Criteria For Plant Location

Technological Institute of the Philippines
CRITERIA FOR
PLANT
LOCATION
CRITERIA FOR PLANT LOCATION
Selecting the best plant location for the production of the desired
product is very important as it will be the site where all operations will take
place. There are a number of important factors that need to be considered,
evaluated, and graded accordingly to determine the optimal plant location. One
of the factors to be considered when selecting a plant location is a location that
will result in the lowest average cost and transportation cost of the products.
Other factors may be the availability and proximity of the raw materials to be
used, the accessibility to the market where the product will be sold and the
labor supply.
1. Raw Materials Proximity
The plant location should be accessible to the target market, and the
source of raw materials. It is better if the access for transportation is easy
which can lessen the travel time and cost for transportation.
2. Raw Material Availability

The availability and price of suitable raw materials will often determine
the site location. The plant is producing Magnesium Sulfate Heptahydrate, thus
it should be best located close to the source of raw materials – dolomite and
sulfuric acid. Raw material availability is a vital factor to consider in overall
costing. Its source must be near the plant and must be an accessible location.
The advantages of near sources of raw materials are low transportation cost and
continuous production. The important points in considering the sources are
sufficient supply of the raw material in a certain region offering reasonable
price, good quality, right quantity, and provides variety of selection.
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3. Accessibility to Target Market (Agriculture)

The plant should also be near or accessible to markets with high
demands of the product. Buyers find it advantageous to purchase from nearby
sources. Ease of the product distribution contributes to the performance of the
plant. It is ideal that marketing and sales of the product should be done in
markets in which it is widely known and consumed. Since the transportation of
the goods to its consumer requires fuel, and other costs, this factor should not
be overlooked. The longer the path to its consumers, the higher the
expenditures will be.
4. Transportation Facilities
Transporting of raw materials from sources and distributing the finished
products affects the plant production, marketing and sales. The site of the plant
should be located so as it is accessible to the types of transport: road, rail,
seaport, or airport. Road transport is the major transport used for local
distribution from a warehouse. Rail transport will provide cheaper transport of
the product for long distances. Air transport is convenient and efficient for the
movement of personnel and essential equipment and supplies, and the
proximity of the site to a major airport should be considered. The national
roads, bridges, airports and other industrial transportation facilities should be
ensured to be in good condition. This can help to achieve smooth production
and distribution from time to time.
5. Labor Supply
Since it determines the work force for operation of the plant, the
availability and type of labor within the vicinity of the plant is very important.
The plant should be situated in a location where large number of workers is
available. Labor will be needed for construction of the plant and its operation.
Skilled construction workers will usually be brought in from outside the site
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area, but there should be an adequate pool of unskilled labor available locally;
and labor suitable for training to operate the plant. Skilled tradesmen will be
needed for plant maintenance. Local trade union customs and restrictive
practices will have to be considered when assessing the availability and
suitability of the local labor for recruitment and training.
Ensuring the workforce and their competence is an investment to the
company. They must meet the requirements to the production personnel,
administrators, and sales and marketing officers. Ensuring the workforce and
their competence is an investment to the company. Trainings must be conducted
for their development and increased efficiency.
6. Availability of Utilities
These are important for plant operation because the whole plant is
dependent to the supply of energy such as electricity and fuel and continuous
supply of water. Energy must be readily available and alternative sources must
be considered in cases of power interruptions or other emergencies. Adequate
supply of electricity and fuel is necessary; without them the operation will be
affected greatly. In cases of water, fuel or electrical shortage, alternative
sources must be considered.
The plant uses water for several operations such as cooling, washing,
energy generation, and maintenance. The location must have an ample supply
of water from natural or manmade sources. Water sources include bodies of
water such as lake, river, bay, or deep well. In cases of water shortage,
alternative sources of water must be considered. Water may also be purchased
from a local authority. Without the sufficient amount, the operation will halt
resulting to loss in revenues and income.
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7. Environmental Impact and Effluent Disposal

