group industry

Group Industry

By 11Amazing

THE Factors affecting industrial location

Imagine you are the CEO of a manufacturing company that makes high tensile strength steel in the UK. You are about to expand to a new branch somewhere in the UK. But where do you put the new building? What about the transportation costs of raw materials? What about getting the new steel to its buyer? And what about being close to a settlement with a workforce to employ? All these factors need to be considered before placing a new industry location.

List of factors affecting industrial locationTRANSPORT: Being close to raw materials lowers transportation costs but the type of industry also affects the cost. Light industry requires less deliveries which can be quick and easy to transport.Heavy industries need more resources to keep up the rate of production. ENERGY: Usage of energy is important in manufacturing but more specifically heavy industry. Heavy industry requires vast amounts of electricity and heat to keep machines, furnaces and conveyor belts running. MARKETS: Markets are needed to sell things. Sounds simple doesn't it? However these days many manufactured resources are sold overseas so easy access to a dock or airport is paramount.

More factors affecting industrial location

RAW MATERIALS: These resources are needed to make the goods the factories produce. The more there are close by, the faster goods can be produced. Generally heavy industry uses more raw materials than light industry and use more types. GOVERNMENT: This can be an especially useful tool for getting funds and have a greater range of possible areas to locate the manufacturing plant. Large sums of money i.e. capital investment are more attractive to heavy industry firms as they need the funds. SITE NEEDS: The location needs to have certain features for large industrial manufacturing. These are a low sloping or flat land, cheap developable land and land which no one will object to development on.

Even more factors affecting industrial location... >.> LABOUR: Access to a large workforce is possibly the most important factor in placing a possible site. Having a large labour force that are cheap to pay and are highly educated is the key to having an efficient, high output manufacturing industry. OTHER COMMUNICATION: Having good comunications within your company allows easier access to overseas contacts so that your manufactured products can be sold with ease. CAPITAL: By investing capital in the company you can fund large scale manufacturing with heavy machinery. Because of this more capital is used in heavy industry than in light industry.

Heavy Industry

A consideration of locational factors: transport, government policy, raw materials, finance, labour, energy, physical site.Case studies of secondary industries to illustrate the changing relative importance of locational factors: a traditional area of heavy industry, a footloose industry and those associated with TNCs and NICS. The case studies are to consider the industry as a system, the physical and human factors affecting its location, the nature of the industry and recent problems and changes. Case studies of industries should be chosen with at least one from each of UK, EU and LEDCs.

Case Study - Teesside

Steel- making - Historical Background• Iron and steel making began to develop along south bank of

the Tees in the 19th century.• This occured because all the raw materials and fuel

supplies were locally available. • Iron ore from the Cleveland hills, coking coal from the

Durham coalfield and limestone from the East Durham plateau.

• Raw materials were usually much heavier than products and transport was not developed as well as today so a location near to raw materials made more economical sense than a location close to the marked.

• In Tees case it was close to both with shipyards lining the river, which were part of the demand for the steel.

Case Study - Teesside

Case Study - Teeside

Steel Making - In the 1990's• Most mines and shipyards in the area had closed• Teeside still had location factors than allowed it

to continue to grow as a centre for industry• Modern Plants (Redcar works) have been built as

recently as the 1980's and investment in the area continued

• The Tees estuary is wide, sheltered and deep, allowing large carries to ship in iron ore cheaply made from anywhere in the world and making transport into the area easy. There is also a railway line running into the area


Steel Making - In the 1990's continued...• The export of steel from these areas create trade

in overseas markets • The history of industry creates a labour force with

the necessary skills to work in steel making• The land has several site factors suiting it to

industry, it is flat, large, and has few other uses excluding industry, meaning large scale projects can be set up on cheap land easily

Redcar Steel Works


Other Heavy industries on Teeside • The local materials that are provided at the teeside, such as

rock salt, gypsum and coal as the fuel attracted the chemical industry.

