Factors to consider when locating an industry

  

Date Posted: 5/9/2012 6:32:03 AM

Posted By: rodriguez mwalenga  Membership Level: Silver  Total Points: 110

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* Nearness to raw materials
One of the factors to consider in determining where to locate an industry is the closeness to the source of raw materials. In cases where raw material is heavy but loses weight in manufacture, it will be advantageous to locate the industry near the source of the raw material. This is the case with cement and soda ash industries. Similarly, this will be the case where the raw material is bulky and reduces in size on manufacture. This applies to the sugar and paper industries. In all these cases it is cheaper to transport the final product than the raw material. Perishability of the raw material is also an important consideration when locating an industry. If the raw material is highly perishable, the industry should be located near the source. This would be the case with fruit canning, fish processing and milk processing.

* Nearness to market
The market for the final is a major consideration when deciding where locate an industry. If the product is heavy or bulky as compared to raw material, the industry should be located near the market. This is because it is more expensive to transport the final product. Examples of industries that should be located near the market are furniture, beer, soft drinks and motor assembly. Another reason for deciding to locate an industry near the market is the perishability of the final product. If the product is highly perishable, as is the case with bread and cooked food, the industry should be located near the market. Industries that deal with direct services, such as hair-dressing, medical care, legal services, etc, should be located near the market. These services must be provided directly to the consumer, and hence the need to be near the market.

* Nearness to power
It is not possible to

develop industries without power. Power can be obtained from different sources, e. g. hydro-electric dams, geothermal energy, fossil fuels, natural fuels, solar energy and wood fuel. Industries tend to be located where there is power. The power should be cheap, reliable and appropriate. Some sources of power have been declining in importance, e. g. coal and wood fuel. Electricity, on the other hand, has become very important and can be transmitted to far away places. This makes it ideal as a source of power.

* Availability of labour
The availability of labour is an essential requirement for any economic activity. Where an industry is dependent on a particular type of labour, local supply of such type of labour will exert a great influence upon the location of the industry. However, labour as a factor of production is geographically mobile and can move to where an industry is located. But for very specialized type of labour, the industry should be located where there is an already existing pool of such labour. This will minimize costs of having to induce labour to move to less attractive locations.

* Existence of appropriate infrastructure

* Location of other related industries

* Government policy

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