< Previous18 NOVEMBER 2024 SITE SELECTION by ALEXIS ELMORE alexis.elmore@siteselection.com Queensland Steps In I n support of bringing the largest precision-fermented bioproducts facility in the Asia-Pacifi c region to Australia’s coastal town of Mackay, the Queensland Government will deliver vital funding. Through the state’s Industry Partnership Program, it will provide New South Wales–based Cauldron Ferm fi nancial assistance and facilitation toward the construction of the Cauldron Bio-fab. The plant will carry a 500,000-liter fermentation capacity, whose inputs will be used for food, biofuel, beauty items and more. The company has said the fi rst-of-its- kind facility will be critical for national resilience and addressing issues like food insecurity, decarbonization and a domestic supply chain. Australian national science agency CSIRO says precision-fermented products are part of the nation’s National Protein Roadmap that “highlights an extra [AU]$13 billion opportunity for Australia to meet protein demand by 2030.” Centered for Semiconductor Success I n October 2024, Tokyo-based Kokusai Electric Corporation opened the doors to its new Tonami Manufacturing Center in the Toyama Prefecture. The facility represents the company’s second location in Japan, following its Toyama Technology & Manufacturing Center in Toyama City just 35 minutes from the city of Tonami. The new center will double Kokusai’s current semiconductor equipment production capacity while using advanced production technologies to increase effi ciency and reducing workloads. It will be the main operations site for products such as deposition process equipment and treatment process equipment. Kokusai Electric Corporation unveiled a second semiconductor equipment manufacturing center in Japan. Photo: Getty Images Cauldron Ferm has plans for future investments like the Cauldron Bio-fab globally moving forward. Photo courtesy of Cauldron Ferm Capacity Expansion in Congo T he Pointe-Noire port located in the Republic of the Congo will soon receive a $438 million investment to construct a new East Mole port terminal and create 900 new jobs. “The construction of the East Mole is a joint project of the Port Autonome de Pointe-Noire and Congo Terminal to increase the nautical and operational capacities of the Pointe-Noire container terminal, in order to anticipate the new needs of users of the Port of Pointe-Noire and shipping lines that will be able to ship in their largest vessels,” says Congo Terminal Managing Director Anthony Samzun. By 2027, the company will introduce the new terminal fi t with 750 meters (2,460 ft.) of quays with a depth of 17 meters (55 ft.), featuring 64 acres of quayside and 16 fully electric gantries. The project will allow the port to cater to larger capacity vessels from Asia, India and Europe and handle more than 2.3 million twenty-foot equivalent containers per year. Congo Terminal is making a new project investment to cater to future growth. Photo courtesy of the Port of Pointe-Noire WORLD REPORTS SITE SELECTION NOVEMBER 2024 19 India’s Solar Boost A n investment that will soon aid India in cutting carbon emissions by 50% by 2030 has been made at the Addl. Butibori Industrial Park in the city of Nagpur. Located in the western state of Maharashtra, the $1.5 billion manufacturing facility from leading renewable energy group Avaada looks to fulfi ll the needs of the entire solar value chain. The company will produce batteries, electrolyzers, PV cells and modules and ingot-wafer among other items such as module glass and frames. The fi rst phase of the project will introduce a Wafer-to-Module project with a capacity of 5 Gigawatts (GW) for solar cells and 3 GW for modules. As Avaada looks to fi ll 6,000 new roles, the company will partner with local Industrial Training Institutes and other workforce development organizations to boost the regional workforce’s industry skills. Avaada’s project aims to support India’s future energy transition. Photo: Getty Images The new World Robotics statistics show an all- time high in the number of industrial robots automating production around the world. The annual installation fi gure of 541,302 units in 2023 is the second highest in history. It is only 2% lower than the record of 552,946 units installed in 2022.” — International Federation of Robotics President Marina Bill in noting that robotic installation reached over 4.2 million in 202420 NOVEMBER 2024 SITE SELECTION I ndia’s biggest steelmaker is at it again. Having poured close to $12 billion over the past decade into its massive operation in the coal-rich eastern state of Odisha, Tata Steel commissioned what it calls the country’s biggest blast furnace in late September. “With the Phase II expansion,” the company said in a statement, “Odisha has emerged as the largest investment destination in India for Tata Steel.” The $3.2 billion project is to more than double capacity at the plant in Kalinganagar from 3 million tons per year to 8 million tons per year. Tata says the expansion also includes a pellet plant, coke plant and cold rolling mill, each incorporating state-of-the art technologies. What Tata calls the world’s largest Top Gas Recovery Turbine is one of several features the company installed to minimize energy and water usage. “The expansion,” said T.V. Narendran, CEO and managing director, in a statement, “not only strengthens Tata Steel’s position as a leader in high-end, value-added steel segments but also showcases our advanced engineering prowess. It underscores,” he added, “our commitment to boosting private investment in India, aligning with the nation’s vision for self- reliance and sustainable industrial growth.” As that statement suggests, Tata’s expansion