Manufacturing in the Netherlands
The Netherlands enjoys a strong position as a European manufacturing location for North American companies. In fact, some 400 North American companies have found a home in the Netherlands for manufacturing or assembly operations.
These companies cover a wide range of product categories -- from consumer goods producers such as Coca-Cola and Starbucks; to heavy industrial concerns like Eastman Chemical, Allied Mineral and Lyondell; to technology-focused companies such as Abbott and Centocor pharmaceuticals.
Their presence in the Netherlands is due to a number of key factors, including:
Highly Productive Workforce
"We have a great relationship with the labor force. We've found very proud, motivated workers here."
Rinse Kooistra, Director of Operations, Coca-Cola Enterprises, Dongen
The Netherlands' workforce is a key strength of its manufacturing capabilities. Skilled, hardworking and extremely cooperative, it is the envy of Europe for efficiency and dedication, and sets the pace for European productivity.
Very little time is lost to labor disputes or labor relations as compared with Europe as a whole. Companies will also benefit from the small number of days lost to strikes and sick time. Importantly, the Dutch worker is also recognized for his or her flexibility and adaptability when faced with new challenges.
Another key labor advantage is flexible contracts which permit you to manage workload changes more easily and efficiently. Minimum/maximum contracts let you and your labor force agree upon weekly hours worked. Temporary workers may be hired for up to one year or longer. You also have the option of participating in labor pools with other companies, sharing the same skilled employees, as demand requires.
While few places in Europe compare to the Netherlands for sheer volume of highly skilled, well-educated workers, salaries are competitive, too.
As indicated by the chart below, the Netherlands is extremely competitive compared to many other EU countries when it comes to overall labor costs.
In addition to straight salary and benefits, the Netherlands is comparatively well positioned when it comes to other factors that impact an employer's costs.
For example, in terms of productivity, the Netherlands scores quite well.
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GDP PER HOUR WORKED (USA = 100)
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Year/Countries
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Germany
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Hungary
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Netherlands
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United Kingdom
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Switzerland
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2006
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92
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45
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101
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84
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82
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Source: OECD Productivity Database, January 2006
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Another measure of total cost for labor involves difficulty in hiring a new worker and the costs to fire a worker.
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HIGHER VALUES INDICATE MORE-RIGID REGULATIONS/HIGHER COSTS
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Germany
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Netherlands
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Czech Republic
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France
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Difficulty of Hiring Index
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33
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17
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33
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67
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Firing Costs (weeks)
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69.3
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17.3
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21.7
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31.8
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Source: World Bank (2007)
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Proximity to Markets
"Its [the Netherlands'] central location is in close proximity to our large customer base in the UK, Germany, and Europe as a whole."
Steve Lichter, Vice President, Manufacturing, Global Pharmaceutical Operations, Abbott
The Netherlands' strategic central location gives you a significant edge in serving the world's largest consumer and industrial market, and doing it cost efficiently.
The Netherlands is located in the center of the three largest economies in Europe: Germany, the UK and France, and is within a 400-mile radius of half of Europe's major markets.
95% of Europe's major markets can be reached within 24 hours from Amsterdam or Rotterdam.
And it's this central location, combined with its superior logistics infrastructure, that allows the Netherlands to offer the lowest total transport costs compared to its major competitors.
Europe's Leading Distribution and Logistics Infrastructure
There's no better way to distribute your manufactured goods throughout Europe than from the Netherlands. Its strategic location, highly developed transportation and IT infrastructure, efficient customs authorities, and logistics professionals will help expedite your company's success.
Time and again, independent studies comparing European locations for logistics have come to this same conclusion. For example:
- A 2006 study by Capgemini, a global consulting company, and ProLogis, a global distribution facilities management company, ranked the Netherlands as Europe's "most desirable" location for European Distribution Centers (EDCs).
- A 2007 study conducted by Buck Consultants International, a renowned European site location firm, benchmarked 22 competitive distribution locations in terms of both cost and qualitative factors. The Netherlands scored "best" on both criteria.
- Yet another study, this one conducted by the World Bank, ranked the Netherlands #1 in all of Europe in terms of its total Logistics Performance Index, which measures the quality of infrastructure, logistics services, security of property, transparency of government procedures and macroeconomic conditions.
For a detailed look at the Netherlands' logistics and distribution advantages click here.
Advanced Network of Suppliers
The Netherlands has a well-established and sophisticated network of service providers -- lawyers, accountants, local construction companies, IT and telecommunications providers -- that can provide the needed support for manufacturing operations.
Also, the presence of a dense manufacturing base, including some of the world's leading multinationals -- Phillips, Royal Dutch Shell Group, DSM and Akzo Nobel -- has generated a robust industrial and commercial supplier network which is available to North American firms locating manufacturing operations in the Netherlands.
Pro-Business Attitude
"When a business is trying to make a decision, you're looking at things from a business perspective. A lot of governments don't understand that language. Across the board, I felt the Dutch government was very easy to work with."
Robert Keane, President and CEO, VistaPrint Limited
The Netherlands has long been acknowledged for its conducive business environment. For example, IMD's 2007 World Competitiveness Yearbook ranked the Netherlands well ahead of its key competitors in terms of "Business Efficiency."
Also, in 2007, A.T. Kearney/Foreign Policy magazine ranked the Netherlands third worldwide in its "Globalization Index." And the World Bank Group praised the Netherlands' business-friendly regulatory environment in its 2004 Doing Business report.
And, since 2003, Dutch government reforms have either eliminated or strongly committed to eliminate 4 billion euros of administrative burdens on business, making the Netherlands the first country to achieve a 25% reduction in administrative costs. To quote the World Bank Group in 2007: "Dutch regulatory reform is among the world's best. It is well-known internationally as the most innovative initiative in cutting red tape."
All this recognition is well earned. The Netherlands has one of the EU's most politically stable and pro-business governments. Its economy is internationally oriented. Its financial sector is sophisticated. Its regulatory climate is simple and straightforward. |
