Site Selection

Dr.Bikash Mohanty Department of Chemical Engineering Indian Institute of Technology Roorkee

SITE SELECTION

If one is to design a chemical plant the site must be known. The cost of energy and raw materials, the type of transportation to be used, and the availability of labor all depend on the plant site. There are example which shows that a particular plant site is chosen because of the presence of a specific raw material or energy source. The geographical location of the final plant can have strong influence on the success of an industrial venture. Considerable care must be exercised in selecting the plant site, and many different factors must be considered. Primarily, the plant should be located where the minimum cost of production and distribution can be obtained, but other factors, such as room for expansion and safe living conditions for plant operation as well as the surrounding community, are also important. A general consensus as to the plant location should be obtained before a design project reaches the detailed estimate stage, and a firm location should be established upon completion of the detailed-estimate design. The choice of the final site should first be based on a complete survey of the advantages and disadvantages of various geographical areas and, ultimately, on the advantages and disadvantages of available real estate.

Interesting Case Studies

Some years ago Proctor & Gamble was considering building a plant in Massachusetts. After looking at a number of possible locations the team responsible for choosing the site noticed a vacant area next to a power plant.

They immediately realized that if the power company could supply them with steam at a reasonable price, they would not need to build steam generators as had been planned. Proctor & Gamble bought the site and negotiated a long-term contract for steam and power that was beneficial to both companies. This site would not have been brought to the teams attention by their local contacts. It was found because some of the team members were quick to recognize an unmentioned potential saving.

Case Studies Contd

An American Salt Company plant and the Dow Chemical Companys Midland plant also benefit directly from each others presence. Dow found that after recovering bromine from brine it had more salt left than it desired. American Salt need salt. By locating next to Dows plant it was able to buy this salt stream for less than it would cost to mine it or pump it from natural underground reservoirs. In turn, Dow was able to sell an unwanted stream that it would otherwise have had to pump back into the ground.

The American Salt plant is typical of many satellite plants. These are plants that either use a by-product or a waste stream from another plant or are built mainly to supply a needed chemical to an adjacent plant. The nearby presence of another plant determines their location.

These examples illustrate how the choice of a site and the design of a plant are interlinked. In fact, ideally, the site cannot be chosen without designing a plant for each possible location and then making an economic comparison. Realistically, this would be too expensive, so the list of potential sites must be reduced before a full economic evaluation is attempted.

Major Site Location Factors

1. Raw materials availability

2 . Markets
3 . Energy availability 4 . Climate 5 . Transportation facilities 6 . Water supply 7 . Waste disposal 8 . Labor supply 9. Taxation and legal restrictions 10 . Site characteristics 11. Flood and fire protection .

1 2 . Community factors

Location of Raw Materials

One possible location is a site near the source of the raw materials. This location should always be one of the sites considered. The source of raw materials is one of the most important factors influencing the selection of a plant site. This is particularly true if large volumes of raw materials are consumed, because location near the raw-materials source permits considerable reduction in transportation and storage charges. Attention should be given to the purchased price of the raw materials, distance from the source of supply, freight or transportation expenses, availability and reliability of supply, purity of the raw materials, and storage requirements. If a plant is to recover bromine from sea water it will obviously be placed next to the sea. The bromine concentration of sea water is 60 to 70 ppm (parts per million). It is obviously more expensive to transport 1,000,000 pounds of water than 70 pounds of bromine. Whenever the quantity of the product is small compared with the amount of raw materials, the site is placed near the material source.

Location of Markets

The location of markets or intermediate distribution centers affects the cost of product distribution and the time required for shipping. Proximity to the major markets is an important consideration in the selection of a plant site, because the buyer usually finds it advantageous to purchase from nearby sources. It should be noted that markets are needed for by-products as well as for major final products. The foam and consumer production plants are usually constructed close to the prospective markets. Only a small amount of mass can be loaded in a boxcar or truck. The density of polystyrene is 2.4 lb/ft3 (38Skg/m3). It is made from styrene, which has a density of 56.3 Ib/ft3 (902 kg/m3). The foam product occupies 23 times as much space as the styrene, and the polystyrene would cost between 10 and 20 times as much to ship. Consumer products often are delivered in small shipments to a large number of customers. They also involve packaging in small attractive containers that decrease the amount of product per unit volume and add mass. Since low shipping rates apply only to large bulk shipments going to a single destination, it is often desirable to place production of consumer products near the markets.

Alternately, consumer products could be shipped en masse to distribution centers located near the population centers. From here they would be shipped by truck to individual customers. This type of facility has sales advantages. The retailer can be guaranteed that his order will be delivered within 24 hours after its receipt. This allows him to provide excellent customer service with a small warehouse. These centers could receive bulk quantities, but then each one would have to package the product. This would mean a duplication of packaging facilities.

Transportation

Transportation is the major factor for the site selection. The transportation costs accounts heavily on companys balance sheet. The least expensive method of shipping is usually by water; the most expensive is by truck. In between are pipelines and trains. A pipeline is the cheapest form of transportation to operate, but it requires a large capital investment and therefore a large throughput.

