The average annual cost of operating a plastics manufacturing plant in North America can range from a high of $20.7 million a year in the San Francisco area to a low of $10.7 million annually at a Mexican maquiladora site, according to a new study by Boyd Co. Inc.
The site-selection consulting company's annual study focuses on costs at 74 comparative production sites in the U.S., Mexico and Canada. Costs were scaled to a hypothetical 150,000-square-foot plant employing 175 non-exempt workers and shipping over-the-road to a national U.S. market.
Quantitative factors are ruling the site-selection process, rather than qualitative factors, said John Boyd, president of the consulting firm.
He said many factors determine whether a site is feasible for a company. Costs for labor, electricity, natural gas and shipping are some of the key variables.
In comparing San Francisco's cost with that of a maquiladora, Boyd found the biggest difference in the weighted average hourly earnings $17.88 vs. $3.12. When all costs are considered, San Francisco is about twice as expensive.
The 83-page study from the Princeton, N.J., firm looks at costs in major cities such as Boston, Atlanta, Chicago, Dallas, Denver, Los Angeles, Toronto and Montreal. In addition to the maquiladora areas of Mexico, the study includes North American metropolitan areas with smaller concentrations of plastics facilities.