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CHAPTER 3: SITE LOCATION

3.1. General Consideration of Plant Location
The factors to be considered are:
1.
2.
3.
4.
5.
6.
7.
8.

Raw material availability

Location (marketing area)
Availability of suitable land
Transport facilities
Availability of labors
Availability of utilities (water and electricity)
Environmental impact and effluent disposal
Local community considerations
1. Raw material availability
The raw material is important to ensure that the desired product can be produced
at the required amount based on the production rate and demand. Large amount of
iron ore and chlorine are consumed in the production of ferric chloride. The
purchased price of the raw materials, availability and reliability of supplier, purity
of raw materials and storage requirements should be considered when involving
the raw material availability. Thus, the plant being constructed supposed to be
located near the raw material supplier to reduce the transportation and storage
cost.
2. Location (marketing)
The location of the selected site location should also be nearest to the port for the
distribution and shipping activity. This is done to allow less cost of product
distribution and also take less time for the shipping and distribution. The
marketing is important in the selection of plant location since the customer or
buyer usually find it is much advantageous for them to purchase from nearby
sources. With higher demand locally, the distribution cost of product can be
minimize hence maximize the profit. From the survey of the market demand
analysis of ferric chloride, the highest demand is in Europe, China, Jepun and also
others Asia country. So, it is possible to build the plant in Malaysia by referring to
the demand of the product and also by considering the competitive in the other
country.
3. Prices and geographical structure land

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The attributes of the area at a proposed plant site should be analyzed accordingly.
The geography of area and the dirt structure must be considered, since either or
both may pronouncedly affect development costs. The value expense of the area is
the most vital, and neighborhood building expenses and living conditions. Future
changes may make it attractive or important to grow the plant offices.
4. Transport facilities
Transport facilities are important for the exportation of the product to the
customer since the huge demand of ferric chloride is in Europe, Japan, China and
others Asian country and also to obtain the raw material from the suppliers. The
most suitable transportation use is by shipping. Thus, the selected location of the
site should be located near port to allow the shipping activity become much easier
and less cost used. The transportation also depends on the requesting from the
customer. Thus, it is much easier if the plant site can be access by other types of
transportation such as railway or airport. There is a need for convenient air and
road transportation facilities between the plant and company head quarters, and
effective transportation facilities for the plant personnel are necessary.
5. Availability of labors
In order to allow the plant to operate, labors are important for the plants
construction and operation. The skilled construction workers should be hired and
need to supervised by the trained operators to do the maintenance work at the
plant when there will be need of their expertise. Local trade union customs and
restrictive practices will have to be considered when assessing the availability and
suitability of the labors for recruitment and training. Consideration should be
given to prevailing pay scales, restrictions on number of hours worked per week,
competing industries.
6. Availability of utilities
In order to allow the plant to operate under normal condition, the estimation of the
water and electrical utilities are important sources for the chemical plant. This
depends on the suppliers of the electrical and water according to the state.
i.
Electricity source
Electrical is produced at an electrical power plant. Some fuel source such
as coal, oil, natural gas or nuclear energy produces heat. The heat is used
to boil water in the plant in order to create steam, and the steam can be

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used to spin the turbine or motor in the equipment. The major supplier of
ii.

electricity in Malaysia is the Tenaga Nasional Berhad.

Water source
The industries that produce metals, wood and paper products, chemicals,
gasoline and oils, and those invaluable grabber utensils you use to get
your ring out of the garbage disposal are major users of water. In the
chemical plant, water is important in the process to provide the cooling
medium for the process and to produce steam.

7. Environmental impact and effluent disposal

The consideration and attention must be giving to the rate of difficulties and
amount of cost required for the disposal since all industrial process will produce
waste from the reaction. Appropriates authorized must be consulted during the
initial site survey to verify the standards that must be met and the disposal of the
toxic and harmful effluents will be covered by local regulations. In addition, the
environmental impact assessment should be made for each new project or major
modification or expansion to an existing process.
8. Local community considerations
The proposed plant must be satisfactory to the local society. Accordingly, no
significant risk to the local resident by ensuring that the location of the plant must
be safe by considering the upwind of residential area to avoid the releasing gas
from the plant will be directly to the residential area. By considering the local
community facilities, the location of the plant must be provided with the facilities
to the employees such as school, banks, housing, recreational and cultural
facilities. Some communities welcome new plant construction as a source of new
jobs opportunity thus can increase the economic effluence.

