Industrial site operations diligence
Operations were winding down at a large government hazardous waste processing facility with nearly 2,000 employees and almost 100 distinct buildings and pieces of infrastructure. The organization’s leaders needed to identify which facilities could be repurposed to support future operational needs. More than $2 billion had been invested in developing the unique facility and its capabilities, but its usefulness for other operations was not clear. Wilson Perumal & Company was brought in to assess the condition and capabilities of the facilities and to determine the feasibility of repurposing these facilities for new uses. We were also asked to evaluate the strength of the workforce, and the economic impacts potential facility reuse scenarios could have on the local economy.
There were multiple challenges that had to be addressed while performing an in-depth due diligence study of the facility and potential future use scenarios. First, several of the buildings and their enclosed industrial equipment were slated for demolition due to hazardous waste exposure. Retaining these facilities required completion of remediation actions and successful negotiation of reuse agreements between the government agency head and state’s Governor. Second, planning for demolition activities was well underway and award of demolition contracts was imminent, but the required planning horizons for potential CAPEX and funding future operations were well past the planned demolition decision dates. Lastly, the extensive hazardous waste remediation requirements meant the operational demand for the current workforce would end well before new future operations at the facility could commence.
WP&C leveraged its extensive experience with the operations, organization, and constraints of government-owned industrial facilities to develop a five-step approach to conduct the required operational diligence:
Through this six-week effort WP&C determined that 54 facilities had high feasibility for reuse feasibility, 37 had limited or low reuse feasibility, and 3 had no reuse feasibility. Additionally, we developed 14 new business opportunities that could be executed at the site to make use of the existing facilities and workforce. With these findings, WP&C made the following recommendations:
The WP&C team identified significant potential cost savings by repurposing the facilities, and we also developed multiple new business-line opportunities that could generate significant revenue at the site. These opportunities included:
There were multiple challenges that had to be addressed while performing an in-depth due diligence study of the facility and potential future use scenarios. First, several of the buildings and their enclosed industrial equipment were slated for demolition due to hazardous waste exposure. Retaining these facilities required completion of remediation actions and successful negotiation of reuse agreements between the government agency head and state’s Governor. Second, planning for demolition activities was well underway and award of demolition contracts was imminent, but the required planning horizons for potential CAPEX and funding future operations were well past the planned demolition decision dates. Lastly, the extensive hazardous waste remediation requirements meant the operational demand for the current workforce would end well before new future operations at the facility could commence.
WP&C leveraged its extensive experience with the operations, organization, and constraints of government-owned industrial facilities to develop a five-step approach to conduct the required operational diligence:
Through this six-week effort WP&C determined that 54 facilities had high feasibility for reuse feasibility, 37 had limited or low reuse feasibility, and 3 had no reuse feasibility. Additionally, we developed 14 new business opportunities that could be executed at the site to make use of the existing facilities and workforce. With these findings, WP&C made the following recommendations:
The WP&C team identified significant potential cost savings by repurposing the facilities, and we also developed multiple new business-line opportunities that could generate significant revenue at the site. These opportunities included: