Factors of industrial location

1. Factors of industrial location

2. Types of industries • Primary industry • Secondary industry • Tertiary industry • Quaternary industry • In this section, we are only confined with the “manufacturing industry”.

3. Primary industry usually known as handicrafts. • It is estimated that in Asia, Africa, and the Middle East, some 80 - 85 % of the industrial workers are employed in handicraft industry.

4. Manufacturing industry can be seen as ”system”. • Various inputs (factors of production) such as raw material, labour, and power are brought together in the production process from which produce an output -- the product.

8. Frequently, the output of one manufacturing industry becomes input of the raw materials of another. • e.g. steel is used to make car bodies and therefore one of the inputs needed by automobile industry. • It can be divided into heavy industry and light heavy

9. Manufacturing industries can be also divided into: • a.Processing industries : • A material may undergo a change in physical state, chemical composition, volume or mass, in creating a product more useful to man. • e.g. Steel making is one of the example. It change state during process.

10. For reference, can see this site : • http://www.nucor.com • http://www.posco.co.kr

11. Two kinds of processing industry : 1. Initial Processing industries : • A single raw material is converted into a more concentrated or useful form. For example: (1)sugar milling (2)dairy processing (3)fruit and vegetable canning (4)meat packing (5)grain milling (6)brewing and wine making etc.

12. In some cases, the output of the processing factory becomes available for immediate consumption, e.g. butter, cheese, wine, beer and canned fruit. • In other cases, some treatment of mineral ores, the output must pass through other manufacturing for processing before a final product results.

14. 2. Complex processing industries : • Some types of processing involves more than a single raw material inputs. • Raw materials are frequently obtained from several different sources, and often subjected to a series of lengthy and complex processes that involve a high degree of organisation and advanced technology. • In some cases, the complex processing industries may result in a product available for immediate consumption, or the required further processing or fabricating, • e.g. steel making, aluminium production, petroleum refining, sugar refining.

17. b. Fabricating industries : • Fabricating involves a change in the physical form but not the state of the raw materials used. • Fabricating is basically the assembly of finished or semi-finished product from other primary or secondary manufacturing industries • e.g. steel making industry, to produce a finished products.

18. Examples : the manufacture of automobiles, aeroplanes, ships, all other types of machinery, furniture, and clothing are examples of fabricating industries.

19. INDUSTRIAL LANDSCAPE: Some Basic Problems of Industrial Location • Distribution Pattern Not evenly distributed around the earth, with some manufacturing industries typically concentrated in certain localities.

20. The reasons for the Contemporary Pattern of Location And the Cause for Dynamic Change of Location: 1.   differences in scale or level of study: • micro level or firm level – individual firm • meso level – an industrial district • macro level – an industrial area or a whole industry

21. 2.   differences in the types of industry • e.g. light industry such as textiles make strong demands for labour. • Heavy industry such as oil refining and petroleum results little labour but much capital.

22. 3.   differences in special needs: • -  need to be close to other industries • - need to lower transportation costs by cheap sea transport • -  others

23. 4.   differences in the motives of the individual entrepreneur in choosing a location: • some are likely to be motivated by a desire to maximise profits and will take risks in doing so. Other may want simply “satisfactory” profit and safe existence.

24. Despite these diversifying factors of location, there are common requirements to all industrialists: • 1.   the purchase of raw material or semi-processed materials • 2.   the processing or assembling of these raw materials or semi-processed materials whereby value is added to them. • 3.   the sale of the finished products.

25. 4.   the payment of transportation costs involved in the assembly of the raw materials or semi-processed materials and the distribution of the finished products. • 5.   labour supply • 6.   energy resources • 7.   capital

26. II. The Factors affect Industrial Location:

28. 1. Role of Raw Material • The degree of attraction exercised by raw materials varies according to nature of the materials themselves. Raw materials can take many forms: • 1. products from a primary industry, e.g. agriculture, mining, forestry or fishing.

29. 2.    semi-processed (semi-finished) products from an initial processing or complex processing industry, e.g. raw sugar, steel plates. • 3.    semi-processed products from a fabrication industry, e.g. electricity circuits, car engines.

30. In term of spatial distribution, raw materials can be classified into 2 broad types: • 1.  Ubiquitous raw material – which are found practically everywhere, e.g. water, sand, atmospheric gases • 2.  Sporadic or localized raw materials – which are found only at specific sites and are of many types, e.g. coal, petroleum, iron ore, bauxite, rubber.