3.2. Potential site location

There are several indusial estates developed by government of Malaysia that is capable of
locating plants for this type of industry. Such potential locations are:
i.
ii.
iii.

Gebeng Industrial Estate, Kuantan, Pahang

Tanjung Langsat Industrial Estate, Pasir Gudang Johor
Pulau Indah Industrial Park, Selangor

The summary of the criteria for each location is tabulated below.

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SELECTION CRITERIA

Location

Type of industrial preferred

Developer

Area Available

GEBENG INDUSTRIAL

TANJUNG LANGSAT

PULAU INDAH INDUSTRIAL

ESTATE, KUANTAN

INDUSTRIAL ESTATE, JOHOR

PARK

25KM from Kuantan town

Chemical
General
petrochemical

48KM to Johor Bahru Town

Located at the western side of port

Centre

klang

Heavy industrial
Medium industry
Light industry
Chemical industry
Petrochemical

Light industries
Medium industries
Food industry
Chemical industry

Pahang State Economic

Johor State Development

Selangor State Development

Development Corportaion

Corporation

Corporation

18 plots (3 acres per plot)

385.47 acres

33 acres LOT A
38 acres LOT B

Land price(RM per ft2)

RM 14.00

RM28.00-32.00
RM34.00-45.00

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RM 70

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Raw material supplier

CCM Chemicals Sdn Bhd

Nexus Chemicals Sdn Bhd
Energy Marine Trading

PBC Alliance Sdn Bhd

Mey Chern Chemical Sdn

Bhd
Sinar Bulks supply Sdn

Bhd
Golden Days Mineral

Tradings International
Yatayei World Wide Sdn
Bhd

Power supply

Tenaga Nasional Berhad

Tenaga Nasional Berhad

(TNB)
Sultan Iskandar Power Station
YTL Power Generation Sdn.

(TNB)

Bhd.

Connaught Bridge in Klang

Kapar Power Station in Kapar
Putrajaya Power Station in

Serdang
Tenaga Nasional Berhad
(TNB)

Water supply

Jabatan Bekalan Air (JBA)

Syarikat Air Johor Holding

Syarikat Bekalan Air Selangor

(SYABAS)
Semenyih water dam
Sungai Selangor water dam

Sdn. Bhd.

Port facilities

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800m Kuantan Port

3.3 KM to Tanjung Langsat

Port
68.3 KM to Tanjung Pelepas

14.1 KM to Port klang

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Airport

Port
13.6 KM to Johor Port

57.6 KM to Senai Airport

48.6KM to Subang airport

73.2 KM to KLIA

East-West Highway

Johor Bahru - Pasir Gudang

(Federal Road Kuala

Highway

Main road frontage

The bridge provides

36.7 KM to Sultan Ahmad Shah

Airport, Kuantan

Roadway facilities

Terengganu-Kerteh-Telok

access from Kuala

Kalong-Kuantan- Kuala

Lumpur, Shah Alam and

Lumpur)

Klang and Selat Lumut

SKVE Bridge of the
SKVE expressway

manpower

Institut Latihan Perindustrian

Institut Latihan MARA
Institut Kemajuan Ikhtisas

Pahang
Universiti Teknologi MARA
Universiti Malaysia Pahang

Institut Latihan Perindustrian

Pasir Gudang
Universiti Teknologi Malaysia

(UTM)
Politeknik Pasir Gudang
University Tun Hussein Onn

Universiti Industri Selangor

(UNISEL)
INPENS International

College, Pulau Indah

Workers Institute of

Technology, Pandamaran
Universiti of Malaya (UM)
Universiti Kebangsaan

Malaysia (UKM)
Universiti Putra Malaysia
(UPM)

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Table 1: Summary of the criteria of the potential site location

