Chapter II: Choosing a location to build a factory
I. Principles of site selection for factory construction.
Choosing a location to build a factory is a particularly important step in the investment process of industries in general and food processing factories in particular, because in reality, after the factory is built, this decision is unlikely to change.
Due to the policy of prioritizing the development of light industries. Currently in Vietnam, investors have many opportunities to choose investment locations to build production facilities and the topic here we are interested in is instant noodle production enterprises.
The process of finding a location to build an instant noodle factory goes through two main stages:
Collect information about potential locations for factory construction from industrial park infrastructure companies. These location recommendations can be collected through public information systems, the internet or through representatives of infrastructure companies. In order to make a reasonable choice, one must collect many such location recommendations.
Evaluate and select the most suitable location from known location recommendations.
The sequence of steps for selecting a factory construction site is introduced according to the following process:
I.1. Sequence of steps to follow to select a location to build a factory.
A
A: STATISTICS OF KNOWN LOCATION FACTORS
B
B: ESTABLISHING SPECIFIC REQUIREMENTS OF INSTANT NOODLE FACTORY
Are not
Find a location
C
Check preliminary selection
C: CHECK LOCATION FOUND ACCORDING TO REQUIREMENTS
Is it achieved?
Okay
D
D: SELECTING ASSESSMENT METHODS
Are not
Have
E
Define purpose
Statistics of factors
affect
Identify the requirements of
influencing factors
Determine the method
Evaluate
Location found
Determine the method
Evaluate
Rate the selected location
preliminary selection
There are suitable locations
ok?
There is a location method.
annoying?
Investor's decision
WHIMPER
Have | ||||
Consider | the | point | advantage | fairy |
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E: INVESTORS DECIDE
When choosing a location to build a factory, we must focus on solving two basic problems:
Identify and analyze factors influencing site selection.
Choose the right method to select the optimal location.
I.2. Factors affecting the choice of factory construction site.
There are many factors that influence the choice of location to build a factory. However, we rely on the specific characteristics of the food factory that we want to design and place in Vietnam that has some of the most essential influences.
ENERGY SUPPLY
WATER SOURCE
CLIMATE
OTHER REQUIREMENTS
TRAFFIC
LAND PRICE
CONSUMER MARKET
PROVIDING RAW MATERIALS
IMPACT OF MARKET ECONOMY
LAND CHARACTERISTICS
WORKFORCE
GOVERNMENT
WASTE TREATMENT
CONSTRUCTION SITE
DEVELOPMENT STATUS OF THE AREA
CHARACTERISTICS OF THE INDUSTRY
Factors affecting the choice of factory construction site.
SIZE OF FACTORY
In the conditions of Vietnam, the following factors play the most important role when choosing a location to build a factory:
Position for raw material supply and product consumption markets.
Location with respect to urban transport network.
Water supply, electricity, postal information.
Characteristics of the land (size, shape, ground structure, infrastructure...)
These are the factors that help in the initial preliminary selection.
II. Method and location selected for factory construction.
There are many evaluation methods to choose from and here are the 2 most popular methods today:
II.1. Transport coordinate method:
This method is used to find construction sites for factories with large transportation needs.
II.2. Method of analyzing influencing factors:
The method of analyzing influencing factors is also known as the point-based evaluation method. This is the most commonly used method because of its advantages:
This method considers a synthesis of influencing factors, so it is more practical than methods that rely on only one or a few factors for evaluation.
Pay attention to the significance or comparative value of each factor in the evaluation process.
Simple to use because it uses a unified unit of evaluation (Score) and can evaluate multiple options at once.
This method is carried out in the following 5 steps:
Step 1: Identify evaluation factors.
We can divide the factors affecting the choice of factory construction location into the following 5 groups:
Group of factors related to land characteristics.
Group of factors related to technical infrastructure.
Market related factors.
Group of factors related to the labor market.
Urban relations factors group.
Step 2: Determine the comparative value (in %) of the groups and each factor in each group.
The correlation between influencing factors is expressed through the ratio.
% is imposed and subjective by the person who created it. Therefore, to limit subjectivity in the process of creating a value system, users use statistical methods based on the opinions of many experts. The person who created the evaluation system collects the opinions of experts in the industry related to instant noodle production using evaluation forms. Then summarizes and adjusts to create a value system of the most appropriate influencing factors.
Refer to the document we have the following table of values:
Table 3: Comparative values of each factor affecting the food factories
products in Vietnam
Influencing factors:
Land features : | Land terrain characteristics: 16% | Ground structure: 5% |
Groundwater level: 2.5% | ||
Flooding: 1.5% | ||
Flatness: 3% |
total value 100%
31% | Climate: 1% | |
Land shape and orientation: 3% | ||
Land price: 9% | ||
Land size: 6% | ||
Technical infrastructure: 34% | Water supply: 12% | Public network level: 5% |
Supply from private well: 7.5% | ||
Transportation: 10% | Road network location: 4% | |
Road connection: 3.5% | ||
Railway connection: 1% | ||
Connection to river and sea ports: 1.5% | ||
Energy : 7% | Power supply via public network: 5.3% | |
Power supply via separate generating station: 1.5% | ||
Oil level (FO): 1.7% | ||
Wastewater treatment: 3% | ||
Waste treatment: 2% | ||
Market : 20% | Raw material level: 14% | Raw material source: 10% |
Raw material price: 4% | ||
Product consumption: 6% | Market position: 3% | |
Market characteristics: 3% | ||
Labor force: 10% | Position in the labor market: 6% | |
Housing: 2% | ||
Public service works: 2% | ||
Urban Relations: 5% | Location relative to residential area: 2% | |
Nearby factory: 3% | ||
Step 3: Determine the rating level for each influencing factor.
