Fisker received a private audience with the Pope on May 20. In a statement, the company stated that, “the spacious interior of the Fisker Ocean SUV supports a large, modern, all-glass cupola, o ering accessibility and visibility for Pope Francis to greet the faithful.” In June, Fisker announced a long-term agreement with Magna International to build the Fisker Ocean at Magna’s carbon-neutral facility in Graz, Austria. Source: Getty Images China Ups the AI Ante China expanded its push to become an artifi cial intelligence superpower through a decision to establish fi ve new AI Innovation zones. Tailored to region- specifi c assets and needs, the new AI zones are to focus on smart infrastructure (Beijing), smart manufacturing (Tianjin), smart fi nance (Hangzhou), intelligent industries (Guangzhou) and small business innovation (Chengdu). Under a newly issued set of incentives, foreign investors in AI can benefi t from tari exemptions on imported equipment, preferential land prices, looser land use regulations and lower corporate income tax.22 JULY 2021 S I T E S EL E C T I O N A SIA Functional Beverages Re-Establish Roots in APAC Functional Foods” are associated with a modern healthy lifestyle movement. But their origins are found across Asia — from the ancient Vedic texts of India to Chinese traditional medicine. Eastern cultures have a long history infusing tea and water with natural ingredients like matcha, ginseng and moringa that provide health bene ts. APAC represents the largest region of the global US$ billion functional beverage market and is also the fastest growing. Companies are increasingly attracted to the world’s fastest growing economic region and its . billion consumers. e most common ingredient compound used in functional foods are probiotics, which provide many health properties and are found in yogurt, teas, kombucha and single-serve shots. e sale of fermented beverages globally is expected to reach $ . billion by , and the APAC region is a major source for that growth. e rapid growth of functional beverage consumption across APAC is prompting companies to establish a facility under two primary strategies: ( ) identifying a co-packer or ( ) establishing a captive facility. Companies assessing co-packers typically adopt two sub-strategies. Under a less capital-intensive strategy, a concentrate is provided to a co-packer who provides toll processing and lling. In the more capital-intensive strategy, the company will invest to manufacture the concentrate on-site and deliver it to the co-packer for processing and lling. In the captive investment approach, a company will invest in a complete beverage processing facility from production through delivery. If an Asia-wide site location analysis is not feasible, then de ning the search area so that it encompasses the center of market is a rst step. e center of market is often China, where spending on health and wellness products exceeds $ billion annually. A strategy Tractus has seen over the last several years, regardless of sector, is a China-for- China strategy — where a facility is established in China speci cally to meet China market demand. However, a plant located in China creates risk for companies that also seek to supply product to other markets across APAC. Consumers from Japan to Singapore remain skeptical of purchasing a premium health-promoting F&B product exported from China, and as a result, countries including Vietnam, ailand and Malaysia are often used to serve the wider APAC market. Co-Packing Manufacturing De ning the search area for a co-location strategy also requires consideration of the types of packaging and the presence of companies that have experience with the required machinery. Common packaging materials in APAC include aseptic multi-layer material, plastic, paper, by JAMES MEISENHEIMER, FOOD & AGRICULTURE LEAD, TRACTUS ASIA editor@siteselection.com Functional Beverages Re-Establish Roots in APAC Functional Beverages Re-Establish Roots in APAC “ Bottling facility in the Asia Pacifi c Photo courtesy of Tractus Asia24 JULY 2021 S I T E S EL E C T I O N aluminum, and glass. While the region and its consumers are adopting more sustainable values, PET packaging is the most common. Aseptic packaging produced by Tetra Pak is also widely used across APAC; Tractus recently concluded a co-location assignment that identified and screened over 115 companies with Tetra Pak machines across a multi-country search area. The screening process can begin by assessing co-packers against a set of critical “Must Have” and important “Want to Have” selection criteria. Often, this process begins with assessing the site characteristics, determining if the co-packer site provides adequate utilities and floor space for the proposed operations. Unlike a typical site location assessment, the critical and important criteria will also include factors related to the reputation, experience and company values of the partner. Components that can be integrated include assessing a co- packer’s commitment to company values like sustainability, as well as financial strength. The pool of potential co-packers will narrow to a qualified short list for further evaluation. A factor that is often overlooked at this stage of the process