Abstract:
The best optimum location for industry or manufacturing plant is a highly debated issue in
industrial location theory. In literature of industrial location, there are many theories,
frameworks and techniques available for the selection of optimum location. But when it
comes to practice there are many issues and factors have to take into account which are not
in the domain of the traditional industrial location theory. Generally in literature, the most
important primary and secondary factors for industry or plant location/relocation listed as
economic, financial, social, environmental, legal, regulatory, incentives, taxes, transport,
energy, communication, human resources, raw materials, market, regions factor
endowments and speciality, law and order, etc. In this context, this study analyze the case
of Sri Lankan Lubricant Plant relocation by using Factor Rating Model with Weighted
Score Method to find out how far these factors are critical in plant relocation and their
relative significance. The main objectives of the study are to identify the most critical
success factors for relocation of industrial plants, ascertain the optimum plant location to
maximize benefit to the company and to find strategies and guide lines for effective plant
relocation. Primary data was collected by interviews (sample 75 people) key stakeholders
of the Lubricant industry, including pressure groups (civil society and NGOs), and
recently relocated other similar types of plants as this is a relocation rather location of a
new plant. Special emphasis is given to collect data from top to middle management in
various functional areas, trade unions and different levels of employees at the Lubricant
Plant itself. After completion of literature survey and consultation with industry experts,
twelve critical success factors and possible eight optimum locations have identified. The
main outcome of this study is ranking of these eight locations according to the selected
twelve critical locational factors and finally presenting options for the management to
decide which location to select according to their preferences. Furthermore, this study
could be used as guidelines for any similar type of plants relocation. The main policy
message of the study is that before relocation of any industrial plant stakeholder
consultation and awareness about the repercussions of. relocation among the present
employees and trade unions are very necessary for any sustainable plant relocation.
Therefore, management has to frame proper strategies and means to convince stakeholders
including employees and trade unions well in advance about the realities of relocation.
ABSTRACT
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