Industrial Location factors

1. Power supply
Cheap power supply .
Water , wind , coal , gas and electricity are the chief source power .
Location of source depends upon the technological innovation ---- like during the
nineteenth century nearness to coalfields became the principal locating influence on the setting up of
new industries , particularly heavy industries . with the introduction of other source of power like
electricity gas , oil etc the power factors became more flexible leading to dispersal and
decentralization of industries .
2. Communications including transport and communications
An efficient transportation service is vital to the product to the consumer ( eg. Rail , water , road).
Ships are cheaper and more efficient for bulk industries
3. Labour supply
- Highly skilled labours are important ( near universities and colleges )
- Availability and cost are important
- Low cost labour
- Developing nations have taken away cheap labour.
- The introduction of an industry towards labour depends on the ratio of labour cost to the total cost of
production which weber calls Labor cost of Index.
4. Access to market where the goods are sold
 A company that is close to the consumer population
- Reduced cost
- Ensures rapid delivery
A company will not locate near its markets in two cases.
- When the market spans over a large area
- Location is more important

5. Grants and financial incentives usually from governments

Financial incentives like tax breaks, tax holidays.
Soft loan from govt. of particular region.
6. Raw materials
Materials that are important to the business must be located near the source.
Wherever ore is, the copper plant must be nearby.
Eg. A potato processing plant must be close to a potato farm.
7. Site and services
Existence of public utility services
Cheapness of the value of the site
Amenities related to a particular site like level of ground
The nature of vegetation and location of allied activities influences the location of an industry to a
certain extent .
8. Finances
 9. Natural and climatic considerations
Climate consideration for certain industries like hot or cold
Various incentives are provided for backward areas and loan , supply of power at cheaper rates and
educational and training facilities .
10. Personal Factors
11. Strategic considerations
In modern times, strategic considerations are playing a vital role in determining industrial location. During war-
time a safe location is assuming special significance. This is because in times of war the main targets of air
attacks would be armament and ammunition factories and industries supplying other commodities which are
required for war. The Russian experience during the Second World War provides and interesting example.
12. External economics
13. Miscellaneous economics
14. Governments
Direct government encourages investment by offering advantages
- Low taxes , cheap land.
Indirect improving infrastructure that will attract business
- Eg. A new fast highway for a business to be located .

Cotton and Textile industry

Important locations ------ Osaka , Manchester , Lancashire , Mumbai , Ahmadabad.
Cotton as raw material = lightweight + non perishable

Cotton to yarn textile = almost no weight loss.

Proximity to raw material non essential, does not offer great cost saving in transportation (unlike sugar, steel
or steel industry)

Other factors become more important in industrial location

1. Nearness to market
2. Nearness to water body (for dying and bleaching )
3. Energy to run power looms and textiles and machines
4. Cheap labor supply
5. Availability of capital/finance

Climate as factor

In dry climate , the cotton threads will break quickly during spinning . machine halts you have to join the
threads again to restart the operation = not good for mass production.

Humid climate suitable thread will rarely break --- so coastal areas are setup near coastal areas (eg
Mumbai , Osaka , Lancashire )

With the advent of humidifier that can artificially increase the moisture in factory = so now days you can setup
anywhere and run it efficiently .
 Textile Biz: India vs Japan

Mumbai Osaka, Japan

nickname Cottonopolis of India Manchester of Japan

black soil of Maharashtra good for cotton (short, Black lava soil=good for cotton cultivation but not
Raw medium staple) sufficient to meet the demand.
material port location= easy to import long-staple cotton from Osaka=port location, majority of production done
Egypt, foreign textile machinery. with imported cotton from India, Egypt etc.

Climate Location near sea=humid climate = threads dont break

from Tata hydroelectric grid in Western ghat

Power Hydel power station near Osaka

Transport Mumbai=well connected via rail, road, airways, seaways. Osaka=Sea port + important railway junction.

Water Mithi river=Soft water for dyeing, bleaching. Yodo river

During American Civil War capitalists of Mumbai

earned big profit by exporting cotton. This money was
used to establish textile mills.
Capital Available from both government and private sector.
Today, Mumbai has good facilities for banking-
finance.

Skilled, but not abundant.

High production using latest machines and
Labour Cheap, Abundant, skilled
automation technology.
 Local market + export by sea to Australia, US. + Japan
Market Mumbai and India=large population =vast market also uses petro-refinery byproducts for
mfg. synthetic fibers.

Textile Biz. Gujarat vs Tamilnadu

factor Ahmedabad Coimbatore

same + cotton variety known as Cambodia

Raw material Available from nearby districts.
cotton is grown.

Energy Thermal power plant near Sabarmati Pykara Hydel project

Water for dyeing, cleaning,

Sabarmati, Khari river Noyyal river
bleaching

Large market in Gujarat and neighboring

Market states
Large demand in Southern States+ Chennai
proximity to Mumbai port=yarn also
port for export
exported to Japan

In the 80s most of the mills fell sick and slowed down and moved to the Surat and Khambhat region.
Manchester and Lancashire industry

Port = Import export

Coastal area = thread dont break

rise of Cotton Industry in Britain

Climate moist Westerlies =humidity=threads dont break

Raw
Cheap Cotton from its colonies (India, Egypt).
Material

Liverpool port
Transport
Later Manchester Ship Canal was developed to turn Manchester itself into a port.

