The technical parameters to be included in selecting a site for installing a Textile factory are described in this powerpoint.

1. Bahir Dar University
Ethiopian Institute of Textile and Fashion
Technology
Course Title: Textile Plant Layout and Design
Course Code: Teng 4228
Program: B.Sc. in Textile Engineering
By
Bewuket Teshome (Lecturer)
1

2. Chapter – 1 Textile plant Location
Contents
Introduction to textile industry
Importance of site selection
Principles of Site Selection
General territory
Specific Location
Systematic approach for selecting location

3. Lesson 1
Objectives:
To understand the nature and form of textile industry
To understand the importance of plant location
To know when plant site selection is necessary
To understand the 10 principles of site selection

4. 1. Introduction to Textile Industry
Form
Textile factories can be established as:
• Integrated/composite textile factories
• Spinning mills
• Weaving mills
• Knitting mills and
• Garment factories
• Hand spinning
• Rope making
• Handloom
Present trend?
Organized
sector
Household/cottage

5. Nature of the Industry
Labour: labour intensive (level of technology
medium)
Level of technology: employed can range
anywhere from the most primitive (e.g., throw
shuttle looms) to the most modern (e.g.,
shuttleless looms with electronic jacquards).
In general, as the level of technology is higher,
capital investment is much higher and they tend
to be highly labour saving.

6. Modern spinning and weaving units are highly
energy intensive.
Chemical processing units consume large
quantities of water, chemicals and fuels; they
are also highly polluting.
Garment units are extremely labour intensive
where women workers are employed in very
large numbers.
Developing countries concentrate on this sector
to generate employment.

7. 2. Importance of Site Selection
 Plant location: refers the place where the plant
should be located for maximum operating economy
and effectiveness.
 Site selection for the location of a facility means
long-term commitment.
 A facility once established is very difficult to be
relocated in another advantageous location.
 A plant has to live with all the advantages and
disadvantages, once the site has been selected and
the machinery installed.
 Generally, the approach is to select a site that will
 reduce cost of production
 reduce cost of distribution and
 increase of profits by exploiting locational advantages.

8. Locating a Plant is needed when:
– The business in newly started
–The expansion to the existing plant is not
possible
– A firm wants to establish new branches
– The landlord does not renew the existing lease
– Economic or social reasons like:
- Inadequate power supply
- Government regulations, etc.

9. 3. Principles of Site Selection
3.1. General Territory/Region
a) Government Policy
 keeping the national priorities
 Encouragement is given in terms of
 incentives,
 subsidies,
 tax exemptions (could be critical cost factors in deciding
the viability of a location) and so on.
 Discouragement could be outright denial of
permission for location by municipal/regional
/national authorities.
 It is encouraged to be located in ‘remote’ areas in
order to generate employment, reduce poverty and
initiate industrialisation of a backward area.

10. b) Availability of Raw Material
This is not a major factor.
All over the world, the raw materials are
transported commonly from one end of the
globe to another end.
However, in certain cases the cost of
transportation may be critical.
The availability of cheap raw materials in the
neighbourhood – e.g., cotton, wool – may
improve the attractiveness of a location
marginally (in a small scale).

11. The total land suitable for producing cotton in the country is
3,000,808.75 hectare.
Afar
36%
Amhara
26%
Tigray
15%
S.N.N.P.R
12%
Gambella
7%
BenshangulGumuz
3%
Oromia
1%
Cotton cultivation in Ethiopia

12. c) Proximity to Markets
This is not also a highly relevant factor for textile
industry - except for perhaps products of small
scale industry of local interest.
Textile materials command worldwide market
and like raw materials, they are also transported
over large distances.
Again like raw materials transport costs, may
alter the situation marginally to substantially
(considerable).

14. d) Availability of Labour
 Unskilled
 Semi-skilled
 Skilled
 A large proportion of workers belong to unskilled and semiskilled
(for low/medium technology).
 Most of these workers can be easily trained in-house.
 When sophisticated technologies are used, educated labour
would become necessary.
 Locating industries in urban and semi-urban areas has the
advantages of attracting educated, skilled workers in large
numbers.
 The wages to be paid may be higher in urban and semi-urban
areas.
 When there is an established industry in a given area there is
always a surplus trained labour which is available for new units.
 The initial training expenses and loss of productivity/quality for
new units to be set up in new areas may give up units to be
unviable at least in the short run (in spite of low wages).

16. e) Transport and Communication
Transport should be low in cost and quick in delivery.
In-land transport of goods is generally by road for
short distances and by rail for long distances.
In the case of textiles, almost all of inland transport
is by road in view of quickness and door delivery.
For transport between continents, transport by ship
is carried out.
For very expensive textile items (which are generally
low in weight also), air transport is also resorted to.
Ethiopia to depend of foreign ports which invariably
means long delay and increased costs.
Communication is another important factor for the
location of factories.

