Site/Physical Cost Factors

Three major factors of site (physical location) 1. Proximity to raw material. Heavier & bulkier the raw material the closer the industry will be located to reduce transportation costs.

resource oriented industry

industries that are located close to the resource because it is to heavy/bulky to transport; communities frequently spring up around resource industries. Labrador City, Churchill Falls, Grand Falls-Windsor and Bonavista are good examples. Can you think of other examples?

2. Land: price, level, good drainages, dense well-settled soil 3. Energy: not as important a factor today due to our ability to transport power long distances. Human-based Cost Factors

Market Oriented Industry

o

Industries that are located close to the market because the product is expensive to transport. The resources are not bulky or expensive to transport. The Soft drink industry is a good example.

Market vs. Resource Oriented Industries:

o

As we examine the influence of weight gain & weight loss on the location of industry we see that if the product weight is greater (weight gain) than the input resources it is located near market. Conversely if product weight is less (weight loss) than the input resources it is located near resource.

Agglomerating Tendency
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Agglomerating tendency refers to the tendency for factories producing related products to locate close to each other for mutual benefit. Ex. Car factory & tire factory. How does each benefit by being located close to each other?

Industrial Parks
o

Industrial parks provide many advantages for a business. Existing infrastructure of roads, on ramps and off ramps to highways, large lots, sewer, ample electricity, and close location to related industries make industrial parks attractive for manufacturing businesses.

Labor force characteristics that attract business

1.

Wages expected: lower wages in some developing countries like Mexico, and the Philippines attract manufacturers Training: highly skilled labourers can attract businesses that require welders, mechanics, carpenters etc. Benefits (EI, Pensions etc); lower costs of employment insurance, pensions , etc. can attract business just as easily as low wages. Availability; a high unemployment rate might attract business, especially if large numbers of workers are required.

2.

3.

4.

Government Influence

Transportation subsidies affect the location of industry.

o o

Subsidies allow businesses to locate farther from the resourse. Subsidies allow governments to encourage industry in rural areas. Examples:

ice breakers in Botwood; roads in Labrador; cost of coastal transportation in Labrador; cost of crossing the Gulf.

Tax breaks affect the location of Industry.

Provinces like Newfoundland have attempted to attract business by offering tax breaks. The company obtains a financial break while the province gets the advantage of putting people to work.

BUSINESS COURSE ASSIGNMENT FACTORS AFFECTING LOCATION OF A CAR MANUFACTURING INDUSTRY Location: Sao Paulo in Brazil Sao Paulo is a perfect location for a car manufacturing industry. It is situated on the coast of Brazil, and is near by to local resources. The many reasons to why I have chosen Sao Paulo and why it is suitable for a car Manufacturing site are: 1. There is good access to large amounts of cheap land 2. There is access to cheap labour; Mexican immigrants and local Brazilians 3.Near natural resources; large iron and steel industry The Amazon forest which supplies many resources , manganese, nickel, timber, phosphates, platinum, tin, uranium, petroleum 4.Good transport links; the Amazon River and the coast of the Atlantic Ocean
5.

Good communications; railroads in total are 28,828km, highways in total are

1,448,000km, and 3,031 airports, including inland waterways, pipelines, ports, and merchant marines
6. 7.

Near a large market; the US market Near suppliers in the area; who supply rubber, good for cars And most car manufacturing Near an open economy; the USA, so its easy to import materials required. Good quality and cheap telecommunications; good system; extensive microwave radio

plants are located in Sao Paulo, and are subsidiaries of major foreign companies.
8. 9.

relay facilities; 9.86 million telephones; broadcast stations; Atlantic ocean INTELSAT earth stations and 64 domestic satellite earth stations
10.

Government support, the Brazilian government places high taxes on imported vehicles Near a commercial centre Good environment for living conditions, so workers can be close by. Good schools,

and gives incentives to manufactures who would build them in Brazil.

