C3 / Changing industrial location / P.

16

3.2 What are the factors affecting the location of the

manufacturing industry?
Focus of this unit:
 Industrial location factors  Factors leading to industrial inertia

HKDSE MCQ 2012 Q16, 2013 Q2, 2014

A What location factors matter? Textbook pp. 26–33 Q20, 2017 Q19, Q21, 2018 Q20, Q22, 2019
Q11, DBQ 2014 Q3b

1 When choosing where to carry out a manufacturing activity, industrialists have to consider
various location factors . They usually choose low -cost
locations in order to maximize profits .

 Government policy

2 Which of the government policies below favour the development of manufacturing industries?
Tick ‘✓’ the correct policies below.

Tightening pollution controls ✓ Providing tax concessions

Offering subsidies for starting

✓ Providing loan with low interest rates ✓
businesses

✓ Protecting the patent of inventions ✓ Improving infrastructure

Reducing supply of industrial land ✓ Offering funding for industrial R&D

✓ Reducing land prices ✓ Building industrial estates/parks

Imposing high tariffs on exported Restricting the extraction of natural

goods resources

 Availability of capital

3 There are two types of capital, namely:

‧ financial capital, i.e. money; and

‧ fixed/physical capital, i.e. plants and machinery.

4 Industries involving a large amount of capital input are called capital -intensive
industries. These types of industries are more common in ( light / heavy ) industries.
 C3 / Changing industrial location / P.17

5 a Venture capital is used to finance the creation of businesses with high

risks but may enjoy high return if successful, e.g. (name ONE industry) the
IT/pharmaceutical (or any appropriate answer) industry.

b What are the characteristics of this type of capital? Tick ‘✓’ the correct answers.

It is mainly provided by Much of this kind of capital is used

✓ ✓
professionals and outside investors. in R&D.

It is normally provided by the The returns of the investments are

government and banks. low.

✓ It is usually obtained in large cities. ✓ High growth potential

 Land attributes

6 How do land attributes affect the location of manufacturing industries? Complete the table
below to show how heavy and light industries require specific land attributes.

Heavy industry Light industry

Example Iron and steel, car making, oil Electronics, toy making, textile
refining and garment

Land area required ( Smaller / Larger ) ( Smaller / Larger )

Affordable land price

(per unit area) ( Lower / Higher ) ( Lower / Higher )

Flat land, but production

Relief preferred Extensive flat land operations can be carried out in
flatted factories

Importance of land
attributes to the industry ( Lower / Higher ) ( Lower / Higher )

7 a High-tech industries are usually found in suburban industrial parks

instead of city centres.

b What are the specific land attributes of these industries? Tick ‘✓’ the correct answers.

✓ Lower land prices Rugged relief

Nice environment and amenities to Proximity to universities to gain

✓ ✓
attract quality labour access to researchers and scientists

✓ Availability of room for expansion Adequate natural resources

 C3 / Changing industrial location / P.18

 Access to raw materials

8 Figure 1 shows the weights of raw material and product of the sugar-refining industry. Figure 2
shows a sugar mill.

Sugar mill

Figure 1 Sugar cane

(Credit: Forest Starr and Kim Starr/Flickr)

Figure 2

a Compared with the weight of raw materials, the product of the sugar-refining industry
( loses / gains ) weight during the production processes. The industry is an example of
( weight-losing / weight-gaining ) industry.

b i Refer to Figure 1. What is the major raw material of the industry? Is the raw material
light, or heavy and bulky?

Sugar cane is the major raw material. It is heavy and bulky.

ii Refer to Figure 2. Sugar mills are usually located near ( the source of raw materials /
the market ). It is because:

‧ the raw materials are much ( lighter / heavier ) than the product. The costs of
delivering the raw materials to the sugar mill are ( lower / higher ) than those of
transporting the product to the market. With such a location, the industrialist can
save transport costs and thus increase profits; and

‧ the ( raw materials / product ) are perishable. With such a location, the
industrialist can avoid costs of preserving the raw materials/sugar cane .
Besides, it would be able to keep the raw materials/sugar cane
fresh for processing.

c As the sugar-refining industry tends to locate near the place mentioned in Question bii, the
industry is raw material -oriented.
 C3 / Changing industrial location / P.19

 Access to power resources

9 Figure 3 shows the different location factors of aluminium smelting. The size of the circles
indicates the importance of a particular location factor.

