The document discusses the essential factors in selecting a plant location for maximum operational efficiency, emphasizing economic considerations and potential challenges in relocating an established facility. Key factors include proximity to raw materials, markets, transportation, power availability, labor supply, civic amenities, and government policies. The selection process involves determining the country, region, locality, and exact site for the plant, with specific examples provided for industries such as sugar manufacturing.

2. INTRODUCTION
• Plant location may be understood as the function of
determining where the plant should be located for maximum
operating economy and effectiveness.
• The selection of a place for locating a plant is one of the
problems, perhaps it is one of the task for the entrepreneur
while launching a new enterprise
• Selection of a location is on pure economic considerations will
ensure an easy and regular supply of raw material, labor,
efficient plant layout to reduce cost of production
• Once a mistake is made in locating a plant, it becomes
extremely difficult and costly to correct it.

3. • When the business is newly started.
• existing business has outgrown its original
facilities and expansion not possible.
• The volume of the business or the extent market
necessitates the establishment of branches
• A lease expires and the landlord does not renew
the lease.
• Social and economic reasons i.e., in-adequate
labor supply and shifting of the market.
Need for Plant Location

4. Steps in Location
1. With in the country or outside
2. Selection of the region
3. Selection of the locality or
community
4. Selection of the exact site

5. 1.With in the country or
outside
• The first step in locating a plant is to decide whether the plant
is located domestically of internationally.
• Due to globalization the issue of home or foreign is gaining
more relevance.
• choice of particular country depends on such factors like
political stability, export & import quotas, currency, and
exchange rates .

6. 2: Selection of the region
1. Availability of raw material
2. Nearness to the market
3. Availability of power
4. Transportation facilities
5. Suitability of climate
6. Government policy
7. Competition between states

7. Availability of raw material:-
As a manufacturing unit is engaged in conversion of raw materials in to finished
products, it is very essential that it should be located in a place where the
supply of raw materials is maximum.
Advantages :-
 Reduce in cost of transportation.
 Regular and proper supply of raw material
 Saving in the cost of storage of material
Nearness to the market :-
Since goods are produced for sale, it is very essential that a plant should be
located near to the market.
Advantages :-
 Reduction in cost of transportation of finished goods to the market
 Availability of render prompt services to the consumer
 The ability to adjust production program to suit the likes and dislikes of
consumers.

8. Availability of power :-
Power is essential to move the wheels of an industry. Industries using electricity
have to be located where the supply of power is available more
Example:- Steel industries are located near to power industries
Transport facilities:
 Transport facilities are very important for bringing raw material to the factory.
 Transport facilities are very important for carrying finished goods to the
market.
 place which is well connected by rail, road, air and water transport facilities is
suitable for plant location.
Example :- Mumbai is best suitable for transport facilities to locate industries

9. Suitability of climate:
It is important for two reasons:
1. There are certain industries which mainly depends on nature of
production.
Example :- Humid climate for Cotton textiles and Jute.
2. Based on climate which also affects the labor efficiency
Government policies:-
Government policies like
1. licensing policy
2. Freight rate policy
3. Establishing a unit in the public sector in remote areas
4. Institutional finance and government subsidies
Example :- NANO car projected
Competition between states:-
Various states offer investments, subsidies and sales tax exemptions to
new units.
The incentives may not be big but help to large scale industries but not
for small and medium scale industries.
Example :- Pasco steel company in Orissa

10. 3: Selection of the community
The selection of a locality in a particular region influence following factors :-
1. Availability of labor :-
• Labor is an important factor in the production of goods.
• A sufficiency of labor supply at reasonable wages is very essential for smooth and
successful working of the industries.
• Now a days the influence of skilled labor on plant has lost because of mobility.
2 : Finance and research facilities:
• Adequate capital is essential for the successful working of any organization
• A place where facilities for raising capital are available attracts new industries.
• The manufacturing unit has to be dynamic i.e., it should always be on the look out
for new technology.

11. 3. Civic amenities for workers:-
• Besides of working conditions inside the factory, the
employees need facilities outside it.
• Recreation facilities such as clubs, parks, schools for children
etc. must be provided for the employees.
Example: All facilities provided by BHEL to their employees 4.
4. Availability of water & fire:-
• Some industries require plenty of water for there working.
Example: NHPC power plant which uses water to produce
power
• Some industries require fire for there working.
Example: NTPC power plant which makes fire from coal to
produce power
The selection of a locality in a particular region influence following factors :-
continued….

12. 4: selection of the exact site
1. Soil, size and topography:
For the industries based on agriculture require fertile soil to locate a
plant.
The area of the land should be such as to accommodate not only the
existing purpose but offer for scope for future expansion also.
The topography of the place deserves consideration to some extent. A
hilly rocky and ruff terrain is unsuitable for plant location.
2. Disposal of waste :- The problem of the disposal of waste is
common to many industries, particularly chemical, sugar, steel and
leather industries.
The site selected for location of the plant should have provision for the
disposal of waste.
Example: NTPC use coal ash ( waste ) to construct bricks

13. Plant Location For Sugar mill In India
Highest
Production in
U.P.

14. This Area Have More Production Of
Sugar Cane
Availability Of Raw Material In Lakhimpur ,Sahjahnpur,Sitapur,Khiri ,Balrampur District of
Uttar Pradesh are Maximum..

15. Raw material(Sugarcane)
Transportation-Easy To carry produce at
location of plant
Near to Market For Power Supply
(Produced By Plant(Heatwater)),Sugar, Organic
Fertilizer ,Zyme,Bio product etc
Wastage Management(Near
to canal ,river and High way is
near to exact site

16. Plant Location For Sugar cane Factory