is not taking place in a vacuum. Already the world’s second-largest steel producer, India has set ambitious targets for steel production to support what is the world’s fastest growing major economy, with GDP expected to grow by up to 7.2% in FY 2024- 2025. Tata says the expanded plant capacity will meet the growing demands of India’s automotive, construction, energy, shipbuilding and defense sectors. Overall, India’s crude steel production grew from 127 million tons in FY 2022-2023 to 145 million tons in 2023-2024, according to the country’s steel ministry. India’s National Steel Policy, adopted in 2017, aims to boost production to 300 million tons per year by 2030. The Indian Steel Association anticipates demand to grow by up to 10% annually for the near future. India’s JSW, another top steelmaker, is among those going big to help meet the increasing demand. In February, JSW announced plans to invest $7.8 billion dollars in a crude steel complex, also in Odisha state. JSW, according to SteelRadar, expects to increase crude capacity from its current 30 million tons to 39 million tons. The complex is to include a cement grinding plant and, according to India’s Business Standard, an electric vehicle and battery plant to be built at a cost of $4.8 billion. Also in February, Nikkei Asia reported that Japan’s Nippon Steel and Luxembourg-based ArcelorMittal are expanding their joint plant in Gujarat state on India’s west coast, acquired in 2019 for $5.7 billion. The AM/NS joint venture is reportedly investing $4.9 billion to build two new blast furnaces that will increase capacity by 50% to 15 million tons by 2026. by GARY DAUGHTERS gary.daughters@siteselection.com The Steel Behind India’s Economic Surge INDIA Tata unveils India’s biggest blast furnace. Photo courtesy of Tata Steel22 NOVEMBER 2024 SITE SELECTION Regular assessments improve programs’ performance. E very state off ers companies tax incentives, a mechanism by which states agree to forgo tax revenue in the hope that the companies’ activities will catalyze new economic activity. ese incentives collectively cost states billions of dollars in tax revenue each year. But do states know how well these tax incentives are performing? Until recently, most did not. But over the last years, states have increasingly adopted practices to analyze the benefi ts and costs of their incentive investments on a recurring basis. Now, more than two-thirds of states — plus New York City; Washington, D.C.; and Philadelphia — regularly and rigorously evaluate incentive programs, helping policymakers determine whether incentives are meeting their intended goals. As more states and cities adopt tax incentive evaluation processes, here are four things to know about the practice. 1. States used to have very little information about tax incentive performance. is may come as a surprise — especially to people with experience preparing tax documents or who participate in incentive programs — but most states did not previously have adequate mechanisms for viewing the eff ectiveness of their economic development tax incentives. It’s true that states have systems to monitor compliance with incentive agreements, but this information tells only a sliver of the story. is performance monitoring doesn’t provide insight into how much a particular incentive is changing business behavior or whether the program is meeting its goals. orough evaluations, on the other hand, look at how a program is performing as a by ALISON WAKEFIELD Pew Charitable Trusts INCENTIVES Things to Know About Tax Incentive Evaluations 4 The Oklahoma Incentive Evaluation Commission, created in 2015, last year reviewed eight incentive programs, approving Public Financial Management Inc.’s recommendation to retain all eight with some modifi cations. Photo: Getty Images24 NOVEMBER 2024 SITE SELECTION whole, consider a broad set of benefits and costs, review the efficiency of program administration and make recommendations for how a program could work better. That’s why so many states have adopted the use of evaluations in recent years. 2. Evaluations help move past the incentive stalemate. For many years, government officials, business groups, government watchdogs and others were locked in a stalemate over incentives. Critics described them as corporate welfare, while supporters predicted ruin for communities that didn’t compete with other states or localities by offering incentives. And as the debate raged on, states continued investing millions of dollars and hoping for the best. Evaluations have helped lead to more constructive conversations about incentives. Today, states are engaging in in-depth policy conversations informed by credible data; these conversations allow states to reform programs, when necessary, to get better returns on their investments; increase fiscal certainty; and better align incentives with their economic development objectives. Oklahoma provides a case study. Supporters of incentives in the Sooner State argued for years that the programs were essential to staying competitive with other states, while skeptics viewed them as unnecessary meddling in the economy. In 2015, the state created an Incentive Evaluation Commission responsible for overseeing the evaluation process. Part of the strength of Oklahoma’s current approach lies in the range of perspectives represented on the commission, which includes people generally supportive of incentives as well as people with other viewpoints. The commission includes members of the public appointed by the governor, executive branch officials who administer incentives and state officials with general budget and policymaking responsibility. Additionally, the outside professionals contracted to conduct the analysis regularly seek input from incentive stakeholders and present their findings at open meetings that allow for public input, ensuring transparency and participation. 