The common method for building an assessment is the SWOT analysis. These words are the first letters of the English language: strengths, weaknesses, opportunities, threats. This method helps to identify the strengths and weaknesses, the development opportunities that affect the factor and what can become threats in that factor. From the analysis
SWOT gives comments according to 4 levels: very favorable, favorable, less favorable and unfavorable equivalent to 4 scoring levels on the evaluation scale.
Step 4: determine the coefficients of the influencing factors.
The essence of this step is to convert the value of each factor from % form to score form.
The value score of each factor is determined by the following expression:
H GT (%) D th
D max
H: value score of each factor, % GT(%): value of factor according to, %
D th : the evaluated score of the influencing factor, Score
D max : the highest score in the rating scale of each factor, Point (ie 1% is equivalent to 1 value point)
Step 5: Establish a scoring system.
Industrial zones are places that can be chosen as the location to build factories. They are mainly concentrated in 3 key economic regions of the country: the northern region: Hanoi - Hai Phong - Quang Ninh; the central region: Hue - Da Nang - Quang Ngai; and the southern region: Ho Chi Minh City - Bien Hoa - Vung Tau and now Binh Duong also has new industrial zones. In the design scope, we focus on the southern region to choose the location to build factories.
Table 4: The industrial zones selected for analysis are as follows:
STT
I | II | III | IV | ||
Name of Industrial Park, Export Processing Zone | Phu My I | Tan Binh | Hoa Nai | Tsunami II | |
Local | Vung Tau | Ho Chi Minh City | Dong Nai | B. Duong | |
License Issue Date | 1998 | 1997 | 1998 | 1996 | |
Infrastructure construction investor | Vietnam | Vietnam | Vietnam | Vietnam | |
Area (ha) | 954.4 | 178.63 | 230 | 388 | |
Leasable area (ha) | 651 | 105.8 | 135 | 248 | |
Foreign investment (million USD) | Total investment capital (USD million) | 267.7 | 2.5 | 91.83 | 183.19 |
Real capital | 104.65 | 1 | 26.39 | 102 | |
current(tr.USD) | |||||
Domestic investment (USD million) | Total investment capital (USD million) | 10954 | 39 | 14.95 | 175.44 |
Capital employed (USD million) | 3049.7 | 16 | - | 20 | |
Acreage | Leased (ha) | 259.5 | 8 | 29 | 50 |
Percentage | 39.86 | 7.56 | 21.48 | 20.16 |
Table 5: Analysis of factors and selection of factory construction sites by points.
Location factors
Rating level | Point | Location number | ||||
I | II | III | IV | |||
1. Land characteristics 1.1. Geographical characteristics image 1.1.1. Soil structure 1.1.2. Shape and Land orientation 1.1.3. Flatness of the land 1.1.4. Groundwater level below ground level 1.1.5. Flooding potential overwhelm 1.1.6. Climate conditions | Very convenient Favorable Less favorable Unfavorable Very convenient Favorable Unfavorable Flat bumpy Very bumpy ≥ 5m 1 – 5m ≤ 1m Are not Little Capable Very convenient | 3 2 1 0 3 2 1 3 2 1 3 2 1 2 1 0 4 | 3.3 3 3 2.5 1.5 1 | 3.3 2 3 1.7 1.5 1 | 3.3 2 3 1.7 1.5 1 | 3.3 3 3 1.7 1.5 1 |
(storm, rain…)
Favorable Less favorable Unfavorable | 3 2 1 | |||||
1.2. Land price | Very suitable Fit Acceptable high odor Too high | 5 4 3 2 1 | 7.2 | 1.8 | 9 | 9 |
1.3. Land size | Achieve Approximate requirement | 2 1 | 6 | 3 | 6 | 6 |
2. Technical infrastructure 2.1. Water supply 2.1.1. From well 2.1.1.1. Ability drill 2.1.1.2. Ability suction (m3 / hour) 2.1.1.3. Characteristics of water (hardness, medium temperature) 2.1.2. Water supply from urban network | Drillable, cheap Drillable, expensive Capable Big Meet the requirements Just met the requirements Very suitable Fit Still suitable Network already exists, cheap to connect Network available, moderate connection cost Network available, expensive connection costs Membrane coming soon | 3 2 1 3 2 1 4 3 2 1 3 2 1 | 2.5 2.5 1.9 5 | 1.7 1.7 1.9 3.3 | 1.7 1.7 1.9 3.3 | 0.83 1.7 1.9 3.3 |
2.2. Traffic 2.2.1. Location in the road network 2.2.2. Traffic road network | Very convenient Convenient Acceptable Already have Must build but convenient Complex Xd | 3 2 1 3 2 1 | 4 3.5 | 1.3 3.5 | 1.3 2.3 | 1.3 2.3 |