is aligning the company’s commercial schedule with an operational timeline that includes procurement of machinery, build- out of a facility, commissioning of the line and regulatory approvals required for operations. Critical within the alignment is identifying the regulatory approvals needed for sale domestically and for export. Establishing whether the co-packer holds certifications such as HACCP, GMP, ISO and Halal — and whether those certifications can be incorporated into the product — can dramatically reduce certification applications. Captive Manufacturing A company forecasting demand in excess of 175 million liters per year will likely conduct a captive manufacturing site location assessment. Under an end-to-end strategy a different set of critical criteria must be addressed to reduce the potential risk they may pose to the investment. Industrial zones in China, Vietnam and Taiwan have adopted policies to attract high-value investments focused on Industry 4.0 sectors. These policies put thresholds on the revenue generation that must be met. A common practice in the zones along China’s eastern seaboard is meeting tax generation requirements. Tractus has encountered tax generation thresholds that vary from $40 to $111 per sq. m. The space required for a multiple-line bottling facility with adequate logistics and storage may not be able to fulfill these requirements and zone management are unlikely to compromise on this issue. Therefore, establishing the sale price and volumes upfront in a site location will allow these factors to be incorporated into the search process and avoid risk of disqualifying a site that otherwise meets all other criteria. Zones in China and Vietnam also have plot ratio, or building density, requirements. In China, zones mostly require that the facility has a plot ratio of 1, meaning that if the plot is 60,000 sq. m. the facility must have 60,000 sq. m. of definable floor space under roof. Zones, however, can have ratios as high as 2.5 to 1. While these ratios may be negotiable, it is critical that a potential investor develop a conceptual layout of a planned facility so that minimum site requirements can be determined. Zones may also, according to plot size, place restrictions on available utilities. This is most commonly applied to water and wastewater but can also be applied to natural gas and electricity. Zones in Taiwan and Malaysia can limit water consumption to as little as 330 liters per sq. m. per day, which may be substantially below the necessary inputs for a beverage processing facility. Identifying zones without restrictions on water consumption and wastewater generation and those with high levels of excess capacity for water and wastewater, therefore, becomes a key consideration in a beverage facility site selection analysis. James Meisenheimer, based in Bangkok, is the sector lead for the Food and Agriculture practice at Tractus Asia (www.tractus-asia.com), a leading Pan- Asian strategy advisory and consulting firm. APAC represents the largest region of the US$208 billion functional beverage market.26 JULY 2021 S I T E S EL E C T I O N INVES TMENT PROFILE: MARYLAND Baltimore Bets on Baltimore Bets on The New Economy Luck is what happens when preparation meets opportunity. Attributed to the first-century Roman philosopher Seneca, the sentiment applies well to the ways in which Baltimore began to pre- position itself, long before COVID-19, for the “new economy” of goods moving directly, and swiftly, from producers to consumers. “Today, as we sit here post-COVID, or almost post-COVID, we’ve realized the importance of supply chains in our everyday lives,” says Aaron Tomarchio, executive vice president for corporate affairs of 3,200-acre (1,295-hectare) Tradepoint Atlantic, Baltimore’s signature logistics development. Officially launched with the opening of a FedEx distribution center in 2017, Tradepoint Atlantic, swiftly at 60% buildout, already supports some 10,000 jobs at the site of an iconic former Bethlehem Steel mill. “More investments into improving our nation’s supply chain are coming,” Tomarchio tells Site Selection, “and being here in the Mid- Atlantic, Baltimore is certainly poised to take advantage of that.” Just as television ratings are all about attracting eyeballs, the fundamental precept of e-commerce is to agglomerate as many goods as possible as close as possible to as many human heartbeats as possible for rapid distribution among them. In that sense, northern Maryland occupies a prime spot along the southern link of the I-95 corridor stretching from Washington, D.C. to New York. That advantage has drawn the attention of Kansas City-based NorthPoint Development, the No. 1 industrial developer in the U.S. for the past five years, as named by Real Capital Analytics. NorthPoint is involved in distribution-related projects in Baltimore and Hagerstown, with more in the planning stages. “We look very closely at timetables, people within a given truck drive,” says Jed Momot, NorthPoint’s chief strategy officer. “In the area between Baltimore and Philly, there are approximately 30 million people within that three- hour haul. That’s same-day delivery. And then within the one-day truck drive, you’re probably reaching 40% of the