EH2207N

DESIGN PROJECT I (SEPTEMBER 2015)

PRODUCTION OF 50, 000 METRIC TONNES OF

TETRAHYDROFURAN PER YEAR

CHAPTER 3: SITE LOCATION AND SELECTION

GROUP MEMBERS
MUHAMMAD FAWWAZ AFIQ BIN MOHD ZAINUDDIN 2013600508

MOHAMAD ALIF BIN MOHD RADZUAN 2013411196

MUHAMMAD KHAIRI BIN TAJURUS 2013233736

MUHAMMAD IDHAM BIN REZALI 2013811872

MOHAMAD HAZRUL BIN TAIB 2013674906

SITI SARAH BINTI AZMI 2013464376

SUPERVISOR:

PUAN NURHASLINA CHE RADZI

FACULTY OF CHEMICAL ENGINEERING

UNIVERSITI TEKNOLOGI MARA

SHAH ALAM
 TABLE OF CONTENT

CHAPTER THREE SITE LOCATION AND SELECTION 3

3.1 INTRODUCTION 3
3.2 THF PLANT PROCESS DESCRIPTION AND FLOW DIAGRAM 3
3.2.1 Chemistry 3
3.2.2 THF Plant Process Flow Diagram 5
3.2.3 THF Plant Process Description 6
3.3 CRITERIA FOR SITE SELECTION 8
3.3.1 Availability of Raw Materials 8
3.3.2 Market Demand 8
3.3.3 Transportation Facilities 8
3.3.4 Utilities Availabilities 9
3.3.5 Land Availability and Cost 9
3.3.6 Manpower Availability and Labour Cost 10
3.3.7 Climate Change 10
3.4 POTENTIAL SITE LOCATION 11
3.5 SELECTION OF SITE LOCATION 12
3.5.1 India 12
3.5.1.1 Site Location 13
3.5.1.2 Availability of Raw Materials 13
3.5.1.3 Market Demand 14
3.5.1.4 Transportation Facilities 14
3.5.1.4.1 Sea Port Facilities 14
3.5.1.4.2 Airport Facilities 15
3.5.1.4.3 Land Facilities 15
3.5.1.5 Utilities Availabilities 16
3.5.1.5.1 Electrical Power Supply 16
3.5.1.5.2 Water Supply 17
3.5.1.6 Land Availability and Cost 17
3.5.1.7 Manpower Availability and Labour Cost 18
3.5.1.8 Climate Change 19
3.5.2 China 20
3.5.2.1 Site Location 21
3.5.2.2 Availability of Raw Material 22
3.5.2.3 Market Demand 22

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 3.5.2.4 Transportation Facilities 23
3.5.2.4.1 Sea Port Facilities 23
3.5.2.4.2 Road Facilities 23
3.5.2.4.3 Airport Facilities 24
3.5.2.5 Utilities Availabilities 24
3.5.2.5.1 Electrical Power Supply 24
3.5.2.5.2 Water Supply 25
3.5.2.6 Land Availability and Cost 25
3.5.2.7 Manpower Availability and Labour Cost 26
3.5.2.8 Climate Change 27
3.5.3 South Korea 28
3.5.3.1 Site Location 29
3.5.3.2 Availability of Raw Material 31
3.5.3.3 Market Demand 31
3.5.3.4 Transportation Facilities 32
3.5.3.4.1 Land Transport 32
3.5.3.4.2 Sea Port Facilities 32
3.5.3.4.3 Airport Facilities 34
3.5.3.5 Utilities Availabilities 35
3.5.3.5.1 Electricity Tariff 35
3.5.3.5.2 Water Tariff 35
3.5.3.6 Land Availability and Cost 35
3.5.3.7 Manpower Availability and Labour Cost 36
3.5.3.8 Climate Change 36
3.6 CONCLUSION 41

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 CHAPTER THREE

SITE LOCATION AND SELECTION

3.1 INTRODUCTION

Site selection is one important factor to be considered in the construction of a new

chemical plant. There are several major principles that need to be satisfied before build a
new chemical plant which are physical, human, environmental and economic. There are
several key principles that need to be met before building a new chemical plant such as
physical, human, environmental and economic. It is necessary to comply with the
principles for a chemical plant suitable economically and sustainably. The geographical
location of the plant can have a strong influence on the success of the industry. Great care
must be exercised in selecting plant site, and various factors need to be considered.
Especially plant must be located where the minimum cost of production and distribution
can be obtained, but, other factors, including the development and safe living conditions
for the operation of the plant as well as surrounding communities are also important.
Location of the plant can also provide significant impact on the profitability of the project.

3.2 THF PLANT PROCESS DESCRIPTION AND FLOW DIAGRAM

3.2.1 Chemistry

Tetrahydrofuran (THF) is produced by the hydrogenation of Maleic Acid (MA) in the

presence of an acid catalyst. In this THF plant, MA is synthesized first by reacting Maleic
Anhydride (MAH) and water. 100% of the Maleic Anhydride reacts steadily with water to
produce MA. The reaction is as follow:

𝐶4 𝐻2 𝑂3 (𝑙) + 𝐻2 𝑂𝑙 → 𝐶4 𝐻4 𝑂4 (𝑙)

𝑀𝑎𝑙𝑒𝑖𝑐 𝐴𝑛ℎ𝑦𝑑𝑟𝑖𝑑𝑒 + 𝑊𝑎𝑡𝑒𝑟 → 𝑀𝑎𝑙𝑒𝑖𝑐 𝐴𝑐𝑖𝑑

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The basic THF reactor raw materials are Maleic Acid and Hydrogen. Pd/Re is used as the
catalyst. MA conversion is 100%, where approximately 92.7% of the MA fed to the reactor
are converted to THF and the rest to gamma butyrolactone (GBL). There are 3 reactions
occur in series in the THF reactor. The reactions are,

𝐶4 𝐻4 𝑂4 (𝑔) + 𝐻2 (𝑔) → 𝐶4 𝐻6 𝑂4 (𝑔)

𝑀𝑎𝑙𝑒𝑖𝑐 𝐴𝑐𝑖𝑑 + 𝐻𝑦𝑑𝑟𝑜𝑔𝑒𝑛 → 𝑆𝑢𝑐𝑐𝑖𝑛𝑖𝑐 𝐴𝑐𝑖𝑑

𝐶4 𝐻6 𝑂4 (𝑔) + 2𝐻2 (𝑔) → 𝐶4 𝐻6 𝑂2 (𝑔) + 2𝐻2 𝑂(𝑔)

𝑆𝑢𝑐𝑐𝑖𝑛𝑖𝑐 𝐴𝑐𝑖𝑑 + 2𝐻𝑦𝑑𝑟𝑜𝑔𝑒𝑛 → 𝐺𝐵𝐿 + 2𝑊𝑎𝑡𝑒𝑟

𝐶4 𝐻6 𝑂2 (𝑔) + 2𝐻2 (𝑔) → 𝐶4 𝐻8 𝑂(𝑔) + 𝐻2 𝑂(𝑔)

