< Previous8 MARCH 2025 SITE SELECTION Y ou only have to check in on this year’s testimony in the Texas capitol about future water infrastructure needs measured in the tens of billions of dollars to know: Water has always been a high-priority issue. It just takes us a while to rise to its level. For years, James Eklund has been doing his level best to see water treated with the respect it deserves. The leader of the Water & Natural Resources practice at law firm Taft/Sherman & Howard, he is a recognized authority on water management in the American West and was the architect of Colorado’s Water Plan. He spoke to an IAMC Roundtable in November. In January his Denver- based law firm Sherman & Howard merged with Taft, known in part for the landmark water contamination lawsuit work of Robert Bilott dramatized in the film “Dark Waters.” “If someone made a movie about me and I got a book published, my head would be way too big for this hat,” says Eklund on a Teams call from Denver, his silverbelly felt hat from Greeley Hat Works firmly atop his head, as he describes how personable Bilott is even as he deals with the crush of attention. “Everybody who has forever chemicals issues knocks on his door” wanting guidance, he says. “It’s a great pivot for him from that class action against DuPont to being really at the forefront of PFAS policy in the country. I’m excited about that.” Getting corporate leaders excited about water historically has been a taller order. On the Level: A Conversation with About Water James Eklund “They aren’t thinking about it enough,” Eklund says. It’s not just water quality but, especially in the West, water quantity. “We’ve seen a real paradigm shift,” he says. Historically, “if you were building a new industrial plant of any size in the U.S., whether in the West or East, it was taken for granted you’d go through a process, get a ‘will serve’ letter from the water provider and they’d commit to bring a certain amount of water to you [by] location, time and amount. You don’t have to think about it after that. Now we’re in a place where — especially in hotbeds of industrial growth like Phoenix, the Front Range, Austin, Reno, Southern California and Salt Lake City — markets competing for those site selectors are having to do their own due diligence on water. It’s not good enough anymore to just take the ‘will serve’ letter and say, ‘Here, this handles the water part of our operation and we don’t really need to touch water again.’ ” Like electricity (also of rising concern today), water, even a dozen years ago, didn’t necessarily rank as something to be concerned about when doing due diligence on a site or deciding what region you wanted to be in. “Now it is,” Eklund says. He has only to look out his window at accumulating snow and think of the fires in Los Angeles to recall, “Those things can flip. We had a major James Eklund and colleagues recently represented Three Lakes Watershed Association in the proposal of a resolution (later passed by the Colorado General Assembly) recognizing the importance of water clarity in Grand Lake, the the state’s largest and deepest natural lake that sits at the headwaters of the Colorado River. Photo by John Morrison: Getty Images10 MARCH 2025 SITE SELECTION “When looking at risk management in an industrial setting, you have to take a hard look at your water supply and, increasingly, the quality of that water supply.” — James Eklund wildfire here in Denver two years ago that burned a big chunk of Louisville to the north. We’ve always had drought, flooding, dry years. The difference is the severity of those things is growing more acute. “Wildfires are hotter, which means they’re sterilizing the soil and ground cover won’t come back,” he explains. “Healthy fires, which we’re told we need, we’re not getting. You get all sorts of bad things for watershed. The snow pack doesn’t behave the way you need it to when it’s sitting on top of that burn scar. Everything is connected. When looking at risk management in an industrial setting, you have to take a hard look at your water supply and, increasingly, the quality of that water supply.” Get Sophisticated Fast Eklund’s home state is an important place to be for water. It may have only 7 million people compared to 40 million in California, but as the home of the Continental Divide, Colorado is at the headwaters of not only the Colorado River, but the Arkansas, Platte and Rio Grande too. “Eighteen downstream states and Mexico get water that starts in Colorado,” he says. The Colorado River touches the lives of 40 million people and also touches 40% of the U.S. economy. One barometer of water’s growing importance is scientific conferences, says Eklund, who used to pride himself on being the only lawyer and one of few non-scientists in attendance. Now he sees more and more experts from the insurance world. “They are nervous we are not adequately pricing in risk. We’re certainly not pricing it into the cost of water.” Right now, Eklund says, it’s important for states to get sophisticated fast with their apparatus for managing water supply. “That’s what our governor said when we were developing that water plan. California, Texas and other states had water plans for decades, and the fact we didn’t have one for the most valuable asset in our