3. Evaluations help states invest limited resources with confidence. Incentives aren’t free: They reduce revenue available for other spending priorities. The magnitude of this revenue reduction depends on several things: the direct cost of the incentive, the degree to which it changes business behavior, the cost to administer it, whether it generates population growth that requires expanded services and infrastructure, and how the state makes up for revenue losses. Although it’s possible for incentives to generate increased economic activity, it’s unlikely that the increased activity will fully offset the incentives’ cost. As a result, states must be judicious in how they award incentives. That’s where evaluations come in — they help states better direct investments to projects that are more likely to succeed and provide a better return on investment. For instance, after evaluators reported that Mississippi had provided incentives to projects that are likely to fail from the outset, in 2020 the legislature made changes to the award process for grants and loans administered by the Mississippi Development Authority, requiring certain projects to provide evidence that they could meet specific goals. Critics described [incentives] as corporate welfare, while supporters predicted ruin for communities that didn’t compete with other states or localities by offering incentives. 26 NOVEMBER 2024 SITE SELECTION 4. States can use evaluations to improve or create economic development tools. States have eliminated incentive programs based on the results of evaluations, but they’ve also used evaluations to drive improvements and create new incentives: • After an evaluation by Virginia’s Joint Legislative Audit and Review Commission found that the state’s Small Business Jobs Grant Fund was duplicative and infrequently used, the state repealed the program at the height of its COVID-19 pandemic response and freed up much-needed funds to help struggling small businesses. • Evaluators in North Dakota identified a strategic gap in the state’s efforts to assist businesses in modernizing their manufacturing processes during the 2017-2018 interim; in response, policymakers created a new incentive program to meet the need. • In 2019, Nebraska evaluators identified design deficiencies in the Nebraska Advantage Act (the state’s foremost business incentive program) that left the state vulnerable to fiscal risk. Policymakers used these findings to help craft a replacement in 2020, the ImagiNE Nebraska Act, that addressed many of the previous program’s flaws. The use of tax incentives forces states to consider difficult trade-offs about how they invest their resources, and states need data to do so wisely. As more states adopt incentive evaluation processes, the results are clear: better designed and better performing incentives for states and businesses alike. Alison Wakefield researches tax incentives for The Pew Charitable Trusts’ state fiscal policy project. This piece was originally published on The Pew Charitable Trusts’ website. Visit www.pewtrusts.org. SITE SELECTION NOVEMBER 2024 27 Microchip, Quantum Projects Are Among Germany’s Notable Wins F oreign direct investment in Germany grew .% in to €. billion ($ billion) worth of international business projects compared to €. billion ($ billion) in , according to Germany Trade & Invest’s (GTAI) annual FDI study. ere were fewer projects last year than in , but of the , logged by the agency, exceeded € million in investment and eight passed the € billion mark, or $ million and $. billion respectively. Ground broke in August on one of last year’s signature project announcements — European Semiconductor Manufacturing Company’s € billion ($. billion) microchip plant in Dresden. ESMC is a joint venture of Taiwan Semiconductor Manufacturing Company and Infi neon, NXP Semiconductors of the Netherlands and Bosch. e European Union is contributing € billion ($. billion) in state subsidies to the project. “We’re very pleased with how quickly the TSMC project has progressed, demonstrating what’s possible for businesses operating in Germany within the EU,” said Robert Hermann, CEO of Germany Trade & Invest, in a statement. “Together with other signifi cant projects planned by giants like Infi neon and Intel, this confi rms that the eastern part of Germany is Europe’s semiconductor heartland.” IBM’s Quantum Leap On October , IBM opened the IBM Quantum Data Center in Ehningen, Germany, its fi rst such facility outside the U.S. In attendance was German Chancellor Olaf Scholz, among other European government and industry offi cials. “ e opening of the IBM Quantum Data Center in Ehningen is good news for Germany,” he said at the ribbon cutting. “It will serve as a location for innovation and business growth and is an expression of investors’ confi dence in the German market. IBM enriches the German quantum computing landscape with this new data center. e German government is providing targeted support for the development of quantum technologies. It is thereby driving forward the development of competencies and capacities in quantum computing in order to promote a robust ecosystem around the development of quantum computers.” Crédit Mutuel, Bosch, E.ON, Volkswagen Group and Ikerbasque are among the European enterprises that are part of IBM’s Quantum Network with plans to access systems at the Center. by MARK AREND mark.arend@siteselection.com GERMANY German Chancellor Olaf Scholz at the opening of the IBM Quantum Center in Ehningen, Germany, in October. Photo courtesy of IBMNext >