• Since 1950, the expansion has been in Oil. • The oil pipe lines from the Ekofisk field in the north sea

provides the oil mostly.• The north banks of the river is covered by oil storage tanks,

refinaries and chemical works. • The largest industrial complex is the wilton works on the

south bank.

ICI Billingham

Footloose Industries

An industry whose location is not influenced strongly by access either to materials or markets, and which can

therefore operate within a very wide range of locations.

What and where?

Footloose industries contain growth indsutries, which are often called sunrise industries. There are many of them along motorway corridors. The greatest concentration of them is between London and Reading along the M4. There are many light industries - producing and selling electrical goods, car parts and food companies - in this area as well. As well as many high-tech companies, which are involved in micro-electronics for computers and telecommunications equipment like Digital and NEC.

General advantages for the growth of lights industries.

General advantages for the growth of light industries. • Being close to large marketal areas.• Good transport links e.g motorways.• Close to channel tunnel and ports for EU market.• Near to airports for international business links.

Specific Advantages for High-Tech Industries

Labour

The availability of highly skilled research scientists and engineers is very important. The presence of universities in the surrounding area helps to provide a pool of graduates, and the universities also offer research facilities. The presence of aerospace research by companies like Rolls Royce and British Aerospace, attracts other companies to the area, such is the case around Bristol.

LocationIt is important for the company to consider where the company is based, due to the preferences of it's workers. This means that popular places for workers, are near the countryside, near airports, as well as being near big commercial cities.

The Rhine-Ruhr Region

What is the Rhine-Ruhr Region?

• It is situated within the North Rhine-Westphalia.• The largest town within this region is Cologne.• It has the single greatest concentration of

Industry anywhere in the EU.

Types of Industries in the Rhine-Ruhr Region

• For over a hundred years, the region's industry was dominated by coalmining.

• There is also industries such as textiles, steel-

making and smelting metals, heavy engineering and chemicals.

• More recently, oil-refining has become an important

industry and food processing is the most important of the consumer industries.

Factors for the growth of industry in the Rhine-Ruhr

Region

1. Large Energy Supply 2. Variety and High Quality of Raw Materials 3. Created its own market, allowing smaller companies and industries to develop in a wealthy area. 4. Alot of people in the region. 5. Accessible by the River Rhone.

Industrial change since 1950

Industrial decline has not been as accelerated as elsewhere in Europe because of:• the amount of quality of Ruhr coal• the productivity and prosperity of German industry• the central position if the region within the EU• the water links along the River Rhine.

But, there has also been some evidence of decline:• decline in the number of miners; from over half a million to

under 100,000• Non-traditional industries are now now well established

within the region• A greater demand for tertiary service.

Main problems in the Rhine-Ruhr Region

1. Unemployment 2. Overdependence on Mining and Heavy Industry 3. The effects of over 100 years of heavy industry on the environment.

A picture showing the pollution and scarred landscape of the Rhine-Ruhr Region

Industries in LEDCs• Industries in LEDCs are still mainly dominated by primary

activities such as agriculture. • Approximately, more than 50% of the industry in an LEDC is

agriculture.• In countries in sub-Saharan Africa, farming is the way of life

for many people.• The employment pattern is the reverse to that of MEDCs.

Female Farming In Africa

Industries In LEDCs Continued

• However, in some LEDCs the secondary and tertiary sectors of industry are now important.

• Mexico, Brazil, South Korea and Malaysia are examples of newly industrializing countries.

• They are known as this due to the fact there has been a sufficient industrial growth in these countries.

• Some of this industrial growth has been associated with investment by multi-nationals.

How does this link to the specification?

• Case studies of industries should be chosen with at least one from each of UK, EU and LEDCs.

• The case studies are to consider the industry as a system, the physical and human factors affecting its location, the nature of the industry and recent problems and changes.