natural resources portfolio was just malpractice to him. We had to get down to business with that, and we did. Arizona has a front row seat to that right now, with incredible, unprecedented growth. At the same time, the Colorado River is headed in the wrong direction in terms of supply and sustainability. It’s definitely a difficult time, but the risk that needs to be accounted for just has to include water supply and water quality.” Among the resources he suggests is the water stress map maintained by the Water Resources Institute, which now scores that stress down to the county level. “That level of detail is what you need,” Eklund says, in order to properly plan and diversify water supply. At the IAMC Roundtable, he says, “a lot of people were interested in what metric you would use to determine the risk. There are a number of tools out there that I think are going to get better, especially running those through artificial intelligence. I’m hoping we see a sea change in the forecasting models we use … Increasingly, big water providers like Denver Water are flying LIDAR flights over the snow pack and feeding that into their models. But all that said, we’re getting warmer. All tiers of our state are warmer than they were 20 years ago. So the snowpack we do get is not behaving the way it used to. It’s melting off more quickly and sublimating in some cases — it goes from solid to gas and skips the water part. It literally evaporates, disappears, and doesn’t show up in the reservoirs where we need it to be.” A dramatic process like sublimation might be just the ticket to get the rest of us to stop sublimating our feelings and develop robust solutions for turning an unacceptable reality into an acceptable future. But it will take the private sector stepping up to the plate, Eklund says, and the government doing more than mere forecasting and restriction. “If you want a food or beverage company to use less water in their product, you have to tell them what they get for doing that. It can’t be more regulation. One client manufactures a gray water system that takes bath and shower water and treats it to nearly a drinking water standard and can save 20% to 25% of the water needed for a home. But government regulators don’t really care about gray water adoption and just put out the standard. Without talking to the private sector about what it needs to see, there’s just a lot of inefficiency out there that can get cleaned up.” Eklund says it’s not accurate for the environmental community to always insist there isn’t enough water for companies such as TSMC in Phoenix to move to a location. “That’s not true,” he says. “We have not just enough water for that development, we have more than enough for that development and for agriculture. We have enough water if we manage it correctly. “If we don’t,” he says, “we don’t.” W hen China-based Lenovo and year-old Saudi Public Investment Fund conglomerate Alat broke ground for a new production facility in Riyadh in February in conjunction with the fourth annual LEAP tech event, it was part of an overall $2 billion investment by the two organizations in an advanced manufacturing and technology center integrating robotics and AI. If $2 billion sounds like a lot, consider this: A total of $14.9 billion in new AI investments were announced at the event, part of $42.4 billion in tech-related infrastructure investments made in the Kingdom since LEAP launched in 2022. Moreover, those billions are just a part of the $100 billion Alat intends to invest by 2030 to enhance Saudi Arabia’s technological capabilities. Lenovo’s 200,000-sq.-m. (2.1-million sq.-ft.) manufacturing, R&D, innovation and customer experience site at the Special Integrated Logistics Zone (SILZ) in Riyadh is anticipated to support employment of 15,000 directly and another 45,000 in supporting industries. It joins a global network of more than 30 Lenovo manufacturing sites around the world. “Through this powerful strategic collaboration and investment with Alat, we gain greater global presence, a strong regional foothold and the ability to capitalize on the incredible growth momentum by ADAM BRUNS adam.bruns@siteselection.com MIDDLE EAST 12 MARCH 2025 SITE SELECTION AI Is Only the Beginning Of Saudi Arabia’s Leap Forward Al-Olaya in northern Riyadh, Saudi Arabia Photo by Xavier Arnau: Getty Images14 MARCH 2025 SITE SELECTION in KSA and the wider MEA region,” said Lenovo Chairman and CEO Yuanqing Yang. Alat’s mission involves innovating and creating manufacturing capabilities for categories of products across nine business units: semiconductors, smart devices, smart buildings, smart appliances, smart health, electrifi cation, advanced industrials, next generation and AI infrastructure. Its eff orts aim to do nothing less than create , direct jobs and contribute $. billion in non-oil GDP in Saudi Arabia by . Partnerships Everywhere You Look Positioned minutes from King Khalid International Airport, the Lenovo/Alat investment — which includes a Middle East and Africa headquarters commitment from Lenovo — joins a fast-developing ecosystem that includes IBM’s pledge last year to invest $ million in a new software development center. IBM and Lenovo also are engaged in a new strategic technology partnership “designed to help scale the impact