All industrial processes produce waste products, and full consideration
must be given to the difficulties and cost of their disposal. The disposal of toxic
and harmful effluents will be covered by local regulations, and the appropriate
authorities must be consulted during the initial site survey to determine the
standards that must be met. The plant location must have adequate capacity and
facilities for correct waste disposal and water treatment facility to avoid water,
air pollution, and other forms of pollution.
This is in compliance to the government laws of environmental
protection that mandates companies to have a correct waste disposal and a
cleaner working area. Water used in operation must be treated before disposal
especially because the company generates wastewater that contains harmful
chemicals. Gases used for operation must be treated too prior to disposal.
8. Climatic Condition
The climate of the plant also affects the production and transport of raw
materials and the delivery of product. Adverse climatic conditions at a site will
increase costs. Abnormally low temperatures will require the provision of
additional insulation and special heating for equipment and pipe runs. A cold
climate increased costs of necessity for construction of protective shelters
around the process equipment. Stronger structures will be needed at locations
subject to high winds (cyclone/hurricane areas) or earthquakes. The
transportation of raw materials during rainy seasons can be delayed. Hence, the
plant site should be less vulnerable to climate fluctuations, away from the
course of typhoons and away from active fault lines or volcanoes. Even though
it is impossible to predict the occurrence of catastrophes such as typhoons, it is
still essential to consider this factor.
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9. Special Business Incentives

Special business incentives add interest to investors in choosing the
place as plant locations. This decreases the taxes and other production
expenditures of the company, which in turn affects the cost of the product and
profitability. The Republic Act no. 7916 or also known as the “Special
Economic Zone Act of 1995 states in Article II Section C that, “Incentives
granted by PEZA shall apply only to registered Ecozone companies and only
during the period of their registration with PEZA. Export enterprises registered
under the Export Processing Zone Authority shall continue to enjoy their
current incentives. However, PEZA enterprise who’s Income Tax Holiday has
already expired will be subject to the special 5% tax rate as provided in the
Act.” If the plant site chosen is not registered in PEZA, the company will have
tax right affront of the operation date. Hence, this should be given due
consideration in selecting the plant location.
10. Living Condition and Expansion Possibilities

Living condition of the area is important because it will reflect the
future status of the business if it will last longer and stronger. The expansion
possibilities depending on the area surrounded by the plant which are those
citizens living near the plant. Their approval is needed in expanding the
facilities of the plant.
Having considered all of the aforementioned constraints in selecting the
most appropriate plant location, the top three candidate sites seen to meet the
criteria for plant location are selected. The three sites are thoroughly studied,
considering their background, topography, labor data, and other vital
information that aided it the selection of the best location for the plant.
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11. Land Cost

Land cost is important when considering a plant location as it is also a
parameter to consider when planning to expand your plant in order to
support the growing demand of the product.
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LOCATION 1
CEBU SOUTH ROAD PROPERTIES ECONOMIC ZONE, SOUTH

RECLAMATION PROJECT, CEBU CITY
Plant Location Background
The Cebu South Road Properties (SRP) is the name of a 300 hectare
island-type reclamation area located on the southern area of Cebu City, near
Barangays Mambaling, Inayawan, and Pasil. It spans from the shore of
mainland Cebu to Kawit Island (now Kawit Point). It is connected from
mainland Cebu by the Cebu South Coastal Road and the Mambaling Access
Road.
The whole reclamation area is served by a two way, six lane divided
road called the Cebu South Coastal Road which is a national road. The CSCR
also serves as a diversion road from Talisay City to Downtown Cebu City. As
traffic is not seen in the whole boulevard of CSCR, Cebuanos often informally
call it as the Cebu South Expressway, which is not an expressway. A large part
of the boulevard has the Cebu Strait on its eastern side and a large array of
developments on the western side. The reclamation area is connected to the
downtown Cebu City through the Cebu City Coastal Bridge along the Cebu
South Coastal Road.
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Figure 3.1: Map Showing the Location of the Cebu South Road Properties
Economic Zone
Figure 3.2: Vicinity Map of Cebu South Road Properties Economic Zone
1. Raw Material Proximity
The raw materials used for the production of Epsom Salt are dolomite
and sulfuric acid.
Dolomite
The Epsom Philippine Corporation’s supply of dolomite will be coming

from the JFE Mineral Company Ltd., Philippine Mining Service Corporation
located in 5th Floor, Mercedes-Benz Tower, Mindanao Avenue, Cebu Business
Park, Cebu City, with a distance of 7.8 kilometers and 20 minutes travel time to
the location of the plant.
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Sulfuric Acid
The supply of Sulfuric Acid will be coming from TNC Chemicals