Multi-national Corporations

- These are companies which have business interests in many different countries.- These business interests can include mining, farming and manufacture.- The headquarters of these corporations are commonly in MEDCs but the corporations themselves are global companies.- Many of these corporations are well known companies such as: • Ford - a vehicle manufacturer, • Shell - oil and mining• Nestle - food and drinks

Advantages and Disadvantages of Multi-nationals+ Countries can benefit from economic growth+ It can help poorer countries in places like Africa and Asia - Multi-nationals are motivated more for profit rather than the economic growth of a country.- They are competitive corporations which would leave a country as soon as no profit can be gained Multi-nationals in countries has had different views, with manufacturing industries profiting the most in south-east Asia but there is little to bring to the economy and the workers in Central America.

Advantages of the presence of multi-nationals in LEDCs

• They bring Capital, Technology, Knowledge, Expertise and Skills to the country.

• They set up Industries such as vehicle manufacturing, engineering and chemicals, for which the LEDC does not have the technology and the capital.

• They bring/encourage improvement of the transport infrastructure.

• They create jobs• They increase exports • There may be other benefits from the multiplier effect

and spin-offs

Disadvantages of the presence of multi-nationals in LEDCs• There are few jobs when industries are capital intensive and

technology is used to do the work• Low wages gives the impression that the company has

moved there to exploit the workers• Companies avoid taxes and export the profits• Industries are export-dependent • Only a limited range of industries are chosen, not for the

best needs of the country but for their earning potentail to the company.

• Poor safety records and inadequate pollution controls• Working standards below those that would be allowed in the

country where the HQ is located.

How does this link to the specification?

• Sample studies to illustrate the main changes taking place such as deindustrialisation and the decline in traditional manufacturing industries in MEDCs, increasing tertiary and quaternary sectors compared with the industrialisation in LEDCs and the growth in importance of TNCs.

Newly Industrialising Countries(NIC's) pages 180-181

What does it say in the specification?

"Case studies of secondary industries toillustrate the changing relative importance of

locational factors: a traditional area of heavyindustry, a footloose industry and those

associated with TNCs and NICS. The casestudies are to consider the industry as asystem, the physical and human factorsaffecting its location, the nature of the

industry and recent problems and changes.The problems of the environmental impactof industries, particularly heavy industriesand their contribution to land, sea and air

pollution."

Introduction

• In the LEDC's, the manufacturing industry is not shared out equally.

• In the 1970's, multi national companies invested heavily in LEDC's

• Nowadays, there is more focus on growth in East Asia, because of the low cost labour that can be found.

• In the mid 1990's the wage rate in the Far East were far below MEDC's

Advantages of East Asia for industrial location

Cheap labour supply - Wages are low, workers are reliable, work hard and health and safety is not a priority.Transport - Good access to shipping lanes. Containers reduce cost of transportation. Market - There is a large market created for MEDC.Government - South Korean government discourages the import of manufactured goods by a system of tariffs. Inward investment is encouraged especially if it brings high or new technology.

Problems with rapid growth

In some countries, people's health and the enviroment that they work in have been overlooked in favour of rapid industrial growth, for example: • working conditions in factories

are unsatisfactory• air pollution • pollution of rivers which can lead

to loss of wildlife

Some of industrial growth is based upon increasing exports which may cause the country to enter a recession.

Industry in an LEDC - Case Study - South Korea

An image showing the main industries in South Korea

Pros and Cons for South Korea as an industrial country

Pros

• A cheap and efficient workforce

• Easy access for water transport

• Markets on the Pacific Rim• Restrictions on imports to

rivalling countries

Cons

• Air pollution and industrial fumes from Seoul

• Strikes• Faulty goods

Organisation of industries in South Korea

• Thirty chaebol make up 3/4 of industrial output• These chaebol are active in many areas of industry• Driving desire to become leading global companies• Examples of these are Hyundai and LG which are Korean

companies marketing to MEDC's.

Location of Industries according to the Syllabus.

A consideration of locational factors:transport, government policy, raw materials,

finance, labour, energy, physical site.Case studies of secondary industries to

illustrate the changing relative importance oflocational factors: a traditional area of heavy

industry, a footloose industry and thoseassociated with TNCs and NICS. The case

studies are to consider the industry as asystem, the physical and human factorsaffecting its location, the nature of the

industry and recent problems and changes.The problems of the environmental impactof industries, particularly heavy industriesand their contribution to land, sea and air

pollution.

