PLANT LOCATION

The provinces of Laguna, Batangas and Pampanga are considered by the

researchers as their plant location. The continuous flow of raw materials is a vital factor in

choosing the most suggested location plant construction. Furthermore, these provinces

have industrial parks that are permitted by government law to construct industrial plants

making them most suitable for any industrial manufacturing operations.

Three alternative plant locations will be discussed in this section which are according

to the following factors: 1) Availability of Raw Materials; 2) Proximity of Market; 3) Availability

of Energy Sources; 4) Climate; 5) Transportation; 6) Water Supply; 7) Labor Supply; 8) Site

Characteristics; 9) Community Factors

Factors in Plant Location Selection

Availability of Raw Materials

Sources of raw materials are one of the most important factors to be considered in

the selection of the plant site. It permits significant reduction in transportation and storage

facilities.

Proximity of Market

The location of markets or intermediate distribution centers affects the product

distribution costs and the time required for shipping. The consumers usually find it

advantageous to purchase from nearby sources.

Availability of Energy Sources

Power and steam requirements are in high amount in most industrial plants, and

normally fuel is used and it is necessity to supply these utilities. The local costs of water and

power help determine whether power should be paid for through power distributors or self-

generated.

Climate

If the plant is located in a cold climate, costs may be increased by the necessity

for construction of protective shelters around the process equipment, and special cooling

towers or air conditioning system may be required if the prevailing temperature are high.

Transportation

Bodies of water, railroads, and highways are the common means of transportation

used by major industrial concerns. If possible, the plant site should have access to all three

types of transportation; certainly, at least two types should be available.

Water Supply

The process industries use large quantities of water for cooling, washing, steam

generation, and as raw material. The plant must be located where a dependable supply of

water is available.

Labor Supply

Consideration should be given to prevailing pay scale, restrictions on number of

hours worked per week, competing industries that can cause dissatisfaction or high turnover

rates among the workers, and variations in the skill and productivity of the workers.

Site Characteristics

The topography of the tract of the land and the soil structure must be considered,

since either or both may have a pronounced effect on construction costs. The cost of the

land is important as well as local building costs and living conditions.

Community Factors

If a certain minimum number of facilities for satisfactory living of plant personnel do

not exist, it often becomes a burden for the plant to subsidize such facilities.

Plant Location SelectionOPTION 1 – LAGUNALocation

Laguna is situated 54 kilometres (34 mi) south

of Manila.

Climate With average rainfall hitting around 100

millimeters per month. Wet season usually comes in

June and December, while the dry season comes in

January until May. Rainfall is highest in June and July.

Labor force and employment According to the latest census the NCSO, Laguna City population of 822,628 people

which the population growth rate of 2.16% and population density of 2,540/km2. Labor

employment our mostly in business and it is oriented towards non-agricultural lines and is

rated one of the most productive work forces in the country.

Telecommunications Facilities Telecommunication facilities, broadband and wireless internet connections are

available and are provided by some of the country's largest telecommunication companies.

Power and Water Supply

The city mostly gets its power from an interconnection grid-power. There are also

coal-fired power plants, though these have been controversial due to their environmental

impact. Another coal-fired power plant is nearing completion and is envisioned to make the

city independent from the interconnection grid once completed. And also Water is readily

available to use.

OPTION 2 – BATANGAS

Market

Sugar is a major industry. As a matter of

fact, after the Hacienda Luisita, the country's former

largest sugar producer, was broken-up for land

reform, the Municipality of Nasugbu has been the

home of the current largest sugar producing

company, the Central Azucarera Don Pedro. This

also means that Batangas is also a home for a wide industry of sweets. Rice cakes are also

a strong industry.

Being near the sea, it is only expected that fishing plays a very important part of

the Batangan Economy. Although Batangas has already lost its distinction as Asia's largest

producer of coffee, this industry is still thriving, especially with the boost of coffee shops all

over the country, one of which is Cafe de Lipa.

Climate

The climate of Nasugbu falls under the first type of classification, Type I,

characterized by two pronounced seasons: Dry season from November to April and wet

season for the rest of the year. The annual average temperature in the municipality is 27.3

degrees Celsius. January is the coolest month having an average temperature of 25.8

degrees Celsius, while April is the warmest month registering an average temperature of 29

degrees Celsius.

Transportation

Travel distance from Metro Manila is about 102 kilometers via Tagaytay City.

From Batangas City (the provincial capitol), its distance covers about 70 kilometers.

Labor Supply

Population: 98, 558 (May 2000)

No. of Families: 19, 748

Size of families: 4.99

Site Characteristics

The municipality of Nasugbu is located in the coastal areas (Western tip) of the

province of Batangas with a bearing of 14 degrees 04 latitude and 120 degrees longtitude.

The coastal municipality of Nasugbu is bounded on the north by the municipalities of

Maragondon, Magallanes, and Alfonso (Cavite); on the east by the municipalities of Laurel,

Calaca, and Balayan (Batangas); on the south by the municipalities of Lian and Tuy

(Batangas); on the west by the China Sea. It consists of thirty (30) rural barangays and

twelve (12) urban barangays or Poblacion.

OPTION 3 – PAMPANGA

Location

Pampanga is a province of the Philippines located in the Central Luzon region. It is

divided into 20 municipalities, two cities – Angeles and San Fernando – and four

congressional districts. Pampanga is served by the Diosdado Macapagal International

Airport, which is located at Clark Freeport Zone in Angeles City, some 16 kilometers north of

the provincial capital. The province is home to two air bases under the Philippine Air Force.

