Plant Location: Textbook P.

Timmerhous
page. 91-96
1. Raw materials availability
2. Markets
3. Energy availability
4. Climate conditions
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
12. Community factors
 Plant Location

The geographical location of any industrial plant

has strong influence on the success of the
project. 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 operators as well
as the surrounding community, are also
important.
 Plant Location

Dr. Vishweshwarya says that decision of

plant location is based on 10 M’s, viz:-
– Man, • Market,
– Money, • Motive,
– Material, • Means of
– Means of Power, Communication,
– Momentum to • Management,
early start. • Machinery,
 Factors for choice of
Plant Location.
11. Easy start up.
12. Past records.
13. Personal factors.
 Plant Location
1. Raw Material Availability

• One of the most important factors

• If large volumes of raw material is to be consumed, --------

• Factors Involved:
– Purchased price of raw material
– Distance from source of supply
– Transportation expenses
– Availability of
– Ease of access to raw materials
– Characteristics of raw material
– Storage requirements

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 Plant Location
2. Markets

• One of the major factors

• Factors Involved:
– Cost of product after considering (Products
distribution, time required for shipping, taxes, etc)
– Local vs. international buyers
– By- products
– Type of product

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 Plant Location
3. Energy Availability

• Electricity, fuel, steam, etc.

• Cost of the above energy sources

• Ease of access to energy source

• Cost determines whether energy to be

purchased or generated

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 Plant Location
4. Climate

• Cold climate
– Need extra heating (for process, building, etc)
– May need protective shelters
– More in-house activities
– Quality of workers
– Extra salaries

• Hot climate
– Need air conditioning

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 Plant Location
5. Transportation

• Common means of transportation:

– Water (Cheapest)
– Railways
– Highways (Trucks, etc) [The most expensive]

• Other transportation methods

– Pipelines
– Air transportation

9
 Plant Location
5. Transportation

400-tonne trucks are used to transport the oil sands

10
 Plant Location
6. Water Supply & 7. Waste Disposal
11

Water Supply Waste Disposal

• Chemical industries • Type of waste
consumes large
amounts of water: • Consider current and future
– Cooling, Washing disposal regulations
– Steam generation
– etc

• Sources:
– Rivers, Lakes, Wells
– Sea water ? ????
 Plant Location
8. Labor Supply

• Workers availability

• Training, scholarships, etc

• Pay Scale

• Restrictions on hours of work per week

• Skills and productivity (MS word, spread sheeting,

willing to learn, etc)
12
 Plant Location
9. Taxation and legal restrictions

• Amount of tax

• Legal restrictions
– Restrictions on importing
– Restrictions on exporting

13
 Plant Location
10. Site Characteristics
14

• Topography of the land

• Soil structure

• Cost of land

• Space for future expansion

• Corrosion effect on plant equipments

 Plant Location
11. Natural disasters & 12. Community Factors
15

Natural disasters and fire

protection Community Factors
• Floods • Local communities

• Hurricanes • Housing

• Earthquakes • Schools

• Fire hazard (forest is close • Hospitals

by, etc) • Recreational activities

• etc
 Perth to:
Banbury 175 km
Karratha Kalgorlie 600 km
Karratha 1450 km
Sydney 4200 km

Possible regions:
1. Perth Metropolitan
Geraldton Kalgoorlie South Fremantle
Kwinana
Perth Viveash
Jandakot
Banbury Canning Vale
2. Country District:
1. Banbury
2. Karratha
3. Geraldton
 Perth Metropolitan
Kwinana Viveash
Advantages Disadvantages Advantages Disadvantages
Accessible by road Crowded city Ready accessible by No port nearby
Seawater available Strong opposition road
for cooling from community Seawater available Close to residential
Water supply Explosion risk for cooling area
available Water supply Strong opposition
Natural gas Extensive site available from community
available preparation Natural gas
Close to KNR available

Labor available Labor availability

Not close to
residential area Possible
Possible
 Perth Metropolitan
Canning vale
Advantages Disadvantages • Possible (weak)
Accessible by road Lack cooling water
Natural gas No port facility
available
Water supply
available
Potential market
for excess steam
Community o.k.
Labor available
 Country District
Karratha Geraldton
Advantages Disadvantages Advantages Disadvantages
Port facility High labor cost Port facility Labor problem
Close to the market Poor labor Cheap land Labor availability
availability
Natural gas Large engineering
available cost

Conclusion
Conclusion
Unattractive Site
Unattractive Site
 Country District
Banbury
Advantages Disadvantages
Port facility Added
transportation cost
Road and rail road Poor labor
available availability Conclusion
Natural gas Large engineering Attractive Site
available cost
Available cooling
water
Labor available
No objection from
community
Far from residential
area