𝐺𝐵𝐿 + 2𝐻𝑦𝑑𝑟𝑜𝑔𝑒𝑛 → 𝑇𝑒𝑡𝑟𝑎ℎ𝑦𝑑𝑟𝑜𝑓𝑢𝑟𝑎𝑛 + 𝑊𝑎𝑡𝑒𝑟

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3.2.2 THF Plant Process Flow Diagram

Figure 3-1: THF Plant Process Flow Diagram

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3.2.3 THF Plant Process Description

Process flow diagram for the THF process is shown in

Figure 3-1. Raw material for this process is Maleic Anhydride (MAH) and hydrogen.
Firstly, fresh MAH feed enters stream 1 and is fed to R-100, where the MAH reacts with
water from stream 2 to give Maleic Acid (MA). MAH is fed to the THF plant from MAH
storage tank located in the process tank yard. R-100 is basically a vessel where MAH and
water is mixed and steadily reacts to form MA. MA stream is vaporized by E-100, prior to
being sent to packed bed reactor, R-101, THF reactor.

Hydrogen, in stream 6, from Hydrogen storage tank is fed to THF plant in excess
at 200 bar. The hydrogen stream is fed to a valve, to decrease the pressure to 1020 kPa.
The stream is then fed to E-101 to be heated to 235°C before entering THF reactor, R-
101.

The MA and hydrogen stream are fed to THF reactor, R-101. Inside the reactor,
the MA-Hydrogen mixture is reacted in the presence of Pd/Re catalyst. Typical inlet
reaction temperatures are in the range of 235°C - 275°C. As the reaction temperature does
not exceeded 400°C, the material of construction of the reactor is carbon steel. The reactor
operated at 1 MPa. About 92.7% of the MA fed is converted to THF in the reactor (Ruichao
Zhang et al., 2007). The by-product form in this reaction is GBL and water.

Reactor effluent, containing THF, GBL, MA, Hydrogen and water are sent to E-
102 for cooling from 235°C to 40°C. The cooled stream is then fed to V-100 to separate
unreacted hydrogen from the product mixture. The overhead V-100 contains all the
unreacted Hydrogen with a little THF and water carries over. The bottom V-100 contains
the product stream free from Hydrogen.

The bottom stream is then sent to Reactor Column, T-100 where the function is
to separate the THF product from unreacted MA and GBL. The overhead of the Reactor
Column contains about 35.55% THF, 63.47% Water and 0.99% MA. The residue of the
Reactor Column, containing unreacted MA and GBL, are fed back to R-101.

The overhead of Reactor Column containing 33.55% THF, will be purify to

polymerization grade monomer by pressure swing distillation using T-101 and T-102.
Pressure swing distillation is used to break THF/Water azeotrope.

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 Firstly, the overhead of Reactor Column will enter T-101, Distillation Column. The
column is operated nearly at atmospheric pressure. The overhead of the Distillation
Column contains THF/Water azeotrope at 93.3% THF and 6.7% Water. The residue of the
column, containing water and traces of MA are fed to wastewater treatment plant.

The overhead of T-101, will be pumped to the finishing column, T-102, at 833
kPa. The column is operated at higher pressure to introduce pressure swing which will
break the THF/water azeotrope. The overhead of the column containing THF and water
will be recycled back to T-101. Polymerization grade THF is produced as the bottom
product. The product specification for THF is less than 200 ppm of water. Then, the THF
product is sent to the product tank.

In the THF process, there are two recovery processes, unreacted MA and GBL
recovery and unreacted Hydrogen recovery. Unreacted MA and GBL are recovered from
T-100 residue. The mixture will then be pumped back to the reactor for further reaction.

For the hydrogen, as the mixture of hydrogen, water and THF emerges from the
overhead of V-100, it will be cool by refrigerant to -18°C and then be fed to the next flash
drum, V-101. In this flash drum, most of THF and water are collected at the bottom and is
fed to T-101 for purification while the overhead contains all the unreacted hydrogen and
traces of THF. The overhead stream is combined with the fresh hydrogen feed which will
then be fed to the THF reactor, R-101.

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3.3 CRITERIA FOR SITE SELECTION

Before the chemical plant can be constructed, a preliminary study need to be done in order
to make sure the production of 50,000 MTA/ year of THF plant is feasible to be constructed.
This study is based on the following criteria:
1. Site Location
2. Availability of Raw Material
3. Market demand
4. Transportation
5. Utilities Availabilities
6. Land Availability and Cost
7. Availability Manpower and Labour Cost
8. Climate Change

3.3.1 Availability of Raw Materials

The available sources of raw materials are an important factor to be considered in

designing a chemical plant. As in the production of THF, the raw materials used are Maleic
Anhydride, Hydrogen. The availability of these materials in bulk quantities should be
evaluated in the location selected. Other than that, distance to the supply of raw materials
can reduce the cost of transport in which raw materials are derived directly from the factory.

3.3.2 Market Demand

Recently, the demand for THF in spandex industries had been increasing. This promise
us a good response for a future growth of THF demand in Asia and around the world. For
market demand criteria, our target is the local demand from the industries in the country.
Local industries can buy THF with cheaper price by reducing the transportation cost and
import export tax.

3.3.3 Transportation Facilities

Convenient access to transport raw materials and products is essential to reduce costs.
The chemical industry is about to reduce costs and maintain sustainability. Basic
infrastructure should be considered a selected location, such as sea transport, road

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transport, rail and pipeline. The proximity to the sea transport, including ports is essential
to transport raw materials and products. For substances transported from or to distant
places, sea transport is a good option since the air transport is very expensive, limited
quantities and unsafe to transport certain materials. The choice will be road transport
where the materials are easily transported by road using tank truck. In addition, transport
by train cheapest way, but the number of destinations is limited due to lack of
infrastructure. Finally, the pipeline network will be an important factor in the transport of
the chemical industry. A network of pipeline in the plant is essential to allow the delivery
between the chemical processes. The construction of the pipeline is high, but ongoing
costs are low.

3.3.4 Utilities Availabilities

Every plant needs electricity and water to be operational. There are some places that have
different tariff of electricity and water. This depends on the supplier of electricity or water.
Electricity is one of the important sources in a chemical plant. It needed to run operations
unit, generate heat and a few more tasks. Basically, the process industries use large
quantities of water for cooling, washing, steam generation, and as a raw material in the
process. Hence, the plant must be located where a dependable supply of water is
available.

A large river or lake is preferable, however, it must be treated to make sure that
the quality of water is great and directly to avoid any contaminated. If the water supply
shows seasonal fluctuations, it may be desirable to construct a reservoir or to drill several
standby wells. The temperature, mineral content, silt or sand content, bacteriological
content, and cost of supply and purification must also be considered when choosing the
water supply.

