Naturally, chemically manufacturing is not only a capital-intensive business, but also a large scale one. Setting up a chemical plant encompasses the construction of an entire facility, which will house both the processing equipment and the company’s administrative offices. For the plant’s operations, you will have to acquire expensive equipment and vehicles, as well as recruit workers for the various units of the company. Moreover, you will need to coordinate functions to ensure a streamlined flow of the process and remain within the set environmental standards.
However, before you get to the actual setting up of a chemical manufacturing plant, there are several factors that you need to consider. Namely, comprehensive studies have to be carried out to draw cost and profit projections, determine the viability of the plant design, evaluate marketability, as well as determine the feasibility of the projects.
In that light, we present you some of the most significant factors that you need to consider before setting up a chemical manufacturing plant:
If you’re considering manufacturing intermediate products, are there any other industries that will require such raw materials to produce their products. Likewise, if you’re planning to manufacture consumer products like cosmetics and soaps, is the market sufficient to sustain such business?
How is the location of the prospective plant site in relation to source of raw materials as well as the planned market? How convenient and cost-effective will it be when it comes to transporting raw materials to the manufacturing plant and dispatching finished products for distribution? Does the intended location meet all regulatory requirements?
Where will you get the raw materials – locally or abroad? Can locally-sourced raw materials adequately provide for the plant’s operation capacity? Where will you get the workforce? Will you find the necessary skills among the locals or you will be forced to source for workers from other regions?
How will you dispose manufacturing waste? Is the prospective location well-matched with the manufacturing plant’s waste disposal design?
Considering all the factors in question, can the plant be run profitably
Chemically manufacturing plants are normally located close to the source of raw materials as well as near the market of the finished products. This is why you will mostly find such plants near ports and near other industries, which often turn out to be the end users of the products they manufacture.
It is also worth noting that chemical manufacturing has some detrimental effects to the water, soil, and air. These effects could subsequently harm plants, people, and animals. This is why this industry faces strict government regulations. The location of a chemical plant needs to meet zoning requirements. Likewise, the plant’s operations must be on top of strict environment safety standards.
With all these factors, it suffices to say that chemical manufacturing business is one of the biggest investments in the world of business, involving massive and capital-intensive constructions, plus the buying of expensive plant equipment. As such, you need to diligently consider these factors in order to get things right from the start. You can also join CDMA to learn more from like-minded entrepreneurs.