Location of Project Site ashish juneja

LOCATION OF PROJECT SITE

By: Ashish JunejaMonday, April 10, 2023

1

Need for efficient location

Smooth and efficient functioning Saves cost and enhances productivity Grow, prosper and diversify and provide

quality products

Monday, April 10, 2023

2

When do the need of site arises? When new enterprise is established Expansion, decentralization and

diversification Existing factory is not in position to

obtain approval


3

Steps in enterprise location

Accoding to Bethel, Awater and Smith enterprise location involves three steps:

Selection of region or general area Selection of particular community Selection of exact plant site


4

An example to illustrate the location


5

The project: Company set up a unit for refining waste

oils with installed capacity of 10,500 KL/Ml. the proposed issue is to finance the extension programme to manufacture wax oil, industrial waxes and jellies. After the proposed extension the capacity will increase to 13,500 ML/KL.

An example to illustrate the location (Contd.)


6

Location: The present unit is in Khopoli Maharashtra,

90 km from mumbai. It is “C” category backward area.

The factors favoring location are: Easy availability of raw materials Proximity of potential market Well established road network. Easy availability of power, water, labour and

infra.

An example to illustrate the location (Contd.)


7

Land and building The company is in possession of free hold

land at village honad measuring 10,789 sq. metres.

As on march 31, 1992 the company incurres an expenditure of 55 lakhs towards development of land and infra.

The existing built up area is 1130 sq. meters approx. and built up area after expansion will be 1785 sq. meters and contract awarded to M/S Akcon engineering company.

Production channel of enterprise


8

Selecting a general Area


9

Factors to be considered: Availability of raw materials Availability of skilled and unskilled labour Nearness to the source of motive power Nearness to market Availability of transport facilities Nuisance problems Suitability of climate

Economic size


10

Certiain minimum economic size is to be considered below which the project is not viable

Size varies from industry to industry depending upon nature of product manufactured, complexity of manufacturing process, factors of production, particularly capital and labour.

Processing Unit

The scale of project is examined in keeping in view technological efficiency, cost of production, size of targeted market and capital cost.


11

Project Phasing

Factors which have important bearing on the economic size of the project are the cost structure and availability of infrastructure facilities.

Economic size is carefully analyses by appraising financial institution and it is ensured that project is neither too small or too ambitious.


12

Selection of most economic site According to kimball and Kimbal, the

“most advantageous location si that at which the cost of gathering material and fabricating it plus the cost of distributing the finished product to the consumer will be minimum.”


13

Economic Site

Let A and B represenr the two sources of supply of raw materials. Let C stands for the market place; and let D stands for the site of factory. If the site of the factory is located at the market C, then only the transportation cost of raw materials will have to be paid. Instead, if the factory site is located either at A or B, then only the distribution cost of finished goods is incurred.


14

Economic Site

If the site is located at intermediate point D, then the transportation cost on incoming raw materials and outgoing finished goods will have to be incurred. In order to arrive at the final decision for the most economic site, a comparative statement of total cost is to be prepared for the alternative site.


15

Govt. Regulation on location of units The govt. has eased restrictions on location of

industries and announced guidelines for industrial license applications.

Ministry of industry issued notification that under new industrial policy, industrial licensing exemption to all industries except 18 specified categories.

As per the guideline the proposed project should be located within 25km from the periphery of standard urban area limits of a city with population of more than a million, as per the 1991 Census.


16

Govt. Regulation on location of units (Contd.) If the industrial unit is located in area

designated as “industrial area” by state govt. before July 1991, the restriction of location will not apply.

Industrial units other than electronics, computer software or printing, which are to located outside designated “industrial area” and within 25km limit would require license.

Environment, safety, land use, urban planning and related factors are to be considered for industrial license.


17

Industrial growth centre scheme Scheme was envisaged in 1988 for

establishment of 100 growth centreThe criteria's are: Outside 50 kms. Of cities with population

above 2.5 million Outside 30 kms. Of cities with a population

of above 1.5 million but below 2.5 million. Outside 15kms. Of cities with population

above 0.75 million but below 1.5 million


18

Objectives of industrial growth centre scheme To provide best of the infrastructure facilities

in these growth centres nation wide. The proximity to rail heads, national or state

highway. Access to adequate and dependable sources

of water, power, telecommunications facilities, educational and health facilities and sufficient land for the development of housing and for the promotion of tertiary activities.


19

Environmental problems

Arising from conditions of poverty and underdevelopment.

Arising as negative affects of very process of development


20

Vicious circle of poverty


21

Location policy

In location of cities of other than cities of more than one million population there is no requirement of obtaining industrial approvals from central government.

In respect of cities with population greater than one million, industries other than those of a non polluting nature such as electronics, computer software and printing, may be located outside 35km. Of the periphery of urban areas, except if they are located in designated industrial area, prior to 25.07.1991.


22


23

Documents

Location of Project Site ashish juneja