3.3.5 Land Availability and Cost

In order to build a chemical plant, the cost of land is very important. Land prices vary
depending on the location of the area. Some of the areas suitable for the construction of
chemical plants, but land prices are very high. The problem with high land prices could be
solved by renting land. In addition, a cheaper land is an advantage if it is next to an
industrial area of chemistry that has good infrastructure. The selection of a good place
must also provide a large area for future development.

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 Chemical industry always related to the large amounts of highly toxic materials.
The location of land must be far from food industries and residential area. The soil
particles should be able to absorb metal or organic contaminants.

3.3.6 Manpower Availability and Labour Cost

The plant site needs to have an abundant supply of labour. The labour cost and resource,
in particular location play a major role in determining the proposed project site. Type and
supply of labours available in the vicinity of a proposed plant site must be examined. Skilful
construction workers can be brought in from outside the site area and share their
experience and knowledge with unskilled workers. The labours can be experience labours
or inexperience labours, depend on the work positions that are available. Usually
inexperience labours come from fresh graduate students from colleges or universities.
Inexperience labours can be train by providing sufficient training. In addition, the company
should provide accommodations for the worker so that the worker can work on time and
can maintain the work stability between them. Cost operation can be reduced by the
availability of inexpensive manpower and restrictions on the number of working hours per
week.

3.3.7 Climate Change

Climate change at selected location must also be considered. The possibility of

earthquakes, weather changes, and subsidence avalanches of that site should be seen
seriously. This is because the plant equipment should be designed according to the
climate and weather in the area. Wind load, pressure and temperature in the area are the
factors to be analysed. Certain material can withstand certain pressure and temperature.
Location with four season climate should be avoided due to high construction cost to build
a plant that can be operated during winter or cold season. Bad consequences will occur in
the future if this factor is neglected.

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3.4 POTENTIAL SITE LOCATION

The raw materials to produce THF are hydrogen and Maleic anhydride. The plant should
be located near to the raw materials manufacturer to save the transportation cost. There
are several industrial estates in Asia are capable of locating plants for this type of industry.
Such potential locations are:

1. Navi Mumbai, India

2. Fujian, China
3. Incheon, South Korea

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3.5 SELECTION OF SITE LOCATION

3.5.1 India

India is also known as Republic of India is located in South Asia, which is bounded by the
Indian Ocean on the south, the Arabian Sea on the south-west, and the Bay of Bengal on
the southeast. It is the seventh largest country by area, the second most populous country
with over 1.2 billion people, and the most populous democracy in the world. India is a
federal constitutional republic governed under a parliamentary system consisting of 29
states and 7 union territories. Furthermore, India's economy is the world's seventh largest
by nominal GDP and the third largest in terms of purchasing power parity (PPP). Following
market-based economic reforms in 1991, India became one of the main economic fastest
growing country and has been considered as a newly industrialized country.

Figure 3-2: Maps of India

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3.5.1.1 Site Location

India consist of 29 states and 7 union territories. Navi Mumbai is one of the best organized
and largest municipality in the world located on the west coast of the Indian state of
Maharashtra. It is also known as New Mumbai or New Bombay, which is the planned
business township of Mumbai. The main advantage of Navi Mumbai are it is situated near
to the Sea Port and raw materials production. This advantage can reduce the
transportation cost.

Taloja Industrial Area Figure 3-3 consist of 277 industrial units from large to small
type of industries. Some of known industries in this area are chemical, pharmaceutical,
plastic and paper industries. Taloja Industrial Area is located at Taloja which is about 15km
down to the Panvel - Pune Road.

Figure 3-3: Map of Taloja Industrial Area

3.5.1.2 Availability of Raw Materials

The process selected for this plant requires Hydrogen and Maleic Anhydride as raw
materials to produce THF. The nearest available supplier for raw materials can be gained
from A. B. Enterprises, Alchemie Gases & Chemicals Pvt. Ltd., Six Sigma Gases India
Pvt. Ltd. and Leo Chemo Plast Pvt. Ltd. which located at Mumbai.

Table 3-1 shows the type of raw materials that provide by these companies. The location
of these companies is about 30-40 km from the industrial area.

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Table 3-1: Companies can supply raw materials in India
Companies Raw Materials Availability
A. B. Enterprises Maleic Anhydride
Leo Chemo Plast Pvt. Ltd.
Alchemie Gases & Chemicals Pvt. Ltd. Hydrogen Gases
Six Sigma Gases India Pvt. Ltd.

3.5.1.3 Market Demand

THF is one of the raw materials used in production of Spandex. The nearest demand of
THF from the industrial area is Ginza Industries Limited. Ginza Industries Limited originally
started in Mumbai in 1986, it has set up shop in Maharashtra and Gujarat since then, and
has been established in business attire and components. Product that produce from this
company are Raschel and Warp Knitted Fabrics and Laces- of which we also happen to
be the largest suppliers, Cotton Torchon Laces, Woven and Knitted Elastics, Embroidery
Laces and Fabrics, Textured and Twisted Yarns, Eye & Hook, Circular Knitted Fabrics,
Lingerie and Fashion Apparels. Besides, Tiruppur, Ahmedabad, Ludhiana and New Delhi
also have a lot of Spandex industries which needs THF as raw materials.

There are also others spandex industries in India required THF as the raw material
such as the Indorama Industries Limited. Indorama Industries Limited is a company
Indorama Corporation, has set up a new project to produce spandex filament yarns at
Baddi, Himachal Pradesh in India. The state of the art plant is equipped with the latest
technology to produce 5000 MT of yarn per year in the range of 20 denier to 1120 Denier.

3.5.1.4 Transportation Facilities

3.5.1.4.1 Sea Port Facilities

Nhava Sheva Port is also known as Jawaharlal Nehru Port located in Navi Mumbai,
Maharashtra, which is a port on Arabian Sea shows in
Figure 3-4. This port is also the Western Dedicated Freight Corridor terminal
proposed by the Indian Railways. Main exports from Nhava Sheva Port are textiles, sports
goods, carpets, textile machinery, meats without bones, chemicals and pharmaceuticals.
The main imports are chemicals, machinery, plastics, electrical machinery, vegetable oil

14
and aluminium and non-ferrous metals. Nhava Sheva Port is the largest container port in
India and this port handles cargo traffic, mostly originating from or destined for
Maharashtra, Madhya Pradesh, Gujarat, Karnataka, as well as most of North India. Taloja
Industrial Area is located 25-35 km from the Nhava Sheva Port which are great advantages
for import and export.

Figure 3-4: Maps of Nhava Sheva Port

3.5.1.4.2 Airport Facilities

Chhatrapati Shivaji International Airport is also known as Mumbai Airport, located 40-45
km from Taloja Industrial Area. Air cargo in not very suitable for chemical transportation.
Air cargo can only transport small capacity product, but very high cost.

