Making new factories: a truly global enterprise

Posted: June 17, 2025

From the Venetian Arsenal, which built ships in a proto-industrial fashion in the 14th century, through the textile mills of the early Industrial Revolution up to the agile “Industry 4.0” facilities of the present, manufacturing plants have always required a great deal of coordination to build.

In today’s globalized world, new factories arise at the nexus of sophisticated international supply chains for raw materials and equipment; they also require the cooperation of firms specialized in engineering and design, construction, logistics, as well as technology and software, many of which are based in different regions from each other.

Whatever their merits, current and recent initiatives aimed at onshoring, reshoring, nearshoring, or “friendshoring” must all negotiate a complicated international web of suppliers and manufacturers.

What it takes to build a greenfield manufacturing plant

The process of building a new plant and bringing it online can take several years, from identifying the site and obtaining the necessary permits through design, procurement, construction, and equipment installation phases before getting to start-up and eventually ramp-up, followed by ongoing optimization processes.

The structure of project delivery may differ from industry to industry and from company to company, with construction firms responsible for managing and/or executing some or all of the design, construction, maintenance, and operation steps. Many leading construction firms are active globally, such as France’s VINCI and Germany’s Hochtief as well as U.S.-based giants Bechtel and Fluor, plus Turner Construction, itself a Hochtief subsidiary; Sweden’s Skanska has focused its activity on the UK, Europe, and the U.S. (Many of the world’s top factory builders are Chinese and state-owned.)

In order to build a greenfield manufacturing plant, these firms typically source raw material inputs like steel, copper, and aluminum from global supply chains—more on that later. They may also use modular construction, an approach that involves the prefabrication of standardized elements in factory conditions away from the site, thus adding another logistical step to the movement of materials.

In addition to basic elements like walls, panels, foundations, and roofing, the new plant requires electrical and power distribution systems—provided by firms like Schneider Electric—as well as heating, ventilation, and air conditioning (HVAC) solutions as sourced from the likes of Trane and Rheem in the US or Daikin and Mitsubishi Electric in Japan.

Depending on the industry, plants also need specialized equipment to conduct their manufacturing processes. Such process equipment is sourced from companies like GMM Pfaudler for chemicals and GEA for food and pharmaceuticals in Germany or like the American firm SPX Flow in a wide range of industries; the Swedish firm Alfa Laval, too, provides equipment like boilers, decanters, heat exchangers, and separators to factories in the energy and food industries.

Leading providers of material handling equipment—which moves, stores, and packages goods at the facility—include Daifuku in Japan, and Vanderlande in the Netherlands, while robotics and automation solutions might be sourced from the Chinese-owned German company KUKA, the Swiss firm ABB, or FANUC in Japan. And then, of course, manufacturing plants require industrial software across operations, data management, and beyond, solutions readily available from AVEVA (among others).

Direct and indirect global inputs

Both for the contractors building the plant and for the manufacturers providing factory equipment, raw materials need to be sourced via majorly globalized supply chains.

The top global producers of cement, a key requirement for construction, are two Chinese companies followed by Holcim in Switzerland; other leading firms include Heidelberg Cement in Germany and CEMEX in Mexico. In the U.S., cement is produced in states like Texas and Missouri, while net imports amounted to 22% of total consumption in 2024, with Turkey, Canada, and Vietnam the foremost suppliers. Turkey also exports cement to the E.U., as does Algeria and Ukraine; Germany, France, and Italy produce significant amounts domestically. Materials like bricks and glass also need sourcing.

Steel is a particularly important input for construction, used for the structure of the plant as well as roofing, and in much of the processing equipment required by each industry. Roughly a quarter of the steel used in the U.S. is imported—mostly from Mexico, Canada, Brazil, Japan, South Korea, and Germany. (China is the largest producer and exporter of steel in the world, but only accounted for under 2% of U.S. imports last year.) In 2023, the world’s largest crude steel producers outside China were ArcelorMittal of Luxembourg, Nippon Steel Corporation in Japan, POSCO in South Korea, and Tata Steel in India. About two thirds of the iron ore used for steel production is exported from just two nations, Australia and Brazil.

Copper, too, is required for the construction of a modern manufacturing facility. It is used in electrical wiring, plumbing and other pipework, and in some cases roofing or cladding; it is a vital component of many heating, ventilation, and air conditioning (HVAC) systems. Copper is also needed for factory equipment and machinery, including robotics. The world’s largest copper producers are currently Chile, the Democratic Republic of the Congo (DRC), Peru, China, and Indonesia, followed by the USA, Russia, and Australia. Currently, the E.U. meets almost half its copper demand through recycling and 20% through internal production, especially in Poland; the rest is imported. In the U.S., as of earlier this year, around half the copper consumed gets produced domestically—primarily in Arizona—while the rest is imported, with over 90% of refined copper imports coming from South America and Canada. China’s refineries largely use ore imported from countries like Chile and Peru.

Other key inputs for builders and equipment manufacturers include wood—the world’s top lumber companies are located in North America and Scandinavia—and aluminum, which is typically produced by producers in China, India, Russia, Canada, the UAE, and Bahrain using bauxite mined in Australia, Guinea, China, and Indonesia. There is also the need for rare earth elements, especially with equipment that uses robotics; the vast majority of these are produced in China.

Building a modern factory today, then, means working with complex international networks of contractors and equipment makers, who themselves must draw on global supply chains for a wide range of inputs.