U.S. population. Northern Maryland is right in the sweet spot.” Maryland, believes Momot, benefits from the notion that the farther north one goes along that prized eastern corridor, the harder it is to do business. “In New Jersey and New York, it is extremely hard to get deals done,” he tells Site Selection. “So, things continue to outflow from there. Maryland by GARY DAUGHTERS gary.daughters@siteselection.com Above: Weller Development Company’s Port Covington on the Baltimore waterfront Source: Weller Development Company S I T E S E L E C T I O N JULY 2021 27 This Investment Profile was prepared under the auspices of the Maryland Department of Commerce. For more information, please contact Karen Glenn Hood at (410) 767-6318 or karen. glennhood@maryland. gov. On the web, go to https://commerce. maryland.gov/. will win a lot of these projects not only because you can reach so many people via the I- corridor, but because they tend to be development and business friendly. We are looking to invest more in Maryland, for sure.” From Steel Mill to Logistics Powerhouse e sheer scope of Tradepoint Atlantic, on the southern end of the Patapsco River as it opens into Chesapeake Bay, mirrors Maryland’s ambitions. Incentives supporting the project re ect the state government’s early recognition of opportunities presented by investments in e-commerce, especially given Maryland’s privileged location. “We had Republicans and Democrats — federal, state and local levels of government collectively saying, ‘we want to re-envision the Bethlehem steel mill.’ So, in about seven years, we’ve been able to turn a contaminated former steel mill into a site now that’s employing , people,” says Tomarchio. “Not many jurisdictions can say that. I think it’s emblematic of what can happen if we collectively come together and decide that if we can muster the will to do something, we can make it happen.” With an enviable combination of deepwater berths, railroad, highway connections and storage space, Tradepoint Atlantic has attracted major distribution operations from more than companies, including Amazon, Home Depot and Floor Décor. Volkswagen created more than jobs last summer at a new port and processing facility that’s eventually to serve some dealers in the mid-Atlantic. Four new tenants, including McCormick and BMW, says Tomarchio, are moving in, and Amazon is working on its third Tradepoint installation. Tomarchio, a former municipal planning o cial, says the jobs being created at Tradepoint match the needs of both the new economy and workers seeking entrée into it. “ ese are jobs that provide on-ramps for careers,” he says. “ ey provide opportunities for folks and communities that typically have a hard time accessing jobs. All too often we want to focus on guring out who’s the next aerospace engineer or biochemist or web developer. We sometimes overlook that there are communities in our nearby cities that lack access to job opportunities. We are providing that opportunity of an on-ramp to a job where people can build from and begin to build a life for themselves.” Believing in Baltimore is is not to ignore Maryland’s most precious asset — its brainpower. at’s the lure of Port Covington, a -acre mixed-use redevelopment along prime, Baltimore riverfront. “From a site selection standpoint, if you want access to a really deep, robust talent pool in the Mid-Atlantic, there’s really no better place to do it than here in Baltimore,” says Scooter Monroe, head of o ce leasing for Weller Development Company, the project’s master developer. Maryland’s concentration of leading scienti c talent — nurtured at esteemed institutions that include Johns Hopkins University, the University of Maryland, the National Institutes of Health, U.S. Food and Drug Administration, National Security Agency and the National Institute of Standards and Technology — aligns with the development team’s vision of Port Covington as a hub of life sciences, cybersecurity, data and computer sciences supported by abundant housing and innovative amenities. “Everybody’s chasing the talent pool,” says Monroe, “and we’re creating an environment that’s really inspiring, one that’s really a global destination to attract innovative companies.” Port Covington, within a federal Opportunity Zone, is backed by $ million in public nancing and $ million from the Goldman Sachs Urban Investment Group, which invests in “double bottom line” projects that bene t communities. With a commitment to % a ordable housing, the developers have funded some $ million to a local neighborhood coalition, as part of one of the largest Community Bene ts agreements in Baltimore’s history. An initial phase comprising ve o ce buildings totaling . million sq. ft. is to begin delivering in late . Alexandria Real Estate Equities, a leading developer in the life sciences space, is actively marketing a -,-sq. ft. laboratory building to a potential anchor tenant. “What we’re looking for now,” says Monroe, “is a partner from a tenancy standpoint who believes in what we believe, who believes in Baltimore, and who wants to be a part of this story.” We are looking to invest more in Maryland, for sure.” — Jed Momot, Chief Strategy O cer, NorthPoint Development it happen.” We are it happen.”Next >