Global site selection comparative costs: India is the global low-cost producer

Copenhagen, Denmark tops Boyd Co.’s list with the highest annual operating costs

The Boyd Co., a boutique firm that specializes in site selection analysis, has completed a study of global construction/operations costs for life sciences facilities. The “loser” (highest total annual operating costs): Copenhagen, Denmark; the “winner” was Bangalore, India (while Japan, Singapore and Australia were included in the Greater Asia region, China was not). Twenty-five sites with an existing concentration of biotechnology industry locations were the starting point, and the analysis is based on a nominal 300,000-sq.ft manufacturing plant, employing 300 workers.

The analysis is primarily comparative, the company stresses; there are considerable geographic variables, including relocation and startup expenses, as well as sales and income for the plant’s ultimate output.

As the table shows, the Copenhagen at top end has a total annual operating cost of $58.7 million; Zurich/Basel, Switzerland is close behind. Locations in the US range from New York ($55.5 million) to Raleigh/Durham, NC ($37.3 million). Interestingly, both Boston and the Northern California Bay area are almost equal, at around $49.1 million.

Boyd’s analysis includes employee labor, electric power, amortization (which includes land and cost of construction), property and sales taxes, and corporate travel expense. While a senior biochemist might earn between $88,000 and $115,000 in the US, that person would earn as much as $141,000 in Switzerland, and $11,000 (!) in India.

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