11. 12.

hospitals, housing, markets, entertainment and good access to facilities The above reasons show that Sao Paulo in Brazil is a good site to set up a car manufacturing industry, the factors which

affect the location of the industry there are very good and attractive to new manufacturing companies. FACTORS AFFECTING THE LOCATION OF TEXTILE PRODUCER Location: Lagos, Nigeria 1. Access to cheap labour and skilled labour 2. Access to cheap land 3. Local minerals and resources near by, including gold and oil 4. Located on the coast, with a very large port, import and export easily and cheaply 5. Communication is very good, the port is deep enough to hold very large ships, which carry large heavy containers, they can come right up to the port because its deep enough, therefore its cheaper and easier to unload cargo and import resources and export the textiles 6. Near by to good transport, near railroads, local roads and highways, airports; international as well as local 7. The area is a very large market itself. Demand is high and consumers are close by, they come into the city and buy stock, and some take it abroad themselves, because it is so easy and cheap to transport 8. Oil is a huge resource, making transport very cheap and easy for consumers and producers 9. Lagos is better then the other areas in Nigeria, because it the main commercial and financial centre of the country, and people are always coming in and out for business, so it is a very good business and trade centre, with a highly skilled labour force 10. Good access to many links to the rest of Africa and the rest of the world. Near by to the North west of Nigeria, which commercially is considered as the centre of Africa 11. Textiles is a very large and successful industry in Nigeria, there is a small area in Lagos where they sell textiles and on average make around 1 billion nairas a day, which is equivalent to around $100 million

12. Near a large international financial centre, its easy to get loans and set up the business 13. The government can be very supportive, licences are easy to obtain and foreign companies are treated as local producers, as long as money is available, anything is possible 14. There is political and economic stability 15. There is a nice environment to live in, good international schools, hospitals, many international restaurants, good entertainment, good housing and good access to facilities 16. English is spoken as the first language 17. Telecommunications are very good and improving, there are mobile phones and soon a GSM network, satellite stations, computer networks, emails, faxes, Internet and radio stations 18. The country is fully equipped since the British colonisation, since it was them who helped develop the country From the above factors, we can see how good and convenient of a location Lagos, Nigeria is to set up a textile manufacturing industry. It would easy and relatively cheap, with many advantages and links and accesses to the rest of the world. I believe a producer would benefit greatly from setting up a textile industry in Lagos, Nigeria, and would make great profit, gains would be much higher than losses. FACTORS AFFECTING THE LOCATION OF A TOURIST HOTEL LOCATION: Beirut, Lebanon Lebanon is a country recently recovering from 15 years of civil war. Before the war Lebanon was one of the most popular tourist areas in the world. Now recovering and redeveloping, it has many opportunities for new industries to establish there. I shall point out some of the factors which affect the location of industries there and why a tourist hotel would be ideal to be built in Beirut, Lebanon. 1. Accesses to cheap labour, wages are relatively low 2. Access to skilled and higher educated labour force 3.Flexible labour force, people are willing to work shifts and specialise at different tasks. Some Lebanese people have two to three different jobs and work at each one different times of the day and the week.

4.Access to tourist attraction land, Beirut stretches along the coast of Lebanon, and therefore many hotels are located along the beach.
13.

Land is not very cheap, but reasonable with licensed permits to build up and across, The market is excellent for tourism, Lebanon is full of attractive tourism sites, with sandy

making it worthwhile
14.

beaches and a half hour drive away skiing mountains, as well as old monuments and other tourist attractions around Lebanon, which only are minutes away. There is a great deal of entertainment, shopping, restaurants, and centres, theatres, cinemas and clubs, only minutes away from the beach and hotels.
15.

Being on the coast, Beirut is ideal for a tourist hotel, importing and exporting resources is Near good transport network, there is a port, the airport is 15 minutes away, and roads are Good quality telecommunications, telephones, a large use of mobiles with a GSM

easy and cheap.

16.

good, wide and developed and transport is cheap, because petrol is cheap.
17.

network, faxes, emails, internet, computer networks and satellite communications, radio stations from all over the world
18. 19. 20. 21.

Near the government, easy to get contracts and licenses Low tax economy English and French is widely spoken Hotels are very busy and always full, demand is high for them, especially since tourism is High technology is available. Hotels are fully equipped and exclusive. Many facilities available for tourists, everything is close by and easy and cheap to reach Beirut is the main commercial and financial centre in Lebanon Near an international financial centre, easy to get loans Great environment to live in, many amenities, very good schools and universities, top

increasing now in Lebanon

22. 23. 24. 25. 26.

quality hospitals, new and developed housing, many facilities; gyms, health clubs, night clubs, restaurants, cafes, shopping centres, cinemas, sport stadiums and much more.

27.

It is a very safe city, as in crime is very low, and the army is around the country acting as

a defence and legal force, as well as the police. Beirut already has many great hotels doing very well, the Marriott is one example which has opened with a great centre inside, full of shopping, health clubs, pools and cinemas. So I believe it would be great to build a tourist hotel in Beirut, Lebanon. the locations are ideal, on the beach and near by to everything else. It wouldnt be difficult to set up and would be very rewarding.