3.5.1.4.3 Land Facilities

Land transport facilities are one of the important factors when dealing with chemicals. Most
of the chemical transport from one place to another place by using a truck tank and railway.
Aditya Bulk Carrier is one of the companies that provide service in the transportation of
liquid cargos: non-hazardous chemicals and chemical products of different hazard classes,
liquefied gases and liquid products of different industry. This company expanded its wings
in Global market & started its Door to Door services with China.

Railways also one of the important land transportation to transport industrial

product. Delhi Mumbai Industrial Corridor Project is a USD 100 billion Industrial

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Development Project, which aimed to develop industrial zones covering all six states in
India that would stimulate economic development in the region and develop the industry.
This is the largest infrastructure project in India covering an overall length of 1483 km
between the political capital and the business capital of India such as Delhi and Mumbai.
Six States that cover in this project are Uttar Pradesh, National Capital Region of Delhi,
Haryana, Rajasthan, Gujarat and Maharashtra, with end terminals at Dadri in the National
Capital Region of Delhi and Nhava Sheva Port near Mumbai. Industrial corridors constitute
world class infrastructure such as high-speed transportation (rail, road) network, ports with
state-of- the-art cargo handling equipment, modern airports, special economic regions/
industrial areas, logistic parks/ transshipment hubs, knowledge parks focused on feeding
industrial needs, complementary infrastructure such as townships/ real estate, and other
urban infrastructure along with enabling policy framework. This project is under
construction and expected to complete by 2017.

3.5.1.5 Utilities Availabilities

3.5.1.5.1 Electrical Power Supply

The Tata Power Station is the largest power producer in India. Tata Power generates about
8669 MW, which 7285 MW of the power from thermal power plants. The company has
been linked to a growing legacy as a business city Mumbai for over nine decades. Mumbai
growth has really been getting power from a reliable power supply Tata Power. Tata Power
has now spread its presence throughout the country and abroad. Outside Mumbai, the
company has a generation capacity in the state of Jharkhand, West Bengal, Gujarat and
Karnataka.

Table 3-2: Electrical tariff Tata Power Station (Source: Tata power website)
Consumer Category Fixed/ Demand Charge Tata Power Net Tariff
Industries USD 3.01 /kvA/Month USD 0.14/ kWh
Commercial USD 3.01 /kvA/Month USD 0.13/ kWh
Temporary Supply USD 6.78 /Connection /Month USD 0.19/ kWh
Metro and Monorail USD 3.01 /kvA/Month USD 0.13/ kWh

From Table 3-2, high tension industries electrical tariff rate is USD 0.13 - USD 0.14
which is depends on currency rate.

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3.5.1.5.2 Water Supply
Clean water supply is important for the industry as a cooling water. It is mainly used in
cooling tower and heat exchanger. As the chemical plant operates 24 hours per day,
continuous water supply for the chemical plant is very important. In 2005 none of the 35
cities of India with a population of more than one million water distributed to more than a
few hours a day, even if the infrastructure is usually sufficient. Navi Mumbai is a planned
city with more than 1m inhabitants, has achieved continuous supply for about half its
population as of January 2009.

Table 3-3: Water tariff for Navi Mumbai

No Particular Bulk Supply Water rate
(USD /m3)
1 CIDCO (Industrial) 0.13
2 JNPT/SEZ 0.36
3 Panvel Municipal Council 0.15
4 Gram Panchyat 0.06
5 Other than above categories, Housing Project, Small scale
business or other institution
a) Retail 0.22
b) Non-Domestic 1.09

Based on Table 3-3, water tariff for industrial zone Navi Mumbai is inexpensive.
Continuous water supply and cheap water tariff are the greatest advantage to build a
chemical plant.

3.5.1.6 Land Availability and Cost

Land cost is one of the investment to build a chemical plant. Some industrial area sells the
land and some of the area only provide rental land. Buying the land for the plant site is
more profitable in the long term because we can sell back the land at the current price of
the market, at the end of the plant life, instead of renting the land. From India’s property
portal www.99acres.com, the available land for plant development is 12 Acre. The cost of
land at Taloja Industrial Area approximately USD 382/m2. It is a reasonable price for the
industrial area.

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3.5.1.7 Manpower Availability and Labour Cost

Manpower supply is important to make sure the plant can operate smoothly. Manpower
with skill is an advantage for Chemical Industries. Based on Reserve Bank of India, the
number of unemployed people registered is around 40 million. It is a huge amount of labour
available.

Table 3-4: Employment in public and organised private sectors (in million)
Year Public Sector Private Sector Number of
(End-March) (End-March) persons on the
live register
(End-December)
2000-01 19.14 8.65 42.00
2001-02 18.77 8.43 41.17
2002-03 18.58 8.42 41.39
2003-04 18.20 8.25 40.46
2004-05 18.01 8.45 39.35
2005-06 18.19 8.77 41.47
2006-07 18.00 9.24 39.97
2007-08 17.67 9.88 39.11
2008-09 17.80 10.38 38.15
2009-10 17.86 10.85 38.83
2010-11 17.55 11.45 40.17
2011-12 17.61 12.04 44.79
Source: (Reserve Bank of India, 2015)

Table 3-4 shows the trend number of work force in difference sector. Navi Mumbai
and neighbouring state have facilitated many institutions which provide training, half skill
and full skill labour. Therefore, sufficient manpower for Taloja Industrial Area provided if
the plant set up there. The institution near Mumbai as follows:-
1. Mukesh Patel School of Technology Management & Engineering
2. College of Modern Technology & Engineering
3. Mumbai University
4. Indian Institute of Technology, Bombay
5. Veermata Jijabai Technological Institute, Mumbai
6. KJ Somaiya College of Engineering, Mumbai
7. Fr. Conceicao Rodrigues College of Engineering, Mumbai

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 8. Don Bosco Institute of Technology, Mumbai
9. MCT’s Rajiv Gandhi Institute of Technology, Mumbai

The cost of labour depends on the skills and education. The average cost of labour
in India is around USD 170/month, which is cheaper than another country. Low labour cost
can reduce the operating cost of the plant.

3.5.1.8 Climate Change

Navi Mumbai is a tropical climate because of geographical location on earth. Navi Mumbai
experiences a rainy season from June until October. There is only small temperature
difference between winter and summer climate. The average temperature of the area is
27.2 °C while the maximum and minimum temperature are 31.2 °C and 23.7 °C
respectively. Maharashtra had experienced flooding in July 2005. This natural disaster
claimed more than 1094 lives. Many people were stranded on the road, homeless, and
many walked away, came home from work that evening. Flooding caused by 24-hour
heavy rainfall. There is no other natural disaster happening around Navi Mumbai so far.

