Identifying the project location and land refers to the activities of selecting the most suitable location and estimating the land size and cost. The process of selecting the project location begins by setting the requirements, which may include the size of the area to suit the factory and other premises of the project, technologies, loading and unloading, storage area, laboratory requirements, civil and electrical, internet, and utilities, followed by selecting the project location. Selection of a project location involves the assessment of location options and deciding on the best-fit option based on criteria like how near it is to the infrastructure, building requirements, target market, distribution channels, suppliers, efficient operation, costs and profitability, and future growth. The factory may decide to construct the project building and search for suitable land either to buy or lease. Importantly, the feasibility study, in either way, will estimate the land cost as purchasing or renting.
Step-By-Step Process
- Identify the requirements for the project location that may include, for instance, the size of the area to suit the factory and other premises of the project, technologies, loading and unloading, storage area, laboratory requirements, civil and electrical, internet, utilities, etc.
- Explore location options and choose the most suitable location based on criteria like how near it is to the infrastructure, building requirements, target market, distribution channels, suppliers, efficient operation, costs and profitability, future growth, etc.
- Decide on the size of land required to build the factory and whether to buy or lease it.
- Explore land options and decide on the land and its cost.
- Prepare a document highlighting the above outcomes, and share it with your team and experts.
Example
The pharmaceutical manufacturing project of about 70,000 square meters will be located in XXX Industrial Areas- XXX, benefiting from the facilities provided by the industrial area. The project’s built-up area is estimated for about 40% of the total area. Here are the breakdown estimations of the built-up area and cost of the plant:
| Areas | Area Estimation (Sqm) | Cost (US$/M2) | Total Cost (US$) |
| Stores | |||
| Stores | 4,068 | 750 | 3,051,000 |
| Factory | |||
| Solids | 5,343 | 1,500 | 8,014,500 |
| Nasal Drops / Spray | 1,149 | 1,500 | 1,723,500 |
| UDV | 1,805 | 1,500 | 2,707,500 |
| UDV (Sterile, 25%) | 602 | 2,500 | 1,505,000 |
| Ampoules | 955 | 1,500 | 1,432,500 |
| Ampoules ( Sterile, 25%) | 318 | 2,500 | 795,000 |
| Liquid Vials | 843 | 1,500 | 1,264,500 |
| Liquid Vials ( Sterile, 25%) | 281 | 2,500 | 702,500 |
| Eye Drops | 540 | 1,500 | 810,000 |
| Eye drops ( Sterile, 25%) | 270 | 2,500 | 675,000 |
| Eye Ointments | 663 | 1,500 | 994,500 |
| Eye Ointments ( Sterile, 25%) | 221 | 2,500 | 552,500 |
| Pilot Plant (Solids) | 786 | 1,500 | 1,179,000 |
| Secondary Packaging (5 Areas) | 3,000 | 1,000 | 3,000,000 |
| Administration | |||
| Admin | 1,495 | 1,000 | 1,495,000 |
| Labs, Utilities, and Services | |||
| Labs | 1,159 | 1,000 | 1,159,000 |
| Utilities | 1,165 | 1,000 | 1,165,000 |
| Services | 2,055 | 1,000 | 2,055,000 |
| Other Facilities | |||
| Plantrooms | 2,500 | 1,000 | 2,500,000 |
| Others | 150 | 1,000 | 150,000 |
| Total | (29,368) or 30,000 | $ 36,931,000 | |
Useful Tips
- Identify the project land requirements based on the project definition and plans.
- Explore various location and land cost options, whether to buy or lease and decide on the most viable option for the project.
- Consult experts and share discussions with your team and stakeholders.
Things To Avoid
- Choosing a location that hinders the project’s operation, feasibility, and growth.
- Deciding on the project location and land cost without proper prior studying.
Final Note
This article is sourced from my new book- Your Guide For Preparing An Industrial Feasibility Study.
For more information about the book: https://growenterprise.co.uk/book-your-guide-for-preparing-an-industrial-feasibility-study/
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The author: Munther Al Dawood- Industrial Enterprise Expert
Grow Enterprise 