Figure 3

a Power is the most important location factor for aluminium smelting.

b Since the industry consumes a large amount of power resources , it is

usually located near hydroelectric power (HEP) plants which are a
cheap power source.

c The industries which need to be located near the sources of power are power -
oriented.

 Access to labour

10 Figure 4 shows the characteristics of labour at places X and Y. Which location will the
following industries choose? Why?

Place X Place Y
Labour supply: Abundant Labour supply: Abundant
Labour costs: Low Labour costs: High
Skill level of labour: Low Skill level of labour: High

Figure 4
 C3 / Changing industrial location / P.20

a The toy industry will choose to locate at Place ( X / Y ).

Reasons: This industry demands a ( small / large ) amount of ( semi-skilled / skilled )

labour. The supply of labour in this place is ( abundant / insufficient ). Besides, the ( low /
high ) labour costs there helps cut production costs.

b The pharmaceutical industry will choose to locate at Place ( X / Y ).

Reasons: This industry demands ( semi-skilled / skilled ) labour. The quality of labour is
( less / more ) important than labour costs and quantity.

11 The industries which demand a large amount of workers are labour -intensive.

12 Places with strong labour unions and frequent strikes are ( less / more ) favourable for
industrial development. It is because this will ( delay / enhance ) production and thus ( lower /
increase ) production costs.

 Access to markets

13 Match the industrial products in Figure 5 with the characteristics listed below.

‧ Bulky and heavy ‧ Easily outdated ‧ Fragile ‧ Perishable

Easily outdated/Perishable Bulky and heavy

Fragile Perishable
Figure 5
 C3 / Changing industrial location / P.21

14 a Refer to the characteristics of the industrial products shown in Figure 5 on p. 20. The
industries manufacturing these products should be located near the market .

b The industries which need to be located near the place mentioned in Question a are
market-oriented.

 Access to business partners

15 What is the benefit of locating the headquarters and R&D centres of a manufacturing firm near
its business partners (i.e. suppliers and customers)?

By locating the headquarters and R&D centres near

its business partners, a manufacturing firm can
have face-to-face contact with them.
The information collected can be
provided to production plants for improvement.

 Transport and telecommunications

16 Figure 6 shows three locations of manufacturing activities in a region and the

telecommunications infrastructure of these locations.

Location A Location B Location C

Access to the Internet Poor Excellent Average

Telephone services Average Excellent Good

Satellite services Poor Excellent Good

Figure 6
 C3 / Changing industrial location / P.22

In terms of transport and telecommunications infrastructure, which location, A, B or C, is

more preferable for a manufacturing firm to set up a factory and its headquarters respectively?

Factory Headquarters

Preferable location Location ( A / B / C ) Location ( A / B / C )

Explanation It is easily accessible by road, The telecommunications

rail and sea infrastructure is efficient there. This
transport. This enables efficient enables an efficient exchange of
transport of raw materials information between the factories,
to the factory and branch offices, business partners
export of finished products and thus and headquarters
lower transport costs

 Access to management

17 Why do some manufacturing firms consider the access to good management team as an
important location factor?

This is because a good management team is able to choose a ( low- / high- ) cost location for
the manufacturing activities. It can also formulate strategies to expand the market
and handle inputs and distribute outputs of the manufacturing
system efficiently. In this way, the firm can reduce the production costs
and maximize profits .

Technology and innovation

18 Complete the table below to show how technological advancements lower the importance of
the following industrial location factors.

