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Reviewed by Toluwalase Solanke

INTRODUCTION

The location of an industry refers to the geographical area where it is established and carries out its production activities. 

The choice of location is the best decision a business can make because it affects production costs, the availability of raw materials, access to labour, product transportation, and access to markets. Industries are often located in places where they can operate and make maximum profit. 

For example, industries that depend on raw materials are located close to the source of those raw materials, while industries producing consumer products may be located near large markets where their products can be sold. Therefore, the location of an industry plays a role in determining its success, growth, and profitability.

INFLUENCES ON THE LOCATION OF AN INDUSTRY

1. Availability of Raw Materials

When industries are located close to sources of raw materials, it helps to reduce transportation costs and ensure a steady supply of inputs for production. 

Industries that use bulky or perishable raw materials, such as cement, timber, and food processing industries, establish their factories near the source of these materials. This helps to minimize production costs and increase efficiency.

2. Availability of Labour

Labour is a factor in industrial location because industries require workers for production and management activities. Industries that need a large workforce are usually located in places with abundant labour. 

Where skilled workers such as engineers, technicians, and machine operators are available, industries can operate more efficiently and productively.

3. Nearness to Market

Industries prefer to situate near their markets so that finished products can easily reach consumers. Being close to customers reduces transportation and distribution costs and enables firms to respond quickly to changes in demand. Industries producing perishable products, such as bakeries and soft drink companies, particularly benefit from proximity to markets.

4. Availability of Power and Energy

Power and energy are essential for operating machines, equipment, and production processes. 

Industries that require large amounts of energy, such as steel, aluminum, and textile industries, tend to be located in places where electricity, petroleum products, natural gas, or other energy sources are readily available. 

A reliable power supply helps to reduce production interruptions and costs.

5. Transportation Facilities

Efficient transportation networks facilitate the movement of raw materials to factories and finished products to markets. 

Industries are located in places with roads, rails, airports, or seaports. Transportation systems reduce delays, lower transportation costs, and improve access to suppliers and customers.

6. Government Policy

Government policies can influence industrial location through incentives, regulations, and development plans. 

Governments may encourage industries to locate in certain places by providing tax holidays, subsidies, industrial estates, or infrastructural facilities. Industries may be required to locate in specific regions to promote balanced economic development.

7. Availability of Water Supply

Industries require large quantities of water for production, cooling, cleaning, and processing purposes. 

Industries such as breweries, textile mills, paper mills, and chemical plants are usually located near rivers, lakes, dams, or other reliable water sources. Adequate water supply ensures smooth industrial operations and reduces production costs.

8. Availability of Capital

Capital is needed to acquire land, buildings, machinery, and raw materials. 

Industries are more likely to be located in places where financial institutions such as banks and investment firms can provide loans and other financial services. Easy access to capital enables industries to expand production and adopt modern technologies.

9. Climate Conditions

Climate can affect industrial activities, especially industries that depend on specific weather conditions. For example, textile industries may prefer places with moderate humidity, while agricultural processing industries are located in regions suitable for growing their raw materials. 

Favourable climatic conditions help improve production efficiency and reduce operational problems.

10. Availability of Land

Industries require sufficient land for factories, warehouses, offices, and future expansion. Places with large and affordable land are attractive to industrial investors. 

High land costs and limited space in urban centres may encourage industries to move to suburban or rural areas where land is more readily available.

11. Security

Industries prefer locations that are safe and stable. A secure environment protects workers, machinery, raw materials, and finished products from theft, vandalism, and conflict. 

Areas affected by insecurity, crime, or political unrest are generally less attractive to industrial investors because of the risks involved.

12. Presence of Infrastructure

The availability of infrastructure such as electricity, roads, communication networks, healthcare facilities, and housing influence’s industrial location. 

Infrastructure supports efficient production and improves the welfare of workers. Industries are more likely to thrive in areas where these facilities are well developed and properly maintained.

SUMMARY

• Industrial location refers to the place where an industry is established and operated.

• Influences on industrial location include: Availability of raw materials, Labour supply, Market proximity, Power supply, Transportation facilities, Government policies, Availability of land and water

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