A chemical firm is considering how best to supply the world market for sulfuric acid. A manufacturing plant costs about $20 million to construct and requires a moderately skilled workforce. The total value of the world market for this product over the new 10 years is estimated to be between $20 and $30 billion. The tariffs prevailing in this industry are moderate. What kind of location(s) should the firm seek for its plant(s)
A chemical firm is considering how best to supply the world market for sulfuric acid. A
The company ought to support distributed manufacturing. The start-up cost is a pitiful $20 million in an industry that will be worth $20 to $30 billion in ten years. Decentralized businesses benefit from moderate tariffs since each plant may be configured to service a different tariff-blocked market, giving them a competitive edge. There are also many people with medium skill levels. In this situation, a company is not required to centralize based on manpower. The company ought to locate a facility near accessible transportation hubs within each significant market. In this manner, the company may send goods to clients at a low cost and avoid paying Intermarket taxes. The transportation hubs (New Orleans, Chicago, New York, London, and Singapore) typically have a large pool of unemployed people since other businesses build factories there for the same purpose.
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