It is used to identify and prioritize risks based on their likelihood and potential impact. The matrix helps businesses identify which risks should be addressed first and which risks can be accepted or ignored. The company has therefore decided to set up a manufacturing plant in South Africa to manufacture MP$3$ players for the local market. The plant will have the capacity to manufacture $80,000$ units annually. While the design and construction of the proposed new manufacturing plant is not complex, this will be the first time Minco is building a factory outside the UK and only the second time it is building a factory at all, after its London factory built $15$ years ago. The proposed new factory in Midrand will be about the same size and of the same complexity as the existing London factory. Minco would like the factory to be constructed by its preferred British contractors who will provide most of the skilled technical resources such as engineers and project managers, who will relocate to South Africa for the duration of the construction period $($estimated at $15$ months$).$

The factory will be owned by a new company to be registered in South Africa, MincoSA Ltd$.$ This new entity will be $65\%$ by Minco and $35\%$ by local entrepreneurs to fulfil legal Black Economic Empowerment requirements. The new factory will be constructed on land to be leased under a $30-$year lease agreement with the local shareholders responsible for identifying suitable land and negotiating the lease.

At this stage it is anticipated that the overall project cost will be in the region of US$ $3040$ million. Considering that Minco$$s annual revenues were US$ $250$ million in $2022,$ this project will be a significant investment for the firm. Minco plans to borrow $80\%$ of this money from international and South African banks at favourable interest rates. The rest of the funding will be sourced from the company$$s shareholders through shareholder loans.

Minco will enter into partnership with local vehicle manufacturers, specifically, BMW$,$ Volkswagen, Ford, Nissan, Toyota, Mercedes and Mahindra who all have manufacturing and assembly plants in major cities across South Africa. Two of these manufacturers are willing to give a firm order for annual purchases totalling $40,000$ MP$3$ players annually over three years, delivered at their plants in the Eastern Cape. However, they make no commitments beyond that period.

Although car sales in South Africa have been slow for the last five years, there is still a strong enough market for new and second$-$hand cars if the economy stays at its current growth rate, and inflation does not rise substantially. There is a Spanish competitor who is also setting up a factory in the local market, but Minco do not know much about their product quality and price offering.

The identification and clear statement of the key potential risks associated with this project, with a discussion justifying each risk. Highlight any risks that arise from the business, social, and cultural dimensions of managing project risks on international projects.