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3.2. SCORING BY WEIGHTAGE

Based on the book entitled Analysis, Synthesis and Design of Chemical Processes Fourth
Editionby Richard Turton, there is a method introduced by him to do the selection
between the criteria named as scoring method. Each criterion is assigned by relative
weight which reflects the judgment to its relative important. Before the scoring by
weightage is done, each criteria need to be assigned by the reference alternative with
value from 1 to 5. The reference alternative is tabulated in table 2.The scoring method for
the site selection is tabulated in table 3.
LAGEND
1 VERY POOR
2 POOR
3 MODERATE
4 GOOD
5 VERY GOOD
SELECTION

GEBENG INDUSTRIAL

TANJUNG LANGSAT

PULAU INDAH

CRITERIA

ESTATE, KUANTAN

INDUSTRIAL

INDUSTRIAL

ESTATE, JOHOR

PARK

Location

Type of

Developer

Area Available

Land price(RM

industrial
preferred

per ft2)
Raw material
supplier

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Power supply

Water supply

Port facilities

Airport

Railway facilities

Roadway

facilities
manpower
Total points

SELECTION
CRITERIA

Location
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46
52
Table 2: Reference alternative for site selection criteria

WEIGHT
(%)

11

49

GEBENG

TANJUNG

PULAU

INDUSTRIAL

LANGSAT

INDAH

ESTATE,

INDUSTRIAL

INDUSTRIAL

KUANTAN

ESTATE, JOHOR

PARK

5(0.11) = 0.55

4(0.11) = 0.44

4(0.11) = 0.44

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Type of

3(0.06) = 0.18

4(0.06) = 0.24

4(0.06) = 0.24

Developer

5(0.03) = 0.15

5(0.03) = 0.15

5(0.03) = 0.15

Area Available

10

5(0.1) = 0.5

4(0.1) = 0.4

5(0.1) = 0.5

Land

5(0.08) = 0.4

4(0.08) = 0.32

1(0.08) = 0.08

15

1(0.15) =0.15

4(0.15) = 0.6

5(0.15) = 0.75

Power supply

3(0.08) =0.24

5(0.08) = 0.4

5(0.08) = 0.4

Water supply

3(0.08) =0..24

3(0.08) = 0.24

4(0.08) = 0.32

Port facilities

10

3(0.10) = 0.30

5(0.10) = 0.50

3(0.10) = 0.30

Airport

3(0.05) = 0.15

4(0.05) = 0.20

4(0.05) = 0.2

Roadway

5(0.07) =0.35

5(0.07) =0.35

5(0.07) = 0.35

5(0.09) = 0.45

5(0.09) = 0.45

5(0.09) = 0.45

industrial
preferred

price(RM per
ft2)
Raw material
supplier

facilities
manpower
Total points

100

3.66
4.29
Table 3:weightage scoring method

4.08

From the weightage score, Tanjung Langsat Industrial Park has the highest value of
4.29. Thus, this location is selected to set up the proposed plant because of its advantages in
many factors that need to be considered for the site location. Tanjung Langsat Industrial Park,
located in Johor has 38,547 acres that are still available for industrial development. This
location is more nearest to the supplier of the raw material and has good facilities in this area.

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3.4. Description of Site Selected

3.4.1. Description of the location
Johor is a Malaysia State, located in the southern portion of Peninsular Malaysia. The
state capital city of Johor is Johor Bahru and the royal city of the state is Muar and old
state Capital is Johor Lama. Johor is the second most amounts of population with the total
amount of 3,230,440 in 2010 and increase to 3,601,690 in 2016 with the largest
population in Johor Bahru. Johors infrastructure development has been increase
gradually by year. The new project being invested in the Johor is Iskandar Malaysia, also
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known as Iskandar Development Region and South Johor Economic Region which will
encompass Johor Bahru, Johor Bahru Tengah, Kulai, Pasir Gudang, Iskandar Puteri and
Pontian. It is intended to draw investment and business to Johor and will be among the
biggest development project in Malaysia that can generate more income to the country.