19
3.5.2 China

China, which is officially known as the People's Republic of China (PRC), is a sovereign
state in East Asia. It is the world's most populous country, with a population of over 1.35
billion. The growth rate in China is 0.9% per year (Bergaglio, 2000). PRC was formally
established, with its national capital at Beijing on October 1949. People's Republic of China
is a one-party state governed by the Communist Party of China, with its seat of government
in the capital city of Beijing. It has jurisdiction over 22 provinces as shown in Figure 3-5,
five autonomous regions, four directly controlled municipalities (Beijing, Tianjin, Shanghai
and Chongqing) and two mostly self-governing special administrative (Hong Kong and
Macau); claiming sovereignty over Taiwan. China is the world's second-largest country by
land area covering approximately 9.6 million square kilometres.
China became the largest manufacturing economy in the world. It displaced the
United States as the world largest manufacturing nation since 2010 and widened its lead
in 2013 with a 23.2% share of manufacturing activity while the U.S. is in second place with
a 17.2% share (Meckstroth, 2015).

Figure 3-5: Maps of China

20
3.5.2.1 Site Location

China consist of over 22 provinces and Fujian is the province that has been selected.
Fujian is also known as Fouken or Hokkien is a province that located at the southeast
coast of China. Fujian is bordered with Zhejiang, Jiangxi and Guangdong, while the
southeast of Fujian is East China Sea. The population of Fujian province increased from
12 million people in 1950 to 30 million people in 1990 (Banister, Wu, & Jamison, 1993)
and the population increased to 37.88 million people at the end of 2003. At the end of
2013, the population in Fujian increased to 37.74 million. The total area of land in Fujian
approximately 121400 km2.

Figure 3-6: Maps of Fujian

The Xiamen export processing zone has been chosen as a location to build a plant
due to it have a very strategic location. Type of industry in this area is chemical production

21
and processing, heavy industry, instrument and industrial equipment production. It is not
a problem to build a chemical plant in this area.

Figure 3-7: Xiamen Export Processing Zone in Fujian (Source: Google Maps)

3.5.2.2 Availability of Raw Material

The main raw materials used are Maleic Anhydride and Hydrogen gas for production of
THF. It is an advantages if the raw materials supplier located near to the plant site. The
nearest company that can provide raw materials are Qingdao Ruifeng Gas Co., Ltd. and
Fujian Zhongmin Chemical Co., Ltd. which average distance 300 km to 700km from the
plant site. It is an acceptable distance, but still have to pay more for transportation cost.

3.5.2.3 Market Demand

Demand of THF in Fujian is due to lots of Spandex industries in this province such as
Fujian Gaoshi Weaving Industry Co., Ltd., Bakee (Fujian) Industry Co. Ltd, Fujian Jingang
Industrial Co., Ltd. and Zhengjiang Huafon Spandex Co., Ltd. Product, produce by most
of these companies are elastic lace fabric, jacquard lace, non-elastic polyester non-elastic
lace and many more. Near to the market demand is an advantage because it can reduce

22
on transportation cost. Reduce the transportation cost also can reduce the price of the
product. Those companies will be more interested to buy cheaper raw materials.

3.5.2.4 Transportation Facilities

3.5.2.4.1 Sea Port Facilities

Xiamen is one of the four original special economic zones in China, is administered as a
sub provincial city in Fujian province. Xiamen port is one of the top ten ports in China. It is
a huge, deepwater, ice-free port that is free from silt (Chenggong et al., 2010). The port is
located in Xiamen Island, situated at the mouth of the Jiulong River. It has a natural
harbour that is very good and has connected with the mainland. Xiamen port located 5–
10 km from the industrial site. This is an advantage for import and export.

Figure 3-8: Maps location of Xiamen port from plant site

3.5.2.4.2 Road Facilities

Due to the mountainous areas of Fujian and traditional dependence on maritime transport,
the train came to the region relatively late. The first railway link to the neighbouring region
Jiangxi, Guangdong and Zhejiang provinces, opened respectively, in 1959, 2000 and
2009. As of October 2013, Fujian has four rail links with Jiangxi to the northwest: the

23
Yingtan-Xiamen Railway (opened 1957), which Hengfeng-Nanping railway (1998),
Ganzhou-Longyan railway (2005) and high-speed Xiangtang-Putian railway (2013).

Single rail for western Fujian to Guangdong, Zhangping-Longchuan Train (2000),

will be accompanied by Xiamen-Shenzhen High Speed Railway (Xiashen Line) at the end
of 2013. Xiashen Line form the south-central part of the East Coast of China high-speed
rail Corridor. Wenzhou-Fuzhou and Fuzhou-Xiamen section of this corridor into operation
in 2009 and links Fujian and Zhejiang, with trains running at speeds up to 250 km/ h (155
mph).

In Fujian, the coastal cities and inland linked by Nanping, Fuzhou (1959),
Zhangping-Quanzhou-Xiaocuo (2007) and Longyan Xiamen Railway (2012). To attract
investments in Taiwan, the province plans to increase train length by 50% to 2,500 km.

3.5.2.4.3 Airport Facilities

Xiamen Gaoqi International Airport is the airport serving the city of Xiamen in Fujian
province. The airport is located on the north side Xiamen Island, which is 10-20 km from
the plant site. In 2012, Xiamen airport is the 8th busiest airport in terms of cargo traffic in
China, and the 11th busiest in terms of passenger traffic.

3.5.2.5 Utilities Availabilities

3.5.2.5.1 Electrical Power Supply

There are lots of major power supply in Fujian province. Most of the major electrical power
supplies using coal, oil and gas as source of energy. Only some of the area using
hydroelectric power station and nuclear reactor. The major power supply nearest to the
Xiamen export processing zone are Xiamen Eastern LNG Power Station. This power
station using non-renewable energy as a source of electrical energy such as oil and gas.
Assume that the rate of industrial tariff is approximately equal to the domestic tariff. The
electricity tariff in Xiamen area is approximately USD 0.08/ kWh. It is a reasonable tariff
price for industries.

24
3.5.2.5.2 Water Supply
Water supply is a key factor in any solution and therefore it is important to understand the
basic infrastructure systems. Xiamen get fresh water from neighbouring Zhangzhou. For
domestic use water primarily from the harvested rainwater stored in reservoirs and
groundwater (via the pump). Xiamen will set out to build a water supply system loop-
shaped with a variety of resources to ensure the safety of drinking water, officially
announced in Xiamen. By the end of the year, the water from the Creek North will be sent
to Xiamen via hidden pipelines. After completion of the project, the Jiulong River water will
be delivered to Xiamen through underground pipelines to prevent contamination. Water
tariff in Xiamen industries is same with the tariff for residential. As shown in Table 3-5, the
water tariff for industrial in Xiamen is USD 0.28/m3 which is same with residential rate.