Philippines, Inc., located in Turbina, Laguna, with a distance of 783 kilometers
and travel time of 21 hrs via ferry to the location of the plant.
Dolomite
The dolomite will be purchased from JFE Mineral Company Ltd.,

Philippine Mining Service Corporation located in 5th Floor, Mercedes-Benz
Tower, Mindanao Avenue, Cebu Business Park, Cebu City. The supply needed
for the dolomite is 58,055.545 kg/day.
Sulfuric Acid

Philippines, Inc., located in Turbina, Laguna. The supply needed for the
sulfuric acid is 37,400.549 kg/day.
3. Accessibility to the Target Market
The target market for Epsom salt is mainly agriculture. This industry is
located mostly in Cebu City, which is accessible for transport from Cebu South
Road Properties Economic Zone. The target market is within Cebu City which
is 5.6 kilometers away from Cebu South Road Properties. The potential client
of the Epsom Philippine Corporation is the Atlas Bonanza Chemicals located in
Tabunoc, Talisay City, Cebu which is 4.8 kilometers away or 9-minute drive
from Cebu South Road Properties, Cebu, the location of the plant.
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Figure 3.3: Map Routes of Cebu South Road Properties to Target Market and
Raw Material Sources to Cebu South Road Properties
(Source: Google Maps)
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The whole reclamation area is served by a two way, six lane divided
road called the Cebu South Coastal Road which is a national road. The CSCR
also serves as a diversion road from Talisay City to Downtown Cebu City. As
traffic is not seen in the whole boulevard of CSCR, Cebuanos often informally
call it as the Cebu South Expressway, which is not an expressway. A large part
of the boulevard has the Cebu Strait on its eastern side and a large array of
developments on the western side. The reclamation area is connected to the
downtown Cebu City through the Cebu City Coastal Bridge along the Cebu
South Coastal Road.
The SRP will be served by a network of thoughtfully-designed roads –

the South Coastal Road, primary roads and an internal road network made up of
service and collector roads. All properties within the site will be accessible
through this network.
The site will be a showcase of the Bus Rapid Transit System (BRTS), a
high-efficiency public transportation system that allows hassle-free transfers
between major points within the site. The SRP BRTS will connect with a
planned citywide BRTS.
The BRTS, a fleet of bi-articulated buses making designated stops

within the area at short, predictable time intervals and operating on dedicated
lanes, is designed with the convenience of end-users as its primary aim. An
efficient commuter system will allow smooth commuter flows within the area
resulting in more economic activity and, consequently, better business volumes
for commercial area locators.
A functional BRTS, coupled with an efficient private transport

regulation system will make the SRP a commuter- and environment-friendly
development hub, another first in the history of the Philippines.
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Entry/exit to and from the SRP is through four points: the SRP
causeway, the Talisay City access point, Pardo-Tagunol access road and the
Mambaling access road. The BRTS and the SRP road infrastructure will be
planned around these entry/exit areas.
5. Labor Supply
The total population of Cebu is 2,849,213 based on the 2015 Population

census conducted by the Philippine Statistics Authority (PSA).The available
population for labor is 1,403,475 that are summed up in the table below.
Table 3.1: Minimum Wage Rates by Sector and Region, Philippines as
of November 2019, in Region VII
Indicator Sector
Non - Agriculture Retail/Service
Plantation Non - New New
Agricultur
Plantation Minimum Minimum
e
Wage Wage
(Employin (Employing
g 10 Less Than
Workers 10 Workers)
& Above)
Cebu ₱366.00 ₱348.00 ₱368.00 ₱386.00 ₱376.00
Table 3.2: Data of Labor Force in Cebu, Philippines as
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of May 2010 (Bulacan Quickstat – June 2017)
Labor Supplies
High School Graduate 918440
Post-Secondary Graduate & 28,276
Undergraduate
College Undergraduate 226,205
Academic Degree Holder 228,094
Post-baccalaureate 2,460
Total 1,403,475
Number of Unemployed
Unemployment rate=
Labor force
No. of Unemployed = labor force × unemployment rate

