Factors affecting location decisions of food processing plants

Abstract

The main aim of this study is to examine the determinants of location choices for food processing plants using the results of 59 personal surveys. The 61.3% of the food processing plants that were interviewed are small scale plants, 9.1% are large scale plants and 29.6% are medium scale plants. Sixteen of the firms process vegetables, 12 process poultry, 12 process dairy and 9 process seafood products. Business climate factors are divided into six categories (market, infrastructure, raw material, labor, personal and environmental) and 17 specific location factors are considered. The survey responses are analyzed by types of raw materials processed and by plant size. 43.7, 55.3 and 42.2% of the respondents cited categories of Market, Raw Material and Infrastructure respectively as important, while 44.3, 50.7 and 74.4% of the respondents cited, labor, personal and environmental regulation categories of as not important. Thus survey findings indicate that plant location choices are mainly driven by market, raw material and infra structural factors. Environmental factors such as environmental regulations and permissions are relatively insignificant. © 2007 Asian Network for Scientific Information.