4/7/2012 5:47:04 AM
Posted By: sashoo Membership Level: Silver Total Points: 382
FACTORS THAT AFFECT THE LOCATION OF INDUSTRIES This is from East Africa's perspective.Assuming that the principle aim of the firm is to maximize profits, it will always endeavor to locate its establishments at the lowest cost of production. The following factors will affect the location:1. Raw Materials:Firms using raw materials that are costly to transport will definitely be attracted to the source of the raw material. Some firms operate in a “weight” reducing technique, where a given quantity of raw materials is processed down into a small quantity of finished products. It’s cheaper to transport the lighter finished goods to the market, than it is to transport the bulky raw materials to the industry. For instance, Pan African Paper Mills is located at Webuye; but we all know that Webuye is 400 km from Nairobi, which is (Nairobi) in fact the center of printing and publishing in East Africa and hence the main market for paper. The main advantage of the location of Pan African Paper Mills at Webuye is that it is close to the Kenyan forests from which timber is obtained to manufacture paper.Another example, which is raw material oriented, is exhibited in firms which manufacture perishable foodstuffs e.g. The Kenya Orchards Ltd has got its main food processing plant at Machakos because the vegetables, which are the raw materials, are grown near Machakos.2. Markets:Some firms find it economically viable to locate themselves as close as possible to their markets. This applies to firms which use a given quality of raw materials. They use these given raw materials to add weight to the products during the manufacturing process so that the finished products are heavier. These industries are known as the “weight” increasing industries; for instance, the brewing industries.Another example is whereby perishable finished products are manufactured, calling for speedy delivery to the market e.g. Bakeries. In addition to this, industries dealing with breakable goods also favor market location e.g. glass. Furthermore, these industries tend to be labor intensive, using large labor force in the assembling of goods.3. Fuel and Power:Fuel and power do not play a vital role in East Africa as it does in the established industrial centers of Europe and North America, which substitute electricity with coal. Most firms in East Africa use electricity as their main source of power and this can be transported over long distances and at low costs. However, major electricity generating plants may attract a conglomeration of firms especially those which use large quantities of electricity. This can be well illustrated by the concentration of many industries near Owen Falls at Jinja, Uganda. Owen Falls is Uganda’s electricity generating plant.4. Labor:Due to high levels of unemployment in Kenya, unskilled labor is usually available throughout the region. Therefore, firms requiring skilled and semi-skilled labor will have to locate themselves in the already established industrial centers in major towns or be prepared to undertake intensive training programmes.5. Transport:Transportation of raw materials and finished products to the industry and the markets respectively is also a factor that affects the location of industries. This explains why many firms in East Africa are located in proximity to the Mombasa-Kampala railway line.6. Government Influence:Industries have tended to locate themselves in towns such as Nairobi and Mombasa. The rural centers have been forgotten and this has created numerous problems like:i) Unequal distribution of income between urban and rural areas. ii) Congestion and creation of slums in the urban areas. iii) Unemployment in the urban areas, creating further problems of increase in crime, robbery, violence and prostitution among others. For this reason, the government has had to intervene so as to advocate for decentralization, as I have explained below.REASONS FOR WHICH THE GOVERNMENT MAY INFLUENCE LOCATION OF INDUSTRIES: i) Development – regional development. ii) Creation of employment.iii) To reduce rural urban migration. iv) To reduce income inequality.v) To decentralize the industry.7. Location near a firm that provides an input: A sweets industry, for instance, should be located near the Sugar industry.8. Land:Land may not be a very important factor in terms of a firm’s location, though its availability may affect industry location in certain instances.9. Water:Some firms require water as one of their inputs. Such firms, when located where there is an adequate supply of water, may have reduced production costs.10. Climate:Changes in weather conditions highly affect business activities especially in the agricultural sector.
Next: Factors of production in a manufacturing entityPrevious: Should we embrace the 2-6-6-3 education system or upgrade the current 8-4-4 for our economy to thrive?
Contact us: email@example.com