Figure1: Region covers for Iskandar Malaysia project

Tanjung Langsat is located at the Pasir Gudang, Johor is now established as the
industrial area which near to the Johor port and was undergo development in the
industrial area gradually. The need of the growing petrochemical and chemical plants in
Malaysia, the Tanjung Langsat site has been developed to enhance the manufacturing
capacity. When focusing on Johor state, there is a lot of industrial estates that can be
choose to construct a new plant but the suitability of the area need to be considered. The
industrial estates present in Johor are tabulated in the table below.

District
Segamat
Mersing
Kluang
Johor Bahru

Name of industrial
estate
Segamat II
Mersing I
Mersing II
Kluang II
Simpang Renggam I
Simpang Renggam II
Pasir Gudang
Pasir Gudang (Zone
12B)
Pasir Gudang 12C
Johor Technology

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Type of industry

Distance From

Light/ medium
Light / medium

Johor Bahru (KM)

172
133

Light/ medium

70

Light/heavy/mediu

36

m
Light /medium
Light / medium

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Park
Tanjung Langsat
(Outside Port area)
Tanjung Langsat

Hi tech/ R&D /

48

General
Light/heavy/mediu
m

(within Port Area)

Port related facilities
Source: TPM techo park
Table 4: Industrial Estate in Johor

Tanjung Langsat
Industrial Park, Johor

Source: Google maps

Figure 2: The location of Tanjung Langsat Industrial Park
3.4.2.

Raw material availability

There are three (3) main raw materials that are required in our process to produce ferric
chloride, which are hydrochloric acid, magnetite iron ore, Fe3O4 and chlorine gas. The
suppliers and manufacturers for the three (3) raw materials are available in Peninsular
Malaysia. CCM Chemicals Sdn Bhd is the main manufacturer and marketer of industrial
chemicals in Malaysia. It is also one of the 50 world-renowned companies in the
chemicals manufacturing. One of the chemicals produces in CCM Chemicals Sdn Bhd is
hydrochloric acid. One of the branches of CCM Chemicals Sdn Bhd is located in Pasir
Gudang, Johor nearby the Tanjung Langsat Industrial Estate. Apart from CCM Chemicals
Sdn Bhd, Nexus Chemicals Sdn Bhd and Energy Marine Trading also among of the
hydrochloric acid manufacturer and trader that are located in Johor.

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(source : https://www.google.com)
Figure 3: CCM Chemicals Sdn Bhd Pasir Gudang, Johor

Capacity
Types of
Products

40,000 ECU (chlor-alkali plant)

25,200 MT (Coagulant Plant)
Chlor alkali plant

Liquid Chlorine
Caustic Soda
Hydrochloric Acid
Sodium Hypochlorite

Coagulant plant

Workforce

Polyaluminium Chloride
129 people
Source: CCM Chemicals Sdn Bhd Production

Table 3: Chemical produced in CCM

For magnetite iron ore, it can be obtained from other companies outside Johor such as
Golden Days Mineral Tradings International and Yatayei World Wide Sdn Bhd that are
situated in Ampang, Selangor. Vandtech Systems Sdn Bhd supplies chlorine gas, fluoride
and sodium hypochlorite. This is because Vandtech specializes in water treatment systems
in Malaysia and has been involved in sewage and water treatment for over 20 years. Since

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the sources of raw materials are available locally and nearby the selected site, the
transportation and storage cost can be reduced.

3.4.3. The properties of the land available

In order to construct a new plant, the availability of land is important to ensure there is a
sufficient space to build the plant. The land characterization such as their geographic
factor, climate and type of industrial preferred need to be examined carefully before
choosing the available land. At the Tanjung Langsat industrial park, Johor, the total
planned area for industrial activity excluding the housing is 1499.48 hectares and is being
sold to the customer is 1007.70. Thus, it shows that the area for the industrial activity can
be done is huge and the selling of the land is quick fast due to the fast development of
economics in the Tanjung Langsat Industrial Park.

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Source: TPM Tech Park

Figure 4: Available land in Tanjung Langsat Industrial Park
The price land is important since it can affect the capital cost for the construction of the
plant. Table below shows the comparison of the land price of these three industrial parks.

