Smart Decision in Industrial Site Selection: What’s New in the Case of a Steel Mill in Brazil?

Abstract

The site-selection problem on Steel industry deals with complex aspects of economy, society, engineering and environment. For a long time, there was only the logistics outlook, but until today, this is not completely overcame. The consequences of a wrong decision are adverse for most firms. In this regard, this paper proposes a hierarchical multi-criteria Fuzzy-based model and simulates a steel facility selection in Brazil to approach the problem beyond the logistics, including new factors imposed by the current business and social demands. Initially, we present the first two steel mill’s locational studies in Brazil and their relationship with the classical models. Then, a hypothetical steel mill of 2.5 Mtons/year is specified to enable the assessment of four locational options over twenty factors. The results showed that environment and engineering factors gained relevance, where the former may be decisive and the later mitigates the risks for construction and operation, contrarily to the traditional view. Furthermore, transportation still plays a relevant role onto decision, but solely. Lastly, short and long terms forecasts encourage to rethink the traditional view of locating steel mills close to the resources.