Industrial Parks and Industrial Park Management
Increasing globalization and the demand to be a leading player in the industry are forcing the Industrial Parks and Industrial Park Management Groups to focus on their business activities. Sales of entire business areas, relocations, and outsourcing on the one hand and alliances and partnerships, on the other hand, are realized. In the chemical and pharmaceutical industries, integrated corporate groups have evolved into focused pharmaceutical, speciality chemicals, and bulk chemical manufacturers. Broadly diversified industrial companies concentrate on a few large pillars and have sold entire parts of the company.
Automotive companies focus on development and marketing; to optimize the value chain and production processes, system and module integrators’ rent facilities in the automotive plants.
As a result of these trends, the traditional, closed plant structures are dissolving.
Either the entire site is re-parked, and the factory roads with pipes and sewers are handed over to the public authorities, thus creating an industrial zone or a commercial area, or the infrastructure is so complex that there is a development from integrated factory organization via interim solutions for a location with “guest companies” to industrial parks in the form of multi-company sites.
Chemical industry as Pioneer
The Pioneer of the trend is the German chemical industry. In the mid-1990s, three major industrial parks were founded independently of each other: the Infraserv Group (with Infraserv in Frankfurt, Wiesbaden, Gendorf and Knapsack and the former sister company Pharmaserv in Marburg), which emerged from Hoechst AG; Infracor in Marl, which belongs to Evonik; and InfraLeuna in the Central German chemical triangle. Other large corporations such as Bayer and Henkel followed at the beginning of this millennium. Since then, more than 70 industrial and chemical parks have been established in Germany, employing over 200,000 people.
Industrial Parks in Europe
Less strongly represented are industrial parks in the Benelux countries (with several industrial parks by Akzo and DSM), Austria (with industrial parks by OMV and Borealis in Schwechat and Linz), and Great Britain. Industrial park concepts are emerging in Eastern Europe.
In Switzerland, the Solvay Industrial Park Zurzach was established in 1998. By abandoning chemical production and concentrating on trade and distribution, Solvay decided early to open the plant for new settlements.
Three years ago, Clariant restructured Infrapark Baselland in Muttenz in a similar way, and Siegfried in Zofingen is just beginning to market its site as Pharmapark Siegfried Zofingen.
The Industrial Park Model
The industrial park management company leases space. It handles the central infrastructure tasks of the site as well as its development and marketing. The term “infrastructure” usually refers to services in the areas of plant safety, work physicians, roads, green spaces, canals and their maintenance, data and communication networks, real estate (office, laboratory, production, logistics), energy supply and waste and sewage disposal. In a broader sense, services such as plant transportation and logistics, analytics, technical assistance with central workshops, training and further education activities and plant catering are also included.
The original idea behind the industrial park is simple: Shared services bundle the site-related services to optimize costs. Also, the industrial park operation is to offer companies at the site increased flexibility; in other words, it is to make holding and fixed costs more flexible. The more efficiently the existing infrastructure in the chemical parks can be used, and the higher the company density, the more competitive the entire site will be.
competitive pressure
Locations for industrial expansions (capacity expansions), as well as new sites, are subject to ever-increasing competitive pressure. Manufacturing companies are predominantly globally positioned and make their investment decisions against the background of market developments, infrastructure conditions, and other factors (taxes, legal certainty, employee recruitment potential, etc.). Industrial locations in Europe can only hold their own in this competitive situation if the industry-specific conditions are right.
Infrastructure costs represent up to 25% of the manufacturing costs of a product and are, therefore, an important cost factor. Also, assets and real estate represent a high proportion of tied assets. Cost optimization and the consistent use of efficiency increase potentials, as well as the flexibilization of holding and fixed costs, thus play a decisive role in the location-specific competitiveness of a company.
While most companies already have efficient production processes in place, there are often opportunities for optimization in secondary processes. Those who offer individual yet cost-effective solutions are ahead of the competition in terms of location.
Individual owner and operator models
Even though both models were created at the same time, due to a lack of “best practice”, many of the industrial sites have defined their ownership and operator models. These include different organizational and legal characteristics as well as differences in the operator philosophy (activities limited to simple process control or up to the provision of complete services), in the product range, and the overall offer philosophy.
The question of ownership is also fundamental: Most industrial park management organizations today are owned by one or more “users”, i.e., industries at the site and thus, customers of the site operator.
The strategic target perspectives of the site customers and the site operator are very different. The resulting conflicts of interest are enormous. Only the legal separation of industrial park management (as a supplier) and user (as customer and tenant) can provide clarification here. A few industrial estates have been purchased by energy distribution or supply companies. However, this endangers the site-specific independence in grid operation and/or electricity purchasing. Also, the interests (and decisions, in particular regarding investments) between energy and the other services can be unequally distributed.
The Infrareal Group, with its subsidiaries, Pharmaserv, as owner and operator of the Behringwerke industrial park and, from 1 January 2015, of the Jena Pharmapark in Jena, has been owned by six private companies since 2005 and is therefore completely independent. The ownership, operation, and development of industrial parks is the core business of the Infrareal Group. This construction, in this industrial dimension, is unique to date. The success of the Infrareal Group proves this model right.
Maintaining competitiveness
Industrial park management is undoubtedly an ideal model for complex industrial companies. If the success factors for industrial estate management are also met, this model can make a significant contribution to maintaining competitiveness and jobs in Europe.