of generative AI” for clients in the Kingdom, the companies announced. Other AI-affi liated projects announced at LEAP included a plan by private equity fi rm KKR, in partnership with Gulf Data Hub, to invest in megawatts of data centers; Saudi Arabia’s Salesforce investing $ million to develop Hyperforce and enhance cloud capabilities for regional customers; and Tencent Cloud’s allocation of $ million to establish the Middle East’s fi rst AI-powered cloud region. But there are plenty of other partnerships afoot. At the March LEAP event, Alat signed an agreement with King Abdulaziz City for Science and Technology (KACST). “Alat will provide support through industrial facilities and manufacturing solutions, drawing on Alat’s own advanced manufacturing hub that is being established in Saudi Arabia,” the organization stated. “Alat will work closely with KACST on talent development, to foster the skilled workforce required for semiconductor operations, and will also leverage’s KACST’s advanced technology facilities for joint research and training.” In February , Alat announced four partnerships in order to “deliver sustainable manufacturing to help these global companies reduce their emissions and move towards carbon zero manufacturing.” e details: • “Alat and Softbank will establish a next- generation industrial automation business in the Kingdom of Saudi Arabia that will manufacture groundbreaking industrial robots. e partners will invest up to $ million to establish a fully automated manufacturing and engineering hub that will serve local and global demand.” • Carrier and Alat will develop a manufacturing and R&D facility in the Kingdom expected to create more than , jobs and aimed at decarbonizing emissions in buildings and dramatically increasing their energy effi ciency. Carrier said the HVAC industry in the Middle East and North Africa (MENA) region is expected to become “a $ billion addressable market by .” • Security and safety product manufacturer Dahua Technology Ltd will invest $ million to establish a secure and compliant global business for vision-centric products, called Alat AIVisio Technology Co. Ltd., and a manufacturing facility in Saudi Arabia. Both companies will cooperate and support with technology enablement, testing labs and demo centers. • e Saudi Technology and Security Comprehensive Control Company (Tahakom), which already develops intelligent transportation systems, AI and safety solutions, will in partnership with Alat combine their resources and capabilities to advance smart mobility and intelligent cities solutions. e Carrier release also noted that “while the number of factories in Saudi Arabia has increased by % in the last year, with over , industrial facilities, the Kingdom expects to host , manufacturing facilities by .” Carrier has long had a presence in Saudi Arabia and we see signifi cant growth opportunities in the region.” — Carrier Chairman & CEO David Gitlin , February 2024, on a new partnership with Alat that includes a 5,000-job R&D and manufacturing site Carrier has long had a Site Selection in an Era of Uncertainty What to do when ‘wait and see’ is not an option. U ndertaking a proper site selection analysis for manufacturing operations, corporate headquarters, R&D hubs or back-offi ce services centers has always been one of the keys to successful FDI. Whether it was a relocation or new investment, near home or one that went halfway around the world, running an analytical process that considered both “must haves” and “wants” is essential. Couple this with a sensitivity analysis to evaluate the impact of various risks results in C-suite executives making informed decisions on the optimal locations for their investments. For -plus years, essentially through , multinational (MNCs) manufacturers viewed China as the best location to establish a global export center. ese investments took advantage of the signifi cant labor arbitrage, attractive government investment incentives, the adoption of innovative technologies, and a welcoming business environment. China’s economy was healthy as the investment of the past two decades had created the world’s fastest growing economy. Even as wages rose, companies continued to make investments in China to take advantage of the rapidly developing domestic market. e average manufacturing labor costs in China had equaled Mexico’s and Brazil by , according to the National Statistics Bureau. us began a trend of companies looking for smaller manufacturing facilities, utilizing more automation and technology workers that were proximate to the end consumer. e global pandemic, rising nationalism, trade wars and, unfortunately, real wars have all made investment and site selection decisions more daunting during this past decade of uncertainty. It has also made the identifi cation of risks, an analysis of their impact and strategies for mitigation more important. ASIA 16 MARCH 2025 SITE SELECTION As Indonesia considers lifting its ban on Apple iPhone sales if Apple commits to invest up to $1 billion in the country, Indonesian authorities have announced that an Apple AirTag production facility is coming to the island of Batam. Photo of Barelang Bridge to Batam Island by ibenk.88: Getty Images by JOHN EVANS Co-founder, Tractus Asia Ltd. editor@conway.comNext >