Water, railroads, and highways are the common means of transportation used by major industrial concerns. The kind and amount of products and raw materials determine the most suitable type of transportation facilities. In any case, careful attention should be given to local freight rates and existing railroad lines. The proximity to railroad centers and the possibility of canal, river, lake, or ocean transport must be considered: Motor trucking facilities are widely used and can serve as a useful supplement to rail and water facilities.

If possible, the plant site should have access to all three types of transportation, and, certainly, at least two types should be available. There is usually need for convenient air and rail transportation facilities between the plant and the main company headquarters, and effective transportation facilities for the plant personnel are necessary.

Energy availability.

Power and steam requirements are high in most industrial plants, and fuel is ordinarily required to supply these utilities. Consequently, power and fuel can be combined as one major factor in the choice of a plant site. Electrolytic processes require a cheap source of electricity, and plants using electrolytic processes are often located near large hydroelectric installations. If the plant requires large quantities of coal or oil, location near a source of fuel supply may be essential for economic operation. The local cost of power can help determine whether power should be purchased or self-generated.

Climate.

If the plant is located in a cold climate, costs may be increased by the necessity for construction of protective shelters around the process equipment, and special cooling towers or air-conditioning equipment may be required if the prevailing temperatures are high. Excessive humidity or extremes of hot or cold weather can have a serious effect on the economic operation of a plant, and these factors should be examined when selecting a plant site.

Water supply

The process industries use large quantities of water for cooling, washing, steam generation, and as a raw material. The plant, therefore, must be located where a dependable supply of water is available. A large river or lake is preferable, although deep wells or artesian wells may be satisfactory if the amount of water required is not too great. The level of the existing water table can be checked by consulting the state geological survey, and information on the constancy of the water table and the year-round capacity of local rivers or lakes should be obtained. 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 for supply and purification treatment must also be considered when choosing a water supply.

Waste disposal

In recent years, many legal restrictions have been placed on the methods for disposing of waste materials from the process industries. The site selected for a plant should have adequate capacity and facilities for correct waste disposal. Even though a given area has minimal restrictions on pollution, it should not be assumed that this condition will continue to exist.

In choosing a plant site, the permissible tolerance levels for various methods of waste disposal should be considered carefully, and attention should be given to potential requirements for additional waste-treatment facilities.

Labor supply

The type and supply of labor available in the vicinity of a proposed plant site must be examined. Consideration should be given to prevailing pay scales, restrictions on number of hours worked per week, competing industries that can cause dissatisfaction or high turnover rates among the workers, and variations in the skill and productivity of the workers.

Taxation and legal restrictions

State and local tax rates on property income, unemployment insurance, and similar items vary from one location to another. Similarly, local regulations on zoning, building codes, nuisance aspects, and transportation facilities can have a major influence on the final choice of a plant site. In fact, zoning difficulties and obtaining the many required permits can often be much more important in terms of cost and time delays than many of the factors discussed in the preceding sections.

Site characteristics

The characteristics of the land at a proposed plant site should be examined carefully. The topography of the tract of land and the soil structure must be considered, since either or both may have a pronounced effect on construction costs. The cost of the land is important, as well as local building costs and living conditions. Future changes may make it desirable or necessary to expand the plant facilities. Therefore, even though no immediate expansion is planned, a new plant should be constructed at a location where additional space is available.

Flood and fire protection

Many industrial plants are located along rivers or near large bodies of water, and there are risks of flood or hurricane damage. Before selecting a plant site, the regional history of natural events of this type should be examined and the consequences of such occurrences considered. Protection from losses by fire is another important factor in selecting a plant location. In case of a major fire, assistance from outside fire departments should be available. Fire hazards in the immediate area surrounding the plant site must not be overlooked.

Community factors

The character and facilities of a community can have quite an effect on the location of the plant. If a certain minimum number of facilities for satisfactory living of plant personnel do not exist, it often becomes a burden for the plant to subsidize such facilities.

Cultural facilities of the community are important to sound growth. Churches, libraries, schools, civic theaters, concert associations, and other similar groups, if active and dynamic, do much to make a community progressive. The problem of recreation deserves special consideration. The efficiency, character, and history of both state and local government should be evaluated. The existence of low taxes is not in itself a favorable situation unless the community is already well developed and relatively free of debt.

Summary
Selection of the Plant Site

The major factors in the selection of most plant sites are (1) raw materials, (2) markets, (3) energy supply, (4) climate, (5) transportation facilities, and (6) water supply. For a preliminary survey, the first four factors should be considered. Thus, on the basis of raw materials, markets, energy supply, and climate, acceptable locations can usually be reduced to one or two general geographical regions.

In the next step, the effects of transportation facilities and water supply are taken into account. This permits reduction of the possible plant location to several general target areas. These areas can then be reduced further by considering all the factors that have an influence on plant location. As a final step, a detailed analysis of the remaining sites can be made. Exact data on items such as freight rates, labor conditions, tax rates, price of land, and general local conditions can be obtained. The various sites can be inspected and appraised on the basis of all the factors influencing the final decision. Many times, the advantages of locating a new plant on land or near other facilities already owned by the concern that is building the new plant outweigh the disadvantages of the particular location.

In any case, however, the final decision on selecting the plant site should take into consideration all the factors that can affect the ultimate success of the overall operation.