31. Ubiquitous raw material cannot exert strong locational tie or influence on industrial location as can localised / sporadic raw materials. • Historically, many manufacturing industries had a tendency of locating very close to their raw materials – raw-material oriented.

32. A. If the lose a great deal of weight or bulk during the production process, the factories will be attracted to sources of raw materials because transport cost can be saved. e.g. sugar is only 1/8 of the weight of sugar cane • Goldsmith: one tonne pf raw material produce a few grams of metal. • Alumina refining – which uses about 4 tonnes of bauxite to produce 2 tonnes of alumina.

33. b. If the materials are perishable • e.g. fruits canning, vegetable and food preservation, palm oil refining, meat-packing, they have to locate themselves near their sources of raw. • Initial processing has to be carried out on the site before the raw materials can be sent and arrive in fresh forms at the market.

34. c. High value of raw materials per ton • If material of high value per ton (e.g. wool), then it can bear a heavier cost of transport and plants will be found further away from away from sources of materials. • Materials of low value per unit of weight, e.g. copper ore will attract industries near them.

35. d. Possibility of using substitute materials: • Where materials are substitutable, the pull of any one of them is reduced, e.g. either pig-iron or scrap can be fed into the converter so steel production may not be set up nearer to the iron smeltery.

36. e. Number of materials involved: • Attraction of one material in ONE direction may be counteracted by pull of another in a different direction, e.g. iron and steel industry employs several types of raw materials and location based on access to both coal and iron ore can be found.

37. f. Influence of freight rate: • If the materials are costly or difficult to handle, then raw material supply plays a very important role in location decision.

38. g. hazardous or dangerous materials which require to travel long distance • These may include the generation of nuclear electricity and making of nuclear armaments.

39. A marked decline in the locational pull or attraction of raw materials on industrial location because of: 1.   improvements in transport technology – which allow raw materials to be transported over longer distances at lower costs (cheapening of transportation).

40. 2. advances in production techniques – which allow the same amount of products to be produced forma reduced amount of raw materials. 3. greater attractiveness of the market location. 4.  advantages of agglomeration of manufacturing industries.

41. Examples: • A. Sugar milling (case study)

42. Physical requirements : • 1. alluvial flat land with deep and well-drained soils of volcanic origin. • 2. completely (frost-free) - mean monthly temperatures (should not fall below 18 ℃ for optimum growth. • 3. annual rainfall: 2000mm per annum but it is also necessary to have a slightly dry period (75mm)

43. Processing cane into raw sugar : • crushing the cane to extract juice. (The remaining cane fibber is a dry material called 'bagasse'. This is used as fuel. • cleaning dirt out of juice in settling tanks. • boiling juice twice to form syrup-coated sugar crystals. (糖漿) • spinning off syrup from crystals.

44. 5. A thick syrup, called molasses (糖蜜)is also spun off in this final centrifuging and this is then sent to distilleries to be made into industrial alcohol, rum (酒) 6. It is also sold to farmers for stock feed and fertilizer.

45. Raw material (case study) : 1. Perishability of harvested cane       transshipment must be avoided. 2. Cane, is an extremely bulky, and cumbersome crop of low specific value, i.e. 'value per unit weight is low.

46. For example, an average yield of cane is 84 tonnes per hectare, compared to less than 2.5 tonnes per hectare of wheat and other cereals. • As a result, cane is difficult and costly to be transported.

47. Therefore, the transport system focusing on each mill has to be both fast and capable of handling very large quantities. • Also, it is more economical to keep the haul as short as possible. Thus, mills have to located in the midst of their assigned cane areas.

48. 3. Weight lose material: • Each 7 tonnes of cane brought in from the fields yields only 1 tonne approximately of raw sugar in the milling process. • Thus, the overriding consideration in siting sugar mills is to locate them as close as possible to the fields with efficient bulk transport system

49. B. Copper processing (Case Study) Highly concentrated into a few major mining centres : • a. interior south-western U.S • b. the Ural (烏拉爾)and Caucasus regions of USSR(高加索山脈) • c. Zambia and Zaire in south-central Africa(桑比亞、扎伊爾)

50. d. east-interior Canada • e. central and northern Chile • f. Peru, the Philippines