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Investments
Asked a question 2 years ago

What is brownfield investments?

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Devashish Shrivastava Top Contributor
Undergraduate student | Content Writer

A brownfield investment is regularly attempted when an organization needs to put money and start tasks in another nation however wouldn't like to acquire high beginning up costs related to a greenfield venture. The hidden basis behind a brownfield venture is to go into another outside market.  

In brownfield investment, the organization either puts resources into existing offices and framework through a merger and procurement arrangement or leases existing offices in the remote nation. A brownfield venture can be differentiated to a greenfield interest in which the organization assembles another office starting from the earliest stage.

Brownfield investment is made by the company or a government firm who purchase or lease existing production facility to conduct new developments or production activities. This strategy is adopted by many companies as it is cost saving or cost minimizing approach as by adopting this strategy it helps to start business on the already ready structur  without building new buildings ,facilities on plots and other infrastructure . Greenfield investing covers any situation in which new facilities are added or constructed on the land previously used for other purposes. It is a type investment used in foreign direct investments.