What are the factors influencing the selection of a site for a new industry/plant? Explain

What are the factors influencing the selection of a site for a new industry/plant? Explain 
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Factors influencing the selection of a site for new Industry/Plant:

The location of the plant can have a crucial effect on the overall profitability of a Project, and the scope for future expansion. There are a number of factors which should be considered while selecting a suitable site. The basic factors which influence the choice of plant location are;


[1] Proximity to market:

Organization may choose to locate facilities close to their market, not merely to minimize transportation costs, but to provide a better service.


[2] Integration with other parts of the organization:

If the new plant or facility is one of a number owned or operated by a single organization or group, it should be so situated that its work can be integrated with that of the associated units.

[3] Availability of labour and skills:

Certain geographical areas have traditional skills but it is very rare that a location can be found which has appropriately skilled and unskilled labour in the desired proportions or quantities.

[4] Availability of amenities:

A location which provides good external amenities is often more attractive than one which is more remote.

[5] Availability of transport:

It is important that good transport facilities are readily available.

[6] Availability of inputs:

A location near main suppliers will help to reduce cost and permit staff to meet suppliers easily to discuss quality, technical or delivery problems.

[7] Availability of services:

It includes; Gas, Electricity, Water, Drainage, Disposal of waste, Communications etc.

[8] Suitability of land and climate:

The geology of the area needs to be considered, together with the climate conditions.

[9] Regional regulations:

It is important to check at an early stage that the proposed location does not violate any local regulations.

[10] Safety requirements: 

Some production units may present, or may be believed to present, potential dangers to the surrounding neighborhood. Location of such plants in remote areas may be desirable.

[11] Site cost:

As a first charge, the site cost is important, although it is necessary to prevent immediate benefit from jeopardizing long term plans.

[12] Special grants, regional taxes and import/export barriers:

Certain government and local authorities often offer special grants, low-interest loans, low rental or taxes and other inducements in the hope of attracting certain industries to particular locations.

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