Table 3-5: Urban water supply tariff rate standard in Xiamen in 2004
Item Price (USD/ m3)
Residential 0.28
Industrial and infrastructure 0.28
General Commercial 0.28
Specific Industries 0.44
Sources: (Fu et al., 2008)

3.5.2.6 Land Availability and Cost

The Xiamen Export Processing Zone is located at the tip of the triangular region
Zhongzhou-Quanzhou-Xiamen in southern Fujian province, which is the most developed
economy, industry and trade is the best development in the region. Facing the island of
Taiwan across the Taiwan Strait, it is just between Zhujiang Delta and Changjiang Delta,
the two most economically developed areas on the coast of China.
As one of the first 15 national-level export processing zone, which is approved to
be established in April 2000 by the State Council, the Xiamen Export Processing Zone has
a planned area of 2.46 km2. Construction area of 1.46 km2 in Phase 1 has been examined
and approved jointly by eight ministries and national commissions on January 23, 2002
and put into operation on September 8, 2002. The available area to build a new plant is
approximately 1 km2 equivalent to 247 acres.
The land in Xiamen Export Processing Zone are not for sale. Only rental land
provide in this area. Rental cost in this area are USD 3.3 – USD 4.1/m2/month. The rental
price is reasonable for industrial site, but there is some disadvantage. Buying a land is

25
much better than rental a land because at the end of plant site life, the land can be sell
with the current price of the year.

3.5.2.7 Manpower Availability and Labour Cost

Manpower availability is an important factor to run the plant smoothly. Based on trading
economics, approximately 1 million people unemployed in china. This is a small number
of unemployment if compare with India 44.79 million people unemployed. Despite all the
ups and downs of China's economy over the past decade, the official unemployment rate
is still very stable. As shown in Figure 3-9, the registered urban unemployment rate was
only 4.1% today. This seems to indicate an economic power, but the problem is that it has
been sitting on the stage right, without moving, since the end of 2010. And it has stayed in
the range of 4.0 to 4.6% absurdly narrow since 2002, even in the depths of the global
financial crisis.

Figure 3-9: Unemployment rate in four different country

Source: (Economics, 2015a)

Fujian and neighbouring province have many institutions which can provide
training, half skilled and full skill labours. Therefore, it is not a problem to find skilful
manpower in this area. The nearest institution in Fujian as follows:-

26
 1. Fujian University of Technology
2. Xiamen University
3. Fuzhou University
4. Huaqiao University
Foreign-funded companies should adopt systems that work less than 8 hours daily
and in less than an average of 44 hours per week. If necessary for production and
operation, overtime may be permitted, but not more than 3 hours a day and 36 hours per
month. Overtime shall be given, and he shall not be less than 150%, 200% and 300% of
the normal wage for overtime at ordinary times, on days off and on holidays and festivals
each. The minimum wages in China are around USD 300-316/ month while the average
wages for skilled person manufacturing industries is between USD 600-669/month.

3.5.2.8 Climate Change

In China, the vast land spanning many degrees of latitude with complicated areas, climate
varies radically. China has a wide range of temperature and rainfall zones, including
continental monsoon areas. In winter most areas become cold and dry in the summer heat
and rain.

Fujian has a humid subtropical climate affected by the East Asian monsoon; long
summer, very hot and humid, winters short, medium and dry. Fujian is also subject to
typhoon in late summer and early autumn. The minimum temperature in Fujian is from
10.9°C in January to 28.9°C in July. The average temperature in this area is 19.84°C.

27
3.5.3 South Korea

South Korea is officially known as the Republic of Korea and commonly referred to as
Korea. Korea is a sovereign state in East Asia, constituting the southern part of the Korean
Peninsula. It shares land borders with North Korea in the north, and overseas borders with
Japan and China in the east to the west respectively. South Korea have a population of
51 million people and half of them reside in the Seoul Capital Area. South Korea is an East
Asian countries most advanced in the Human Development Index. Korea is among the
richest in the world, enjoy the highest median income and average wages in Asia. South
Korea is one of the few developed countries that avoided recession during the global
financial crisis.

The main administrative divisions in South Korea are eight provinces, one special
self-governing province, six metropolitan cities, a special city and the metropolitan
autonomous ports. The 8 provinces in South Korea are Gyeonggi, Gangwon, North
Chungcheong, South Chungcheong, North Jeolla, South Jeolla, North Gyeongsang and
South Gyeongsang with one special self-governing province which in Jeju. Six
metropolitan cities in South Korea cover Busan, Daegu, Incheon, Gwangju, Daejeon and
Ulsan. Seoul is the special city in South Korea while Sejong is the metropolitan
autonomous city. Figure 3-10 shows the details maps of South Korea with regions.

In 2005, just under half the population of South Korea expressed no religious
preference. According to Republic of Korea International Religious Freedom Report 2008,
most of the remaining are Buddhist or Christian. According to the 2007 census, 29.2% of
the population at that time was a Christian (18.3% themselves as Protestant, 10.9% as
Roman Catholic), and 22.8% are Buddhist.

28
Figure 3-10: Maps of South Korea

3.5.3.1 Site Location

Incheon is officially known as the Incheon Metropolitan City, is a city located in the
northwest of South Korea, Seoul Gyeonggi bordered to the east. The city is home to just
4,700 people when Jemulpo port was built in 1883. Today, 2.9 million people live in this
city, making it Korea's third most populous after Seoul and Busan. Incheon has since led
the economic development of Korea by opening its port to the outside world, ushering in
the modernization of Korea as an industrial centre. In 2003, the city was designated as the
first free economic zone in Korea. Since then, large local companies and global companies

29
are increasingly investing in the Incheon Free Economic Zone, including Samsung which
chose Songdo International City as its new investment destination for the bio industry.

The Korean industrial complex consists of general industrial complex and the
industrial complex for foreign companies. By having the right management, general
industrial complexes can be classified into the Central Industrial Complex, Regional
Industrial Complex and Agro-Industrial Complex. The National Industrial Complex is set
for regions that are less developed, or put national core industries, state-of-the-art science
and technology, industry, or free export area.

The industrial areas that have been selected to develop the chemical plant is
Namdong Industrial Complex, which located at Nonhyun Dong as shown in Figure 3-11.
Namdong-gu Branch Office was opened on 16 January 1992 by was approved on
December 15, 1991 by the Ministry of Interior in accordance with Article 246, Ordinance
Namdong-gu Incheon Metropolitan City established on January 1, 1992. The branch office
was established for the support efficient administration and management of the relevant
business in the Namdong Industrial Complex, the largest in the metropolitan area was
established in Namcheon-dong, Nonhyeon-dong, and Gojan-dong. It is located in the
entire Nonhyeon-dong, Namcheon-dong, and Gojan-dong in Namdong-gu, which is part
Incheon 40km southwest of Seoul.

Figure 3-11: Maps of Namdong Industrial Complex

30
3.5.3.2 Availability of Raw Material

The raw material is the important factor to decide the site location. To reduce in
transportation cost, plant site must be built near to the raw materials supplier. The best
location is the place that offers the suitable and reasonable price for the raw material.
Table 3-6 shows the nearer selected supplier which can supply raw material for production
of THF. Raw materials used in production of THF are maleic anhydride and hydrogen gas.
Maleic anhydride can be supplied by the Young's Corporation and Chemblue Corporation,
which is located 25-40 km from the plant site. It is a very short distance between plant site
and raw materials. This is an advantage to make sure the raw materials can be supplied
continuously to the plant.