Land price

GEBENG

TANJUNG

PULAU INDAH

INDUSTRIAL

LANGSAT

INDUSTRIAL

ESTATE,

INDUSTRIAL

PARK

KUANTAN

ESTATE, JOHOR

RM 14.00

RM28.00-32.00

(RM per ft2)

Available area

RM 70

RM34.00-45.00
1,528.5

385.47

33 acres LOT A
38 acres LOT B

Table 4: Land price

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From table, the land price for the Tanjung Langsat Industrial Estate is not too
expensive when comparing to Pulau Indah. Meanwhile, the cost for the land is more
expensive compared to Gebeng Industrial Estate. Although the price is more expensive
than Gebeng industrial estate, but the other aspects should be considered such that there is
a lot of port comparing to the Gebeng in the Tanjung Langsat such as Johor port and
Tanjung Pelepas port. This shows that the transportation of the raw material from the
supplier to the plant and the transportation o the product to the customer is much easier.
The rate of sale for the land is much fast compared to Gebeng due to the aggressive
development of the industrial area in Pasir Gudang that give high attraction to the
investors.

Figure 5: Available Land in Tanjung Langsat

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3.4.4. Facilities
3.4.4.1. Transport Facilities
Our final product, ferric chloride is in liquid bulk chemicals and will be
distributed and transported by tankers. So the most suitable mean of transportation is by
shipping. Since there are three (3) port facilities around Tanjung Langsat, it will be much
easier for us to transport our products to our neighboring customers such as Phillipines,
China and Japan. With higher demand around Asian countries, the distribution cost of
product can be minimize hence maximize the profit. The nearest port is Tanjung Langsat
Port, located 3.3 km from Tanjung Langsat Industrial Estate. Based from the figures
below, the most types of vessels distributed is in tankers with percentage more than 50%.

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13
24
11

50

(Source: marine trafic)

Figure 6: All vessels by types in Tanjung Langsat Port
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Besides, other nearest port is Johor Port that is 13.6 km from Tanjung Langsat
Industrial Estate. Johor Port equipped with many services related to our production such
as shipper services, liquid bulk services and container services.
Johor Port services
Liquid bulk services

Shipper services

Shipping Agencies

Specialized facilities to

Chartering and Ship

cater for liquid cargoes

Management

such as edible oil,

petroleum &

Bunkering / material

Container services

million TEUs

m CFS facilities

Full Liner Services

Tankers

Container / Conventional

Dedicated rail depot

linking to national rail grid
and neighbouring

Separate facilities for

countries.

Edible Cargo and NonEdible Cargo with 4 jetties

Marine Support and

Tug / Barge, LCTs,

faster & safer operation.

Supplies

Equipped with marine

loading arm facilities for

Cargo Handling

Around 250,000 m
container yard & 11,000

petrochemicals.

supplies

Annual capacity of 1.2

Supported by on-line

accommodating up to 9

Container Terminal

vessels at any one time.

Management System

Terminal tank farm with a

capacity of almost 1

Coastal shipping services

i.
ii.
iii.

8 quay cranes
21 rubber tyred gantry
4 stackers (40 tonnes

iv.

capacity)
52 prime movers

million MT.

Stringent safety
procedures & remote firefighting devices provide a
safe operating
environment
Source: Johor Port

Table 5: Services in Johor Port

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Source: Johor Port

Figure 7: Container Terminal Management System at Johor Port

Located strategically in the centre of the 8000-acre Pasir Gudang Industrial Estate, Johor
port is linked to important commercial and industrial centers in Malaysia as well as other
ports and neigbouring countries and also connected to good road infrastructure.

Source: Johor Port

Figure 8: Location of Johor Port

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Source: Johor Port

Figure 9: Country involve in using services in Johor Port
Furthermore, Tanjung Langsat is located 68.3 km from Tanjung Pelepas Port,
Malaysias most advanced container terminal. The advantages of Tanjung Pelepas Port are
that the distance from the worlds busiest shipping lanes (Intersection of East - West
International trade lanes) only that around 45 minutes and near the Malaysia-Singapore
Second Crossing, where major industrial estates is accessible by local cargo through the
second Malaysia-Singapore expressway and the north-south highway. The figure below
shows all shipping vessels arrival at Tanjung Pelepas Port for a month, which sees that the
transportation using cargo and tankers are the highest with 68.40% and 22.94%
respectively.