17. f) Availability of Power and Fuel
Spinning and weaving sections of the textile
industry are highly energy (particularly electrical)
intensive.
Wet processing industry is in general fuel
(coal/oil) intensive.
Availability of these resources with good quality
is also a critical factor.

18. g) Climatic Conditions
 Spinning and weaving units general require reasonable
amounts of moisture (for spinning around 50 to 60%RH
and for cotton weaving 80 to 85%RH).
 The temperature should also be maintained around 20 to
30 ºC.
 These conditions need to be maintained throughout the
year.
 Without humidification and air conditioning facilities,
maintaining consistent ambient conditions is difficult.
 Nevertheless, the cost of maintaining humidification/air
conditioning facilities is highly influenced by the local
weather conditions.
 Closer the local weather conditions near the desirable
conditions, lower will be the capital and recurring costs.
 Wet processing and garment units are less susceptible to
the environmental conditions.

19. h) Availability of Water
Good quality water in large quantities is essential
for wet processing factories.
For spinning and weaving factories too, a
substantial quantity of water is required for
drinking, hygiene and humidification purposes.

20. i) Ancillary Industries
 Large industrial units provide raw materials to
small units for conversion to finished or semi
finished products to exploit certain
advantages.
 Large processing units can subcontract
conversion of yarn to fabric and finish the cloth
in house.
 The same concept can be extended to knitting,
garment, and hand loom sectors also.
 So factories should have to carefully look into
the presence of ancillary sector.

21. j) Business and Commercial Facilities
Bank facilities for depositing surplus cash,
Sending outstation cheques for collection and
withdrawals,
Working capital limits – all these are essential for
the conduct of modern-day business.

22. 3.2.Selecting the exact plant site [specific location]
The following points are considered:
• The cheap availability of land for current and future
requirements,
• Soil characteristics, availability or possibility of
economic drainage and waste disposal system are
desirable parameters.
• The site should be easily accessible to various modes
of transport as required so that apart from input
materials, employees can also reach the site
conveniently.
• The site should be free from zonal restrictions like
from railways or civil aviation restrictions.

23. Lesson 2:
Objectives
To understand the general steps in systematic
approach during site selection
To understand and exercise the common techniques
in systematic site selection

24. 4. Systematic approach for selecting location
location analysis: Selection process of a site for the
factory.
Some geographical area is selected a particular
site is selected.
All factors has economic and non-economic
implications of short, medium and long-term nature.
All the factors need to be carefully weighed for their
benefits and disadvantages.
These factors need to be evaluated objectively - to the
extent possible in monetary terms.
A location survey must be undertaken based on the
specific requirements of the given enterprise.

25. In making location decisions it is needed to:
• Decide on the criteria
• Identify the important factors
• Develop location alternatives
• Evaluate the alternatives
– Identify general region
– Identify a small number of community alternatives
– Identify site alternatives
• Evaluate and make selection
Common techniques:
1. Locational cost-volume-profit analysis
2. Factor rating
3. Center of gravity method
4. Rate of return

26. output
of
or volume
Quantity
unit
per
cost
Variable
cost
Fixed
FC
where
FC
Cost
Total






Q
v
Q
v
1. Locational Cost-Volume-Profit Analysis
Steps:
– Determine fixed & variable costs for each location
– Plot total cost for each location
– Select location with lowest total cost for expected production volume
Example: Fixed and variable costs for four potential plant locations are
shown below:
Location
Fixed Cost
per Year
Variable Cost
per Unit
A $250,000 $11
B $100,000 $30
C $150,000 $20
D $200,000 $35
Plot of Location Total Costs

27. Range approximations
– B Superior (up to 4,999 units)
– C Superior (>5,000 to 11,111 units)
– A superior (11,112 units and up)
000
,
5
10
000
,
50
30
000
,
100
20
000
,
150
B
of
Cost
Total
C
of
Cost
Total






Q
Q
Q
Q
11
.
111
,
11
9
000
,
100
20
000
,
150
11
000
,
250
C
of
Cost
Total
A
of
Cost
Total






Q
Q
Q
Q

28. 2. Factor Rating Method
• List relevant factors
• Assign importance weight to each factor (0 - 1)
• Develop scale for each factor (1 - 100)
• Develop location alternatives
• Score each location using factor scale
• Multiply scores by weights for each factor & total
• Select location with maximum total score
Sample format
Factors weight Location A Location B Location C
score W*S score W*S score W*S
Raw material
Labor
Water
Transportation
Total

29. 3. Center of Gravity Method
This method Considers:
1. Location of markets
2. Volume of goods shipped to markets
3. Shipping cost ( distance covered)
Steps:
1. Place existing locations in coordinate grid
2. Grid origin and scale is arbitrary
3. Maintain relative distances
4. Calculate (X,Y) coordinates for center of gravity
NB: Cost is directly proportional to distance and volume of goods.