Table 3-6: Raw material supplier in South Korea

Raw Materials Supplier Company
Maleic Anhydride Young's Corporation
Chemblue Corporation
Hydrogen Gas Danil Gaschem Co., Ltd.

Second raw materials used in the production of THF are Hydrogen gas. There are
only a few companies can supply the hydrogen gas in South Korea. One of the company
is Danil Gaschem Co., Ltd. which is located at Chungcheongbuk-do around 200-300 km
from the plant site. It is not a short distance but still can be considerable. The main produce
by Danil Gaschem Co., Ltd. are Nitrous Oxide, high purity oxygen, high purity hydrogen
and Specialty gas.

3.5.3.3 Market Demand

A business without a customer have no purpose, hence the demands, what customer
needs and the location of customers must be taken thoroughly before choosing the site.
THF is one of the raw materials used in production of Spandex. There are several
companies in South Korea used THF to produce spandex textiles such as Hyosung, Dong
Ho Products Co. and Youngshin Enterprise. Hyosung is one of the biggest spandex
company which has a global network of over 70 operation centres of all over the world
organized through 8 business centres. Hyosung is a global leader in several product
categories, such as tire cord, spandex, wool belts, air bags and fabrics are also
transformers, ATM unit. Hyosung is a textile manufacturer integrated with nylon, polyester
and spandex fabric as well. The textile business is an important part of Hyosung's portfolio.

31
3.5.3.4 Transportation Facilities

3.5.3.4.1 Land Transport

Korea is very advanced in public transport. Most of the people in the city using
public transport as the main transport. Incheon Bus Terminal, located at the terminus of
the eponymous subway, offers bus transportation to all parts of Korea. Many city bus lines
offer transportation within the city as well as neighbouring cities Bucheon, Gimpo, Seoul,
and Siheung. BRT offers transportation routes between Seoul and Incheon.

Local train service for Guro, Seoul, Cheongnyangni, Uijeongbu and Soyosan at
Line subway in Seoul 1. The line has 11 stations in Incheon and connected to the Incheon
Subway at Bupyeong station. Fast service on the same line with Seoul, Yongsan Station
to depart from the station and stopped Dongincheon major stations.

3.5.3.4.2 Sea Port Facilities

Port of Incheon is the second largest port in Korea after Busan’s sea port. It is the main
port in South Korea. Some of the facilities, which will operate with a constant draft of 14
meters in May 2015 will help Incheon port to be connected to the main port in the United
States, Europe and other continents. It is located near to the plant site which is 1 hour if
using public transport (

32
Figure 3-12). There are some tanker companies such as maritime connector and Hansung
Line Co., Ltd which provides service between Korea and China, with ships running from
Incheon to Weihai. In response to the characteristics of the route Incheon to Weihai that
require immediate delivery without any separate savings.

Near to the seaport is the main advantage. Most of the import, export or
transportation for chemical product by using sea and land. It the cost of transportation can
be reduced. Transportation by using sea cargo is much cheaper compare to air cargo and
it can transport in large scale.

33
 Figure 3-12: Maps of Incheon Port from Namdong Industrial Complex

3.5.3.4.3 Airport Facilities

Seoul-Incheon International Airport is the largest airport in South Korea, the main airport
serving the Capital Region, Seoul, and one of the largest airports and the busiest in the
world. Since 2005, it has been rated the best airport in the world by the Airports Council
International every year. It is also rated as the cleanest airport in the world and international
transit airport in the world by Skytrax.

The distance between the airports to the Namdong Industrial Complex is not very
far. For chemical industries, air transportation is not recommended due to high cost and
small quantity.

34
3.5.3.5 Utilities Availabilities

3.5.3.5.1 Electricity Tariff

Electricity is one of the major utilities used to operate a chemical plant. Chemical or
production plant commonly operates at 24 hours. It means that the plant will use a lot of
electricity. In Korea, the electricity tariff is changing based on season. Based on Table 3-7,
the tariff for summer and winter are slightly higher compare to spring and fall. There are
three different classifications which are low voltage, high voltage A and high voltage B.
Low voltage is for industries that use 220V and 380V. High voltage A is for industries that
use voltage between 3300V to 6600V while high voltage B is for industries that use up to
154000V.

Table 3-7: Electricitylightingor industrial, agriculture and street lightning in South Korea
Classification Demand Charge Energy Charge (USD/ kWh)
(USD/kW) Summer/Winter Spring/Fall
Low Voltage 4.77 0.07 0.05
High Option 1 5.58 0.08 0.06
Voltage A Option 2 6.43 0.07 0.05
High Option 1 5.16 0.08 0.06
Voltage B Option 2 5.94 0.07 0.05
(Source: Korea Electrical Power)

3.5.3.5.2 Water Tariff

In industries, water is mainly used as a cooling agent. Most of the equipment in the plant
required temperature control. Water from cooling tower will be used and circulate back to
cooling tower. Water also one of the important utilities to operate a chemical plant. The
domestic drinking water tariff in South Korea is USD 0.40/m3 and the wastewater tariff is
USD 0.11/m3. So the total tariff for water usage in South Korea is USD 0.51/m3. This tariff
is quite expensive compare to others country. Cheaper water tariff gives an advantage
water supply used continuously in the plant.

3.5.3.6 Land Availability and Cost

Namdong Industrial Complex is located in the entire area of Nonhyeon-dong, Namcheon-

dong, and Gojan-dong in Namdong-gu, which is the southwest part of Incheon and 40km
away from Seoul. The total area of this industrial complex is 2.37 Acres while the available

35
space to construct a new plant is 0.84 Acre. Namdong Industrial Complex is a very
strategic location to build a plant. But only have a limited land availability.

3.5.3.7 Manpower Availability and Labour Cost

South Korea seasonally adjusted unemployment rate decrease to 3.4% in October 2015
from 3.9% in June 2015 (Economics, 2015b). This jobless rate is lower than expectation
of 3.6%. The unemployment rate fell for the four straight months, remaining at its lowest
since January. Based on the unemployment rate, it is difficult to employ an enough
manpower. Industrial plant cannot operate smoothly without enough manpower. South
Korea is a developed country with high education level. There are several universities
which can provide skilful manpower. The nearest institution in South Korea is:-
1. Seoul National University
2. Korea Advanced Institute of Science & Technology
3. Pohang University of Science and Technology
4. Yonsei University
5. Korea University

Besides the manpower availability, the cost of labour is also important to measure
the profit and loss of the plant. Lower minimum wages give more profit to the company.
The minimum wages in South Korea are USD 4.73/hour, which is very high. The minimum
wages in manufacturing or skilful labour is approximately USD 3083/ month (Economics,
2015b).