The case studies are to consider the industry as a system, the physical and human factors affecting its location, the nature of the industry and recent problems and changes. Case studies of industries should be chosen with at least one from each of UK, EU and LEDCs.

Changes in industrial location in the UK (pages 182 - 183)

This example is set in the UK, but occurs in many MEDCs. There are two general trends in these changes; Growth of out-of-town locations, and areas in need of goverment assistance.Growth of out-of-town locationsTraditionally, the manufacturing industry is located near the town centre, sometimes near canals. Sometimes, space is cleared for industry, called brownfield sites, but these sites aren't seen as attractive to new companies, who usually build on greenfield sites, rural open areas where there has no building previously, usually in the rural urban fringe. Greenfield sites are better than brownfield sites because: the land is cheaper, there is more space, it is closer to motorways for transport, there is less traffic congestion and it is easier to landscape.

Changes in industrial location in the UK In these sites, when many of the tenants are manufacturing companies, it is called an industrial estate. When there is a mixture of light manufacturing, retail, lesuire, warehouse, offices and research it its called a business park. Usually, brownfield sites are industrial estates and greenfield sites are business parks. Science parks are business parks with a direct link to Universities. The intention of this is to provide a link between development and research, and business possibilities.

There are approximately 40 science parks in the UK, wiht the largest being Cambridge Science Park. The pie chart above show the types of companies found in Cambridge Science Park.

Changes in industrial location in the UKAreas in need of government assistance

The map to the left shows the traditional areas of industry within Britain. The majority of these (excluding only London) were close to coalfields. This is because coal was the main fuel from the start of the industrial revolution until the 1950s. They built factories close to the coalfields to save on transport. Modern industries, however, prefer to be close to motorways rather than the fuel supplies. Recently, there has been a great decline in heavy industry. Those industries that fail to modernise, such as the shipbuilding industry, are now unable to compete with over-sea companies.

Changes in industrial location in the UKThe heavy industry that did survive, however, such as steel, have changed, in order to mordernise, and they bear only a very small resemblance to their original state. Lots of plants are closed, and is concentrated in four places with the greatest advantages (see map). Teesside is one of these. The steel output at teeside increases with use of modern industry, even with less staff (see graph). Even the ,ost profitable industry have lost workers.

Chorus Steel Factory -Teesside

Changes in industrial location in the UK

It was mainly the northen and western areas of Britain that were affected by the decline of

coalmining and heavy industry. Footloose companies preferred the south and the east. Areas of job losses can get assistance from the UK government and the EU. This is an example of how politics influence industrial location, and it is only with this assistance that Central Scotland, north-east England and South Wales still have industry on them.

The Globalisation of industry

Industry

• Industry can be international. • Large companies set up factories locally

and in other countries.• Industry in the UK is part of the EU

(except for when you are doing the exam). For example Ford operates within the EU as if it were all one country.

During the 1990s

• South Korean companies made large investments. This shows how LEDC companies try to go global in order to sustain growth.

• An example of this is Samsung, which produces microwave ovens at Teesside, and LG, which has a plant in North-East England. o “Hyundai to build $2.4Bn plant in Scotland”

- Bowen and Pallister Understanding GCSEGeography p184 figure 2 published 1999

Crisis

• Being part of a global industrial community can sometimes lead to being part of a crisis.

• The Asian financial crisis of 1997/98 is an example of this:o “Hyundai delays $3Bn Scots plan” “Korean crisis forces factory investment to be put on

hold” “Asian crisis will slow world growth”

- Bowen and Pallister Understanding GCSEGeography p184 figure 3 published 1999

Eastern Europe

• It is close to wealthy EU markets.• There is a lower cost of production.• Multi-nationals go where they can make

the most profits; for example, Hungary, where there are lower wage costs