1. April 2012

2. Competitiveness of Scottish Central Belt Value for Money Overall Attractiveness Quality of the Location Annual Operating Costs Quality Competitiveness General Business Environment Contents Labour Availability and Quality Presence of an Industrial Cluster Infrastructure and Accessibility Living Environment

3.  The following analysis is based on fDi Benchmark, an online location benchmarking tool provided by the Financial Times (FT)  fDi Benchmark compared the Scottish Central Belt with the leading locations globally for an Aerospace Manufacturing Plant based on an analysis of over 55 quality factors and 10 cost factors  A key emphasis was placed on: - Presence of industrial cluster - Infrastructure and accessibility - General business environment  Other factors including labour availability and quality and the living environment were also assessed Benchmarking Study

4. Weighting Model OverviewWeight Presence of an Industrial Cluster45 Infrastructure and Accessibility20 General Business Environment15 Labour Availability and Quality15 Living Environment5 Cost FactorUsage Amount Property Total Occupancy cost (industrial rent)62,000 m² Total Occupancy cost (in town office rent)1,200 m² Utilities Electricity42,000 100kWh Industrial Gas220,000 m³ Employee TypeProfile Head count Manufacturing Head of Manufacturing1 Production Manager1 Production Operative (Highly Skilled)50 Production Operative (Skilled)130 Production Operative (Unskilled)20 Quality Control Manager1 Quality Control Specialist10 R&D / Engineering Engineer27 Administration Facilities/Office Services Specialist2 Secretary6 Accountant2 Project Profile Overview

5. The fDi Benchmark Matrix shows the trade off between cost and quality across the 7 selected locations for the Aerospace Manufacturing Plant profile. The average cost and quality score is 100 for the selected locations. Source: fDi Intelligence, from the Financial Times Ltd The ‘ideal’ quadrant is the top left (high quality/lower operating costs) fDi Benchmark Matrix

6. The matrix is based on the weighting and cost model for the Aerospace manufacturing plant profile. The weighting model identifies the key location criteria for the project and the cost model shows the primary cost inputs for the operation. The cost and quality scores are calculated using real data on all the location requirements and cost inputs. The results indicate the different location solutions for the investor as follows:  the Scottish Central Belt offers higher quality at lower cost than the average of all the selected locations  Madrid offers higher quality but at a higher price  Cardiff and Newcastle offer lower cost, but at lower quality The Operating Cost value is in GBP - United Kingdom Pound Source: fDi Intelligence, from the Financial Times Ltd Location Qualitative Score Operating Cost Index Operating Cost Value Bristol87.2101.610,737,007 Cardiff52.089.99,498,640 Dublin87.8121.112,796,220 Madrid200.7105.011,099,939 Manchester84.2100.410,613,312 Newcastle52.582.38,699,562 Scottish Central Belt135.299.710,540,193 fDi Benchmark Matrix

7. The location attractiveness index shows the overall attractiveness of the 7 selected locations for the Aerospace manufacturing plant profile. The ratio of quality to cost is 50:50 Source: fDi Intelligence, from the Financial Times Ltd Local Attractiveness Index

8. The cost quality competitiveness uses the results of the fDi Benchmark Matrix to show the value for money of each location option. The graph shows that:  The top locations offering the highest quality for a given level of cost are the Scottish Central Belt and Madrid  the Scottish Central Belt and Madrid offer an above average level of quality and good value for money as their relative quality is higher than their relative cost Source: fDi Intelligence, from the Financial Times Ltd Cost Quality Competitiveness

9. The annual operating cost calculation for Aerospace manufacturing plant is based on the following primary input costs: Labour Cost, Property & Utilities - The average cost across the selected locations for Aerospace manufacturing plant is GBP 10,569,266 - The greatest cost saving between the selected locations is GBP 4,096658 per annum - The locations with the lowest operating costs are Newcastle and Cardiff In terms of the individual cost factors, the locations with the lowest costs are: - Labour Cost: Manchester and Newcastle - Property: Madrid and Newcastle - Utilities: Newcastle and the Scottish Central Belt The values in the chart opposite are in GBP United Kingdom Pound Source: fDi Intelligence, from the Financial Times Ltd LocationLabour CostPropertyUtilities Bristol5,464,5354,907,649364,821 Cardiff5,527,5733,606,245364,821 Dublin8,008,5804,337,644449,994 Madrid7,312,6623,362,690424,585 Manchester5,185,0795,063,410364,821 Newcastle5,378,8392,955,900364,821 Scottish Central Belt5,548,4884,626,882364,821 Cost Competitiveness