Water Streams from Pennine hills=soft water for dying bleaching.

In the initial phase of Industrial revolution, same water was used as source of energy for running Arkwrights
spinning machine.
Energy
later, coal utilized from Northern England and Wales

By 1600 production of a fabric called fustian started in England.

Labor
Fustian makers settled in this region because humidity helps in cotton spinning.

Market Demand in Europe + Lancashire faces American ports.

Decline of British cotton Business
Loss of colonies = loss of dirt cheap cotton supply
20th century = British industry faces competition from Hong Kong ,japan and other parts of Asia .
Former British colonies also started using those cheaper clothes = no large order to British
industry.

Business moving towards coastal areas for better opportunities in shipbuilding, marine
engineering, soap, heavy chemicals industries.

Hence, Textile industry fading away, old factories are refitted for production of light-engineering
items. (Reason? = industrial inertia)

American cotton industries

 Two important regions

New England region Cotton belt in south

North Carolina, South Carolina ,Georgia, Alabama,

6 States located in the North East corner of US
Mississippi. Include parts of Texas and California.

large cotton growing areas: US cotton belt is

Proximity to Boston and New York= ports and domestic market.
1200+kms broad and 4000+kms wide.

slave labor during colonial era helped in growth.

immigrant workers Today farming is mechanized=lack of labor
doesnt create much problem.

hydroelectric power along major rivers (e.g.

coal from Appalachian region
Tennessee)

Vast land provides more room for expansion.

The New England factories little room for expansion due to mountains.
Today New England industry is concerned mainly with high-end
specialized fashion products for New York etc. While Southern Mills
produce garments for masses.
(and use easy use of large machineries on
farmland)
Southern state also had pulp mills for production
of rayon= growth of both cotton+synthetic
industry.

Chinese Textiles Industry

 Port city = humid = no thread breaking
Raw material = Yangtze Kiang Delta = good for cotton cultivation
Transport = port city + good rail road connectivity + Inland water transport through Yangtze
river
Water + energy = Yangtze river
Very cheap labor available
Market = Kobe , Taiwan , S. Korea : all located within 1000 nautical miles .
Market within china : Nantong , Wuhan , Chongquing etc. connected via Yangtze
river .

Apart from Shanghai textile industry is also found in other areas around Hwang ho valley ,
Sichuan , Beijing , Nanjing due to cheap labor availability and strong domestic demand .
Natural gas refining

Natural gas compared to petroleum:

Pros :
1. Cheaper
2. Burns clean
3. Does not require extensive refining .
Cons :
1. Storage and distribution is difficult
2. Building and maintaining pipelines is expensive and there can be security concern.
1+2 = export problematic .
3. Once the pipeline is laid its size /capacity cannot be increased .
4. Leakage detection is difficult in case of underground pipelines.
5. If market buyers are not found then gas is wasted by burning .
6. Therefore it is economical to mine gas near market areas / only if pipeline is established .

Note : US was the first country to build comprehensive pipeline network for Natural gas .
 International Pipeline Projects
1. Iran Pakistan India (IPI pipeline )
2. Myanmar Bangladesh India ( read more about this Project)
3. Turkmenistan Afghanistan Pakistan India (TAPI)

ONGC Hazira ,Gujrat

Input Natural gas from Bombay High
Removal of Sulphur impurity from the (sour) Natural Gas and send it to other regions via pipeline
(sweetening of the gas )
Output sweet natural gas is used in
1. LPG Cylinders
2. Nitrogen based Cylinders
3. Household via pipeline as cooking gas .
Labor Not the deciding factor because skilled labor = mobile and is accommodated I the
township.
Transport Hajira Bijaipur Jagdishpur (HBJ) passes through Gujrat , MP , Rajasthan ,UP ,Delhi
and Haryana = all big markets are connected through pipeline network.
Reliance KG basin
Refining in Kakinada Andhra Pradesh.

Gas from Offshore block in Krishna Godavari basin.

Onshore gas terminal @ Gadimoga , about 30 km south of Kakinada in the state of Andhra Pradesh.

Transport = East-west gas pipeline transports gas from Kakinada , the landfall point of KG-D6 gas , to Baruch
(Gujrat) and traverses through Andhra Pradesh, Karnataka , Maharashtra and Gujrat.

From baruch they use the pipeline network of Gujrat state Petronet to take the gas to end consumers as well
as connect to Hazira Bijaipur Jagdishpur (HBJ) pipeline.

Through this entire pipeline network gas reaches to fertilizers plant eg. TATA chemicals (Mumbai), Rashtriya
chemicals and fertilizers (trombay) ,IFFCO (phulpur) ,GSFC (Vadodra), Kribhco etc .