30. ns
destinatio
of
Number
n
destinatio
of
coordinate
n
destinatio
of
coordinate
where







n
i
y
y
i
x
x
n
y
y
n
x
x
i
i
i
i
If quantities to be shipped to
every location are equal:
 the coordinate can be calculated
by finding the average of the x-
coordinates and the average of
the y-coordinates.
When the quantities to be
shipped to every location are
unequal:
 the coordinate obtained by
finding the weighted average of
the x-coordinates and the
average of the y-coordinates.
i
y
y
i
x
x
i
Q
Q
Q
y
y
Q
Q
x
x
i
i
i
i
i
i
i
i
i
n
destinatio
of
coordinate
n
destinatio
of
coordinate
n
destinatio
to
shipped
be
o
Quantity t
where










31. Destination x y
D1 2 2
D2 3 5
D3 5 4
D4 8 5
18 16
4
4
16
5
.
4
4
18








n
y
y
n
x
x
i
i
Here, the center of gravity is (4.5,4). This is slightly west of D3 .
Example1: Find the center of gravity of the following 4 destinations.
a) Map showing destinations b) Coordinate system added c) Center of gravity

32. Example2: Suppose the shipments for the above 4 destinations are not all
equal. Determine the center of gravity based on the following information.
Destination x y
Weekly
Quantity
D1 2 2 800
D2 3 5 900
D3 5 4 200
D4 8 5 100
18 16 2,000
7
.
3
000
,
2
400
,
7
000
,
2
)
100
(
5
)
200
(
4
)
900
(
5
)
800
(
2
05
.
3
000
,
2
100
,
6
000
,
2
)
100
(
8
)
200
(
5
)
900
(
3
)
800
(
2


















i
Q
Q
y
y
Q
Q
x
x
i
i
i
i
i
i
The coordinates for the center of gravity are (3.05, 3.7) = (3.0, 3.7).

33. 4. Rate of return
Many factors considered
The required capital investment,
The unit cost of production and distribution for a
given volume of output
The most advantageous location is the one which
has the highest rate of return.
All Costs can be classified in the following ways
• Total Investment (Land cost, Building cost,
Machineries and equipment cost)
• Total Expenses
• Total Sales

34. Example:
Given Data for Site A & Site B
Site A= 450,000-280,000 x100% = 5.66%
3,000,000
Site B= 375,000-320,000 x 100%= 1.833%
3,000,000
The site A is most advantageous as it gives high rate of return.
Site A Site B
Total investment (fixed
capital)
3,000,000 3,000,000
Total sales 450,000 375,000
Total expense (working
capital)
280,000 320,0000

35. End!!!

36. 2. Comparison of qualitative factors
These are the factors to which cost values can’t be
assigned. Like lack of good schools, community
attitude. These can be termed as good or excellent.
Clearly location B appears to be better one.
factors Location A Location B
labor adequate excellent
relation good Very good
education Good Very good

37. Ranking & weight method
1. Various locations are ranked acc. To their contribution
2. Various factors are assigned weights acc. To their
importance
3. Weights are then multiplied with rank assigned
4. Total of these products for each location is calculated
5. Location having max. total is then selected.

38. Example
Criterion Weighting
Possible Factory Location
A B C D E
PROXIMITY
TO:
Skilled labour 7 2 14 3 21 0 0 1 7 4 28
A pool of unskilled labour 8 5 40 2 16 0 0 4 32 2 16
A motorway 7 3 21 2 14 1 7 3 21 4 28
An airport 4 1 4 3 12 4 16 2 8 2 8
The sea / a river 0 2 0 5 0 5 0 2 0 1 0
Housing 5 4 20 3 15 0 0 3 15 4 20
Amenities 5 3 15 2 10 0 0 2 10 3 15
Potential for expansion 7 2 14 1 7 5 35 3 21 2 14
Availability of grants/incentives 8 1 8 2 16 5 40 1 8 3 24
Safety 2 3 6 2 4 5 10 2 4 2 4
Planning constraints 5 2 10 3 15 5 25 4 20 2 10
Environmental impact 4 3 12 2 8 4 16 1 4 2 8
TOTAL 164 138 149 150 175