3.5.3.8 Climate Change

Climate change is important to be considered because it will affect the cost of equipment.
South Korea features a subtropical climate with dry winters and having four distinct
seasons. The temperature differences between the hottest part in summer and the coldest
part in winter are extreme. In summer, the surrounding temperature can reach 35°C and
in winter, the temperatures can drop as low as -20°C. During winter, snowfall can cause
frosty weather in the city. Based on this temperature difference, the cost of equipment will
be increased. The equipment should be designed to operate at high and low temperature
smoothly without any problem. Some additional equipment such as heater should be
added to make sure the stream line did not frost during winter.

36
Summary of Site Characteristic in Each Location
Three locations have been selected as our potential sites. The summary of these three places is stated in Table 3-8 and the weightage of the
comparison is as shown in Table 3-9.

Table 3-8: Comparison for potential site location

Characteristic India China South Korea
Location Navi Mumbai Fujian Incheon
- Taloja Industrial Area - Xiamen Export Processing Zone - Namdong Industrial Complex
- 40-45 km to Chhatrapati Shivaji - 10-20 km from Xiamen Gaoqi - 1 hour 43 minutes from
International Airport International Airport Incheon Airport
- 25-35 km to Nhava Sheva Port - 5-10 km from Xiamen Port - 56 min from Incheon Regional
- 3 km from Haicang railway station Maritime Port
- Public transport
Type of Industry Chemical, Pharmaceutical, Paper, Chemicals Production and Processing Machineries
Plastic Heavy Industry Automobile parts
Instruments & Industrial Equipment
Production
Land Price USD 382/m2 Rented Land USD 413/m2
USD 3.3 - USD 4.1/m2/month
Available Area Available Land 12 Acre Planned Area 593 Acre Total Area 2.37 Acre
Development Area 361 Acre Occupied Area 1.53 Acre
Available Land 232 Acre Available Area 0.84 Acre

37
Road Facilities Aditya Bulk Carrier (Tank Truck) Haicang railway station Gyeongui Line Railway
Delhi Mumbai Industrial Corridor Project Fujian Taihua Transportation - Mostly public transport only
Equipment Co., Ltd
Sea Port Facilities Nhava Sheva Port Xiamen Port Incheon Regional Maritime Port
Airport Chhatrapati Shivaji International Airport Xiamen Gaoqi International Airport Incheon International Airport
Power Station Tata Power Station Xiamen Eastern LNG Power Station KEPCO
USD 0.11/kwh USD 0.08/kwh USD 0.06-0.07/kwh
Water Supply Continuous water supply Xiamen Water Supply Company Korea Water Resources
Gupta Water Supply Co USD 0.28/m3 Corporation
USD 0.13/m3 USD 0.51/m3
Raw Materials 1. Alchemie Gases & Chemicals 1. Fujian Zhongmin Chemical Co., 1. Chemblue Corporation
Availabilities Pvt.Ltd. Ltd.  25-35 km from raw
2. Six Sigma Gases India Pvt. Ltd. 2. Qingdao Ruifeng Gas Co., Ltd. materials
3. A. B. Enterprises 2. Young's Corporation
4. Leo Chemo Plast Pvt. Ltd.  280-300 km from raw materials  30-40 km from raw
materials
 30-40 km from raw materials 3. Danil Gaschem Co., Ltd.
 200-300 km from raw
materials
Demand 1. Ginza Industries Limited 1. Fujian Gaoshi Weaving Industry 1. Hyosung
2. Indorama Industries Limited Co., Ltd. 2. Dongho Products Co.
2. Bakee (Fujian) Industry Co. Ltd

38
 3. Fujian Jingang Industrial Co.,
Ltd.
4. Zhengjiang Huafon Spandex
Co., Ltd.
Labour Availability Population in India Population in China Population in South Korea
 1.252 billion people (2013)  1.357 billion people (2013)  50.22 million people (2013)
Unemployment rate Unemployment rate  3.1%
 3.6%  4.6%
Labour Cost USD 170/month Skill Labour USD 3083/month
- USD 600-669/month
Unskilled Labour
- USD 300-316/month
Residential Area BHK, Residential Apartment in Petali - Teyun Residential Area - Residential of Songwol-dong
BHK, Residential Apartment in Taloja - Straits International Community
Climate Tropical Climate (Navi Mumbai) Subtropical Climate 4 Season
Temperature - Mild winters Average – 18 °C
Average – 27.2 °C Temperature Max – 35°C
Max – 31.2 °C Average – 19.84 °C Min – (-20)°C
Min – 23.7 °C Max – 28.9°C
Min – 10.9°C
Typhoon Season

39
Table 3-9: Scoring of site comparison
Characteristic India China South Korea

Land Price 3 1 2

Land Availabilities 3 3 1

Land Transport Facilities 3 3 3

Distance from Port 2 3 2

Distance from Airport 3 3 3

Electricity Cost 1 2 3

Water Supply Cost 3 2 1

Distance from Raw Materials 3 1 2

Labour Availability 3 2 1

Labour Cost 3 2 1

Climate 3 2 1

Total 30 24 20

Based on the scoring analysis Table 3-9, India portrays the highest value of 30.
Hence, it can be concluded that the location is selected to set up the proposed plant
because of its advantage in most factors that considered and its ability to grow
as new developed Chemical Industrial area.

40
3.6 CONCLUSION

After several considerations have been done according to several factor, Taloja Industrial
Area, Navi Mumbai was selected as site location for production of THF. The selection of
site location was made based on the criteria such as operating cost, labour availability and
climate change.

Taloja Industrial Area was registered under Bombay Public Trust Act of Navi
Mumbai. According to Maharashtra Industrial Development Corporation (MIDC), the
price of industrial land in Taloja Industrial Area is USD 382/m2 which have 12 acres of
land available for development. The total available area is suitable for construction of THF
plant. The electrical utilities will be provide by TATA Power Station while the continuous
water supply can be obtain from Gupta Water Supply Co. TATA Power Station provide
electricity with tariff USD 0.11/kWh and Gupta Water Supply Co supply clean water at
tariff USD 0.13 m3.

Taloja Industrial Area have sufficient land for construction if the plant want and
also for any expansion. Besides, the site location has widely known as the potential buyer
and international buyers. The supplier and hydrogen gas3 can be found nearby the site
location. The supplier available are Alchemie Gases & Chemicals Pvt.Ltd., Six Sigma
Gases India Pvt. Ltd., A. B. Enterprises and Leo Chemo Plast Pvt. Ltd.

India is the second most populous country in the world that give a high number of
unemployment people. It can supply enough manpower to operate the plant. In addition,
there is a lot of local engineering university around India to supply skilful manpower.
Fresh graduated student can be recruited as junior engineer. Other than that, the labour
cost in India is cheaper compared to the other two countries. It can reduce the operating
cost of the plant. As a conclusion, the best site to be is in Navi Mumbai, India.

41