Site selection is the making the ultimate choice of site where business or manufacturing plant is going to be established. It is an important task to be done in a business case. By selecting the suitable site for the manufacturing plant it would be able to reduce the transportation cost of raw materials and energy, make easy access to infrastructure facilities, availability of labour force and many other benefits.
Selection should be done by considering cost and benefits of available alternative sites. It is a strategic decision to be made, where improper decision may cause considerable loss. So it may requied to select ideal or optimum location for the business.
Following Facts should be concern regarding site selection Availability of raw material
Infrastructure facilities
Legal obligations enforced by relevant authority or the government Environment and climate conditions
Labour force availability Social considerations Waste management
4.1.1 Availability of raw materials
Main raw materials for urea manufacturing are ammonia and carbon dioxide. Currently ammonia plant is not there in Sri Lanka. Ammonia has to be imported from abroad. Considering the carbon dioxide, it is emitted by number of industries as a waste from which it has to be derived and purify. Otherwise any alternative option such as importing should be concerned. In case of ammonia it is cost effective to locate the site near a harbor or sea where it is directly taken in to the storage tanks. The previous urea plant was there in Sapugaskanda along with ammonia plant and petroleum refinery. It is not viable to consider that site since ammonia plant is not there and considering transportation cost. Considering available sites in costal areas in Sri Lanka we select two sites Hambantota and Trincomalee for assessment. Hambantota has many advantages regarding a large chemical plat like urea.
Comprehensive design project
41 Hambanthota is developing area under “Mahinda Chinthana” concept. Many developing projects are underway. An international sea port is going to be established in hambantota which can handle large ships which are unable to access in the Colombo port. Also infrastructure facilities will be developed along with these projects. Vast amount of land is available for low cost in order to establish the plant closed to Hambantota port. Even if there are no enough qualified employees in Hambantota area, due to rapid development along with good infrastructure facilities it would be easy to attract employees from outside areas. Government welcomes projects related to hambantota area and many benefits can be gain such as reduction in tax, grace periods for loans etc. The government is planning to establish a petroleum refinery in Hambanthota. In Trincomalee much of above mentioned benefits are there, but considering the establishment of petroleum refinery and massive port compared to Trincomalee, Hambantota becomes the more suitable option.
It is not economical to import ammonia and carbon dioxide from abroad because of high transportation cost and additional amount of money have to be spend on buying those materials. Those raw materials can be produced at low cost in Sri Lanka. So it is better to have an ammonia plant. Under the government‟s plan to establish a petroleum refinery in Hambanthota, hydrogen can be gained as a byproduct from petroleum refinery and it can be use as a raw material for ammonia production. So it would be better to have ammonia plant in future to aid urea production.
4.1.2 Infrastructure facilities
Hambanthota is a one of main cities in southern part of Sri Lanka which is situated 237 km away from Colombo. Since it is a coastal area we have to consider climate as well as infrastructure facilities such as water, electricity and roads. Direct Infrastructure facilities for urea plant such as transportation, electricity, telecommunication and indirect infrastructures for the employees such as education, health, food, accommodations etc. are being recently developed in Hambantota. On the other hand in Hambanthota there is scarcity of sufficient water reservoirs for the various purpose of the urea plant due to dry zone. But we can fulfill some amount of our water requirement like cooling water using sea water and other requirements using water distribution project which is being develop along with other development projects. Highways are being constructed connecting hambantota port and other developing sites such as air port. So Transportation of other required materials would be more convenient. Other private and public sector facilities including telecommunication, government authorities will also be developed.
Comprehensive design project
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4.1.3 Legal obligations enforced by relevant authority or the government
Yala Sanctuary Park is situated in Hambanthota area. So government obligation may arise for such a urea manufacturing plant construction. Some families may have to resettle to clear the construction area of urea manufacturing plant. Legal obligations may arise from people. Compensation and resettlement should be done in order to avoid such difficulties. Since chemicals are used in the manufacturing it would be necessary to comply with government regulations regarding handling and storing of such chemicals. Emissions from the urea plant should be under permissible conditions. Since site is in costal area air emissions may not have much impact. Sound regulations may not have to be considered extensively since area is remote. Tax and other financial considerations may vary with related to selected site.
4.1.4 Environment and Climate Conditions
Hambantota is located in semi-arid zone in Sri Lanka. Climate is much dryer, but in the coastal side it is much humid so it can lead to corrosion in metallic component in the plant. Law rain fall is an advantage for urea production. Because of coastal wind emissions from the plant may dilute easily and air emission problems may not arise. Only difficulty is the lack of water resources. Sea water should be utilized in order to fulfill water requirement for some extent. But water is needed to be transported from available area nearby. Accommodation for labours and other staff should be constructed considering dry weather.
4.1.5 Labour Force availability
Many people in rural areas like Hambantota are not permanently employed. People from villages may move in to cities nearby or even to Colombo to find employment. So establishing a plant in such area will produce around 1200 direct jobs and many other indirect job opportunities. It will solve unemployment problem to considerable extent. So labour availability is not an issue, but difficulties may arise in finding qualified people.
4.1.6 Social considerations
Obstacles may arise from residential people and from environmentalists. Peoples will resist construction work and may take legal actions. Proper mechanism to resettle residential people who may lose their homes should be established collaboration with government. Environmental concerns should be considered including air emissions, waste disposal, sound levels and necessary steps should be take to control or maintain under permissible levels. Also site should cause minimum environment damage during construction and operation.
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4.1.7 Waste Management
Waste management restrictions are being enforced by the regulations. Plant site should accommodate disposal of waste in to the sea or to the land. Chemical wastes are there from the plants which are considered hazardous. Selected site should have facilities for both waste processing and for storage until waste is properly disposed. Social considerations are important in waste management. Locating plant in a remote location is an advantage.