Traditional industrial How technological advancements lower the importance of the

location factor industrial location factors

a Labour Automation (e.g.

using robots and machines) can be
used to replace labour
in the production processes
 ( Lower / Increase ) the
location importance of labour
 C3 / Changing industrial location / P.23

Traditional industrial How technological advancements lower the importance of the

location factor industrial location factors

b Raw materials ‧ Fewer raw materials are needed for

producing goods, e.g. fewer iron ore and coal are needed to
produce a tonne of steel

‧ Substitutes are used in production to partly replace

raw materials, e.g. scrap iron and steel is used to produce steel

‧ Bulk carriers can transport a large amount of heavy

and bulky raw materials in one go, e.g. iron ore
and coal for steel production. This ( lowers / increases )
transport costs per unit of raw materials

In the past … At present …

‧ Perishable raw materials can be delivered over a
longer distance with better refrigeration technologies
 ( Lower / Increase ) the location importance of raw materials

c Power resources ‧ Bulk carriers can transport heavy and bulky

power resources at low costs, e.g. coal

‧ Advancements in electricity transmission and

technologies allow electricity to be delivered over a ( short /
long ) distance at low costs

 ( Lower / Increase ) the location importance of power resources

d Market ‧ Bulk carriers can transport heavy and

bulky finished products to the market at low
costs

‧ Perishable finished products can be delivered over

a longer distance with better refrigeration technologies

 ( Lower / Increase ) the location importance of market

 C3 / Changing industrial location / P.24

19 Figure 7 shows the distribution of

high-tech industries in the UK.

a What can you notice about the

location of high-tech industries in the
UK?

They are located near

universities .

b Why do the high-tech industries tend

to locate near the place mentioned in
Question a?

‧ High-tech industries are

R&D -intensive. With such
locations, the industries can have
a good access to technical support Figure 7
of R&D.

‧ They can also gain access to innovations and new ideas.

‧ University graduates provide abundant supply of ( semi-skilled / skilled ) labour to

these industries.

B Will manufacturing industries always remain at the same location?

Textbook p. 34 HKDSE MCQ 2013 Q20, 2017 Q21, 2019 Q11
Figures 8a and b (pp. 24–5) show the locations of iron and steel works A and B in 1970 and 2019
respectively.

1970

Figure 8a
 C3 / Changing industrial location / P.25

2019

Figure 8b

1 a Refer to Figure 8a on p. 24. Where were the iron and steel works located in 1970?

They were located near coalfields .

b What was the location advantage for the iron and steel works being located at the place
mentioned in Question a?

The iron and steel industry was raw material –oriented. A ( small /
large ) amount of coal was needed during steel production. As coal is ( heavy and bulky /
light ), locating the iron and steel works near the coalfields could help
save transport costs.

2 a What do you notice about the location of the two iron and steel works in 2019?

Iron and steel works ( A / B ) had moved ( further inland / to the coastal region ) while iron
and steel works ( A / B ) remained at the same location.

b Why was the iron and steel works you mentioned in Question a relocated?

‧ The coal reserves of the coalfields had diminished. The favourable

location factor no longer existed.

‧ Coastal location favours the import of coal from overseas. Locating

the iron and steel works in the coastal region helps save the transport
costs of raw materials.

‧ Technological advancements have ( reduced / increased ) the importance of coal as

power resources and raw materials in producing steel.
 C3 / Changing industrial location / P.26

3 a An iron and steel works remains at the same location despite the changes in location
advantages of the original site over the past decades. What do we call such a phenomenon?

We call the phenomenon industrial inertia .

b List FOUR reasons for causing the phenomenon mentioned in Question a.

‧ It is difficult to move buildings and heavy machinery.

‧ Relocation involves high costs.
‧ Skilled labour is available at the existing location.
‧ Linkages with other business partners have been well-established in the existing
location.
‧ Personal preferences of the industrialists for the existing site may result in industrial
inertia.
‧ Local markets are available at the existing location.
(Any four)