 Where will the project or plant be built?

 How much land and how many buildings will

be needed?
 How will the process equipment be laid out?
 How will the plant be connected to offsites
and storage areas?

© 2012 G.P. Towler / UOP. For educational use in conjunction with

Towler & Sinnott Chemical Engineering Design only. Do not copy
 Exercise: What factors do companies consider when
deciding where to build a new plant?

© 2012 G.P. Towler / UOP. For educational use in conjunction with

Towler & Sinnott Chemical Engineering Design only. Do not copy
 Tax regime Resource availability
(Water, land, fuel, power)

Raw materials
availability
Availability of
skilled labor

Cost of labor
(and other fixed costs) Political and strategic
Nearness to factors
markets
Transport facilities
(Roads, ports, rail, pipelines) Environmental impact

Not all trade-offs will be captured by economic

analysis!
© 2012 G.P. Towler / UOP. For educational use in conjunction with
Towler & Sinnott Chemical Engineering Design only. Do not copy
 Marketing Strategy
 Cost of Doing Business
 Growth
 Depletion of Resources

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 Strategic Importance of location decisions
◦ Long term commitment/costs
◦ Impact on investments, revenues, and
operations
◦ Supply chains
 Objectives of location decisions
◦ Profit potential
◦ No single location may be better than others
◦ Identify several locations from which to choose
 Location Options
◦ Expand existing facilities
◦ Add new facilities
◦ Move

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 Decide on the criteria
 Identify the important factors
 Develop location alternatives
 Evaluate the alternatives
◦ Identify general region
◦ Identify a small number of community alternatives
◦ Identify site alternatives
 Evaluate and make selection

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 Raw material availability
 Markets
 Energy availability
 Climate
 Transportation facilities
 Water supply
 Waste disposal
 Labor supply
 Taxation & legal restriction
 Site characteristics
 Flood & fire protection
 Community factors

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 Community
Regional Factors Considerations

Multiple Plant Site-related

Strategies Factors

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 Location of raw materials
 Location of markets
 Labor factors
 Climate and taxes

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 Quality of life
 Services
 Attitudes
 Taxes
 Environmental regulations
 Utilities
 Developer support

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 Land
 Transportation
 Environmental
 Legal

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 Product plant strategy
 Market area plant strategy
 Process plant strategy

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 Manufacturers – cost focused
 Service and retail – revenue focused
◦ Traffic volume and convenience most important
◦ Demographics
 Age
 Income
 Education
◦ Location, location, location
◦ Good transportation
◦ Customer safety

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