10. The quality competitiveness assessment is based on the weight model for the Aerospace manufacturing plant profile which assesses each location across the following location factors: - General Business Environment - Labour Availability and Quality - Presence of an Industrial Cluster Infrastructure and Accessibility and - Living Environment The average score for the selected locations is 100. The locations with the highest quality scores are Madrid and the Scottish Central Belt In terms of the individual quality factors, the locations with the highest scores are: - General Business Environment: Manchester and Dublin - Labour Availability and Quality: Madrid and the Scottish Central Belt - Presence of an Industrial Cluster: Madrid and the Scottish Central Belt - Infrastructure and Accessibility: Madrid and Manchester - Living Environment: the Scottish Central Belt and Madrid Source: fDi Intelligence, from the Financial Times Ltd Location General Business Environment Labour Availability and Quality Presence of an Industrial Cluster Infrastructure and Accessibility Living Environment Bristol151241155 Cardiff15109145 Dublin1626 155 Madrid147689166 Manchester162226165 Newcastle15136145 Scottish Central Belt155149155 Quality Competitiveness

11. The quality competitiveness breakdown for General Business Environment for the Aerospace manufacturing plant profile is shown opposite The locations with the highest overall score for General Business Environment are Manchester and Dublin In terms of the individual quality criteria within General Business Environment, the locations with the highest scores are: - Economic growth and stability: Madrid and Manchester - Operating risk: Manchester and the Scottish Central Belt - Taxation and incentives: Dublin and the Scottish Central Belt - Regulatory environment: Dublin and the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd Location Economic growth and stability Operating risk Taxation and incentives Regulatory environment Bristol 1.155.132.945.43 Cardiff 0.995.132.945.43 Dublin 2.413.473.956.16 Madrid 5.542.362.333.43 Manchester 2.695.132.945.43 Newcastle 1.055.132.945.43 Scottish Central Belt 1.925.132.945.43 General Business Environment

12. The quality competitiveness breakdown for Labour Availability and Quality for the Aerospace manufacturing plant profile is shown below The locations with the highest overall score for Labour Availability and Quality are Madrid and the Scottish Central Belt In terms of the individual quality criteria within Labour Availability and Quality, the locations with the highest scores are: - Overall size of labour market: Madrid and Manchester - Tightness and competition for labour: Madrid and Dublin - Flexibility of labour regulations: Madrid and the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd Location Overall size of labour market Tightness and competition for labour Flexibility of labour regulations Bristol 4.862.035.18 Cardiff 3.952.563.56 Dublin 6.453.5216.15 Madrid 33.714.4037.57 Manchester 13.573.115.19 Newcastle 8.002.822.20 Scottish Central Belt 13.462.5735.16 Labour Availability and Quality

13. The quality competitiveness breakdown for Presence of an Industrial Cluster for the Aerospace manufacturing plant profile is shown below The locations with the highest overall score for Presence of an Industrial Cluster are Madrid and the Scottish Central Belt In terms of the individual quality criteria within Presence of an Industrial Cluster, the locations with the highest score are: - Size of industry: Madrid and Bristol - Track record: Madrid and the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd Location Size of industryTrack record Bristol 23.2517.39 Cardiff 1.996.52 Dublin 17.278.69 Madrid 30.5558.68 Manchester 12.6213.04 Newcastle 3.982.17 Scottish Central Belt 20.5928.25 Presence of an Industrial Cluster

14. The quality competitiveness breakdown for Infrastructure and Accessibility for the Aerospace manufacturing plant profile is shown below The locations with the highest overall score for Infrastructure and Accessibility are Madrid and Manchester In terms of the individual quality criteria within Infrastructure and Accessibility, the locations with the highest scores are: - Access to major overseas markets: Madrid and Manchester - Quality of local infrastructure: the Scottish Central Belt and Manchester - Quality of utilities: Madrid and Manchester - Quality of ICT infrastructure: Bristol and Manchester Source: fDi Intelligence, from the Financial Times Ltd Infrastructure and Accessibility Location Access to major overseas markets Quality of local infrastructure Quality of utilities Quality of ICT infrastructure Bristol 4.897.611.421.10 Cardiff 4.777.611.420.46 Dublin 5.347.311.350.70 Madrid 6.387.132.050.72 Manchester 5.717.611.420.81 Newcastle4.657.611.420.63 Scottish Central Belt 5.007.611.420.58

15. The quality competitiveness breakdown for Living Environment for the Aerospace manufacturing plant profile is shown below The location with the highest overall score for Living Environment are Madrid and the Scottish Central Belt In terms of the individual quality criteria within Living Environment, the locations with the highest scores are: - Cost of living: the Scottish Central Belt and Manchester - Attractiveness for international staff: Madrid and Dublin Source: fDi Intelligence, from the Financial Times Ltd Location Cost of living Attractiveness for international staff Bristol 2.542.31 Cardiff 2.622.06 Dublin 2.362.69 Madrid 2.083.74 Manchester 2.652.32 Newcastle 2.502.00 Scottish Central Belt 2.742.38 Living Environment

16. To realise the potential, please contact: Scottish Development International 150 Broomielaw, Atlantic Quay Glasgow G2 8LU Scotland, UK T +44 141 228 2828 F +44 141 228 2089 www.sdi.co.uk Worldwide offices in: Americas, Europe, Middle East, Africa and Asia Pacific