They are the Basa Air Base in Floridabalanca and the former U.S. Clark Air Base in Angeles

City.

Market

Pampanga is taking center stage as the country shifts into industrial high gear. The

province has always been a net exporter of food products like rice, sugar, vegetables and

fruits as well as poultry, livestock and inland fish products. It is also richly blessed with a

highly skilled and highly educated resource pool of manpower, who have a tradition of

industrial pursuit especially in the fields of woodcraft, food processing, ceramics,

metalworking and decorative crafts. An excellent network of good roads covers the entire

province and connects to the main arterial highway to Manila and Olongapo City. An

international airport is located within the Clark Special Economic Zone, while other utilities

such as power, telecommunications and potable and irrigated water extensively cover the

entire province and are readily available for industries and businesses.

Energy Availability

Electric power is distributed to majority of the towns through the distribution centers

of the Pampanga Electric Cooperative (PELCO) which include PELCO I, II, III. Small parts of

Candaba and Macabebe are also supplied by Manila Electric Company (MERALCO).

Angeles City and small parts of Mabalacat, Bacolor, and Porac are supplied by Angeles

Electric Corporation (AEC). City of San Fernando is supplied by San Fernando Electric

Company (SFELAPCO).

Climate

The climate is characterized by two extremes: very dry from November to May and

very wet for the rest of the year. The province is exposed to the southwest monsoon and

cyclonic storms, but it is shielded from the northwest and trade winds by the mountain

ranges. 

Transportation

The province of Pampanga is strategically located at the crossroads of central Luzon

and is highly accessible by both air and land. The province is home to two airstrips: Basa Air

Base in Floridablanca, which is utilized by the military, and the Diosdado Macapagal

International Airport (formerly Clark International Airport) in Angeles City. Pampanga also

has five existing municipal ports which function as fish landing centers. These are situated in

the municipalities of Guagua, Macabebe, Masantol, Minalin, and Sasmuan.

Land travel to the province is made easy by numerous buses that travel the routes of

Manila-Pampanga-Bataan, Manila-Pampanga-Zambales, Manila-Pampanga-Tarlac, Manila-

Pampanga-Nueva Ecija, and Manila-Bulacan-Pampanga. The 83.7 - kilometer North Luzon

Expressway (NLEX) extends from Balintawak in Metro Manila to Sta. Ines in Pampanga. It

passes through the large cities of San Fernando and Angeles and municipalities of Minalin

and San Simon through Sta. Ines, which is located near the former U.S. Air Force Base at

Clark Field. The 94-kilometer four-lane Subic-Clark-Tarlac Expressway (SCTEx) to date, is

the longest toll expressway in the Philippines.

Water Supply

Potable water supply in the province reaches the populace through three levels

namely: Level I (point source system), Level II (communal faucet system), and Level III

(individual connections). A well or spring is the pinpointed water source in areas where

houses are few as the system is only designed to serve 15 to 25 households.

Labor Supply

Pampanga ranked third in terms of population size among the six provinces (Bataan,

Bulacan, Nueva Ecija, Pampanga, Tarlac, Zambales) and two highly urbanized cities

(Angeles City and Olongapo City) in Centaral Luzon, contributing 20.11 percent to the eight

million population of the region. At the national level, the province shared 2.11 percent to the

total population of 76.5 million as recorded in the 2000 Census of Population and Housing.

Site Characteristics

The province is a part of the great plain extending from Manila Bay, north of the gulf

of Lingayen, Pangasinan. Most of this area is only a few meters above sea level. The

mountainous areas are near the Pampanga-Zambales border. These areas are covered by

Mountainous Pinatubo Region. The general slope is south and southeast towards Manila

bay and Rio Grande.

Comparison of Plant Location

Table of Comparison in Choosing the Best Plant Location

FACTORS Laguna Batangas Pampanga

Availability of Raw Materials 8 7 8

Market 9 8 8

Energy Availability 9 8 7

Climate 9 7 7

Transportation 9 8 9

Water Supply 9 7 8

Labor Supply 10 9 8

Site Characteristics 8 8 10

Community Factors 9 8 8

TOTAL 80 70 73

The table above will be used as a basis for choosing the most suitable location of the

plant. The important factors to be considered are presented and are graded accordingly

based on the degree of distinction, for each alternative location. The grades range from 10

as the highest and 0 as the lowest. The table shows that the province of Laguna obtained

the highest grades in almost all factors.

Plant Location Analysis

After thorough analysis of the major characteristics of the plant locations, it was

decided that Laguna is the most recommended site for the plant location.

In terms of the physical characteristics of the alternative site, such as site

characteristics, the province of Batangas has the most arable land though the terrain but, it

may not permit its entirety to be submitted to agricultural prospects, but all provinces have

fertile lands and are supported with a good water supply from nearby rivers and bodies of

water.

For the infrastructure facilities, Laguna has more reliable establishment that provide

the needs of transportation and telecommunication. This will be of great help to the

company in their market and personal dealings to other cities especially in Metro Manila.

Faster and more efficient access to the major cities would mean bigger market and income.

In terms of income and financial resources, it has more developed towns, having thousands

of establishments which include construction suppliers and distributors. The residential

sector is more advanced which means bigger demand for construction materials.

Another factor that is considered in the choice of plant location is the population of

the labor force. And based from the data gathered, Laguna has greater labor force that

would be a great help for the company in the hiring of workers.

It was then decided to construct the PEA manufacturing plant in Biñan, Laguna.