Module 2. Location and site selection for dairy plants
Lesson 7

7.1 Introduction

The location of the fluid milk and product plant differ in more ways than one. The fluid milk plant has the requirement of disposing the milk in retail containers or packets, at refrigerated condition to consumer on day to day basis. On the contrast, milk powder factory has to dispose product at room temperature itself, and not on daily basis. The wide variation in the scale and method of disposal of the products does have a bearing on the location. For example cheese manufacturing needs cow milk. Hence the location of cheese factory should preferably be in cow milk producing area.


A market milk plant that handles only fluid milk should preferably be located in a city or its outskirts due to the following reasons:

1. Nowadays good transport facilities are available, that connect the country milk shed areas to the cities

2. Even after pasteurization, milk has got a lower shelf life when compared to other products, hence it should be disposed as soon as possible

3. Bulk transport of pasteurized milk can increase the chances of contamination

4. If glass bottles are used which are to be returned for re-use, location near the market will reduce the costs

5. Increased advertising value of the plant, when it is near the market

Usually space is allotted for dairy plants in the industrial areas; hence environmental aspects are to be considered as Industrial areas tend to be highly polluted. Preferably the plant should be located on a side road to a major road, because

1. Easy access to the major road

2. Pollution, noise and dust of major road avoided

3. Traffic blocks won’t create a problem at the gate for incoming and outgoing vehicles

7.2 Location and Site Selection for Dairy Plants

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.

7.3 Location of Milk Products Plant

The location of milk product plant is decided based on milk product consumption, availability of milk, and other services required. It is advantageous to locate manufacturing plant close to areas where surplus milk is available after meeting the daily requirement of liquid milk. The activities of milk product manufacturing should be centralized to get advantage of economic handling of both fluid milk, seasonal surplus milk and milk products with a better management control.

A few points mentioned below will help in determining the location milk product of plant:

(i) The plant should be located at a place where transportation facilities are available, such as railway siding or near highway. It should be noted that, suitable site would always provide easy transport of raw material to the plant and disposal of finished products.

(ii) To avoid contamination, the bulk transport of pasteurized milk should be discouraged. If pasteurized milk is to be distributed in glass bottles or small containers which are to be returned for reuse, the dairy should be situated close to consumption area. For any reason, if dairy is situated far away from consumption area, it is necessary to transport bottled milk in large quantity to local depots equipped with cold storage facilities.

(iii) Advertising value also affects the location of the plant. For instance a plant installed by the side of a heavily traveled highway naturally commands good sales.

(iv) Location of building should be such, that, all necessary services e.g. electricity, water, waste disposal are available at reasonable cost.

(v) The site must be large enough and of suitable shape to give freedom in planning the building and to allow space for future expansion.

(vi) The area should be free from atmospheric pollution.

(vii) Adequate labour must be available at site and it may be necessary to provide housing facilities to workers.

(viii) Traffic congestion around the plant should always be avoided. Larger plant will require more land for smooth control of traffic pattern.

For any entrepreneur desirous of setting up a dairy industry, it is advisable to go through the following check list on ‘Location’ to assess its suitability. A milk product plant can be located preferably in a village location due to the following reasons;

1. Proximity to the milk shed, reduced transportation cost for raw material

2. Increased shelf life of the product when compared to the raw material

3. Availability of cheap land and labour

4. Reduced noise and pollution

5. In many cases the volume of the final product is less than the milk used, hence reduction in transport and handling cost eg: Cheese, Butter

6. Solid products can be transported in trucks

7. Some products doesn’t even require cold-storage

Last modified: Wednesday, 26 September 2012, 9:56 AM