Module 2. Location and site selection for dairy plants

Lesson 6

6.1 Introduction

Location and site selection for dairy plants forms the important first step in plant design and layout. It has a bearing on the profitability of the dairy and initial quality of the milk. The step is further an important one as any mistake here cannot be corrected easily. The size and operation of the plant also gets restricted if the decision is not made properly at this stage.

6.2 Selection of Location

The problem of selecting a location for a dairy plant has been given considerable thought by many authorities. Selecting a location involves large commitments of capital, as a result it must be done with the utmost care. The problem involves selecting a region as well as specific site within that region. The most difficult part of a plant location analysis is determining the criteria by which various location alternatives can be evaluated.

As the dairy plant construction involves a very large initial capital investment, numerous considerations must be evaluated at the very beginning in the planning of a new plant. Out of these, the location and site selection requires utmost care as it forms a large single capital investment. It involves selecting a region as well as a specific site within the region, of which the most difficult part is determining the criteria by which various location alternatives can be evaluated.

Location is a strategic issue, and the decision where to locate cannot be taken lightly. It is the first decision in the implementation of a project. Upon the decision to proceed, an investment is made which is irreversible. That investment in bricks and mortar cannot physically be transferred to another location if the decision turns out to be wrong. The most favourable location is one, which attains the lowest unit cost in producing and distributing the product or service to consumers.

Traditionally, a location was selected for reasons of economic geography like,

1. Proximity to raw material source

2. Proximity to relatively cheap and abundant energy

3. Availability of relatively inexpensive manpower or specialist skills

4. Proximity or good transport links with materials suppliers and markets.

But nowadays, the location decision has become more complex with newer intervening factors like more sophisticated markets, increased competition, short supply of skills, technological change that soon outdate newly installed processes, shooting costs of land and materials, government influences, legal requirements, corporate matters and peoples’ influences. In general, in selecting an area to locate a plant, following consideration should be given to the following factors

1. Availability of spacious land for immediate requirements of all buildings, roads, service facilities, garden, tree plantation for wind break etc., with provision of land for expansion at a future date

2. Accessibility and availability of raw materials

3. Accessibility of market

4. Adequacy & availability of labour

5. Adequacy of transportation facilities

6. Volume of power and fuel

7. Water supply and its quality

8. Soil conditions for heavy loading

9. Site cost

10. Elevation in location to facilitate removal of dairy effluent, suitable treatment and disposal

11. Climatic conditions, including direction of prevailing wind and probable increase in dust and smoke nuisance from the surroundings, and

12. Government laws

13. Market Potential

14. Clean environment

The two terms location and site are often confused with each other. It must be clearly understood that, the term ‘location’ implies to Area, Region or Territory, while ‘site’ is the place, within a selected location, where building is to be constructed.

6.3 Plant Location

Location is primarily influenced by the nature of the product manufactured. The general location and the specific site should be selected with the aim of attaining as nearly as possible the ideal over-all economic situation for the particular enterprise, may it be a fluid milk plant or milk product dairy. The most favourable location is one, that attains the lowest unit cost in producing and distributing the produce or service to consumers.

6.3.1 Differences between location and site

The two terms location and site are often confused with each other. It must be clearly understood, that, the term ‘Location’ implies to Area Region or Territory, while site is the place, where building is to be constructed.

6.3.2 Location problem

Location problem has to be solved at two levels, first Territory or Region level and second site level. Some location factors may be applicable to both the levels. Still region level and site level are to be given specific consideration.

6.3.3 Types of location

Three types of locations are possible for dairy plants viz. i) city location ii) suburban location and iii) country location. City location

When a city is planned by a town planner, all areas are marked for future buildings. The industries likely to come up are marked in area called ‘Industrial area’ and usually dairy plants are allotted a plot in that area only. Dairy plant in the neighbourhood of other industry or factories emitting smoke, dust, offensive smell, gases, carries great risk. It is therefore essential, that the location marked for milk plant should be free from all pollution. Suburban location

Suburban location means suburban town or outer skirts of large city. The dairy plant located in this situation has advantages of being close to consumption area with possibility of availing all facilities such as electricity, water, waste disposal and labour etc. Country location

Country location means siting dairy plant in country or milk producing area. There will be little competition from other industries and land will be cheap. The plant will not create a noise problem and it is unlikely that atmospheric pollution will cause any difficulty. There will be no traffic congestion. Milk supply routes will be short. But it will be away from the city consumption area.

For all the dairy plants in whatever region they are, there are some important points which are common and essential to be considered in determining the location. Moreover there are some problem factors applicable to both region level and site level. The former is covered in the subsequent chapters while latter is given in the Table. 6.1.

Table 6.1 Problems related to regional location/plant site factors


Last modified: Thursday, 4 October 2012, 6:42 AM