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(0.4
3%)
5.63

(0.8
7%) (1.7
3%)

22.9
4%

68.4
0%

Source: Marine Trafic

Figure 10: All vessels by types in Tanjung Pelepas Port

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Other than port facilities, Tanjung Langsat Industrial Estate is also accessible by
air transportation and has distance of 57.6 km from Senai International Airport. The Senai
International Airport has international and domestic flights offer by different airlines
including Malaysia Airlines, AirAsia, Firefly and Malindo Air. Air transportation is very
important especially for our foreign customers to come and visit our plant. Eventhough
the distance are quite far, but with good roadway facilities, the employees, employers and
customers will be able to reach airport or Tanjung Langsat in time. Main road frontage is
build across Johor that connects Tanjung Langsat with the main town in Johor, that is
Johor Bahru Pasir Gudang Highway. Construction of three (3) elevated U-turn bridges
and 4 elevated pedestrian bridges for the road upgrading of the Johor Bahru-Pasir Gudang
Highway helps reduce the traffic. Hence, apart from transport our products, it is also
much easier for people to travel to other places.
Airlines

Destinations
Kuala Lumpur

Domestics - Kuala Lumpur,

Penang, Kuching, Sibu, Miri,
Kota Kinabalu
International - Ho Chi Minh,
Surabaya, Bangkok, Hatyai,
Bandung, Guangzhou

Kuala Lumpur, Ipoh, Subang

Subang, Ipoh, Kota Bharu

Source: Senai Airport destination

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Figure 11: Senai International Airport Flight Details

Source: https://www.google.com
Figure 12: Senai International Airport

Figure 13: Johor Bahru-Pasir Gudang Highway

3.4.4.2. Utilities
i.
Water supply
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Syarikat Air Johor Holding Sdn. Bhd. (SAJ) is an integrated water supply
company that responsible to supply water to the Pasir Gudang region including
Tanjung Langsat Industrial Park. This company also involved in the process of
water treatment and distribution of the treated water to the consumer right up to
billing and collection. The source of clean water for the Johor state including
Tanjung Langsat is Sungai Sembrong.

Currently, the water tariff for the

industrial in Johor is RM 2.80/m3. This current rate is effective from 1stAugust

2015. The detail of water tariff in Johor is tabulated in the table below.

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Source: Syarikat Air Johor Holding Sdn. Bhd. (SAJ)

ii.

Electric power supply

Johor has been given great attention by the investor from locally investor and
global investor due to the development that increase rapidly. Thus, this state
required more energy consumption for the increasing of housing and also
industrial area with increasing the population. List of power station in Johor is
listed below.
i.
Pasir Gudang Power Station (YTL)
Supply: 404MW
ii.
Sultan Iskandar Power station (TNB)
Supply: 729MW
iii.
Tanjung Bin power station (Tanjung Bin Power Sdn. Bhd)
Supply: 2100MW
iv.
Senoko Power Station (Singapore)
(Wikipedia power station in Malaysia)
The tariff for industrial use is tabulated in the table below.

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Source: Tenaga Nasional Berhad (TNB) Malaysia

Table

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3.4.5. Labor
The availability of labors is very high in Tanjung Langsat Industrial Estate. There are
many local high institutions and universities near the Tanjung Langsat Industrial
Estate. For example, University Teknologi Malaysia (UTM), University Tun Hussein
Onn and Politeknik Pasir Gudang. Our proposed plant offers many job opportunities
to fresh graduates from these local universities. Besides, Johor is one of the major
industrial plants in Malaysia. Thus, this attracts many people from inside and outside
of the state to come and look for any job vacancies. Apart from that, the convenient
transportation and residential facilities in Johor provides good accommodation for
people that want to find job and settle down in Johor.

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