Unemployment rate = 4.6 %
(Source: Philippine Statistics Authority; Labor force survey October 2017)
No. of Unemployed = 0.046 × 1,403,475
No. of Unemployed = 64,559 persons
Mactan Rock’s biggest water system is a 22,000 Cubic Meter per Day
(CMD) seawater facility in South Road Properties-Cebu City which supplies
SM seaside and City de Mari of Filinvest. Mactan Rock also has a brackish
water facility installed in Waterfront Hotel and Casino supplying the hotel
requirements and this is also distributed to Cebu Buisness Park supplying Ayala
Mall and Cebu Holdings. Mactan Rock also has a 2,000 CMD sea water system
installed in Mabolo-Cebu which supplies SM City, Radission Blu and APM
Mall. Similarly, a 2,000 CMD system is on-going installation in SM Iloilo,
which is an expansion from the existing water supply of 600 CMD. Our
equipment is being expanded to match the growing requirement of SM Iloilo as
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the mall expands. Mactan Rock can supply water at a rate of Php 40.00 per
cubic meter.
The city mostly gets its power from an interconnection grid with the
Leyte Geothermal Power Plant, which also powers the majority of the Visayas,
Cebu is also powered by a coal-fired thermal plant with two units each
generating 52.5-MW and 56.8-MW, a 43.8-MW diesel power plant and 55-MW
land-based gas turbine plants located at the Naga power complex which is
planned to be rehabilitated and replaced with 150-MW coal units by 2016 and
to be completed by 2019. Leyte Geothermal Power Plant supplies electricity to
South Road Properties by Php 3.0384/kWh.
Telecommunication facilities, broadband and wireless internet

connections are available and are provided by some of the country's largest
telecommunication companies.
In 1998, the 15-hectare (37-acre) Inayawan Sanitary Landfill was

constructed to ease garbage disposal within the city. After 15 years, the landfill
reached its lifespan and the Talisay city government recently allowed Cebu to
temporarily dump its garbage in its own 2-hectare (4.9-acre) landfill. In 2015,
Cebu appropriated a total of ₱2.5 million to close and rehabilitate the landfill at
Inayawan.
The Bio Nutrient Waste Management Inc. is putting its efforts in waste
disposal and waste management facilities in order to optimize the function of its
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water and wastewater facilities and sewer system through advanced technology
and management solution.
Cebu has a tropical monsoon climate under the Köppen climate

classification. The city has a lengthy wet season and a short dry season, with
only the months of March and April falling into the latter season. Average
temperatures show little variance during the year with average daily temps
ranging from 27 °C (81 °F) to 29 °C (84 °F). The city on averages experiences
roughly 1,700 millimetres (67 in) of precipitation annually.
Cebu South Road Properties is registered to Philippine Economic Zone

(PEZA). PEZA registered enterprises may avail of the following incentives and
benefits:
 Income Tax Holiday (ITH) for 4 years to a maximum of 8 years

 After the lapse of ITH, exemption from national and local taxes, in lieu
thereof, special 5% tax rate on Gross Income
 Exemption from duties and taxes on imported capital equipment,
spare parts, materials and supplies
 Tax credit on domestic capital equipment
 Tax and duty free importation of breeding stocks and genetic
materials
 Additional deduction for training expenses such as labor and
management
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 Additional deduction for labor expense (50% of wages

corresponding to increment in number of direct labor subject to
certain conditions)
 Exemption from wharf age dues, export tax impost or fees
 Simplified import- export procedures
Cebu South Road Properties is situated near many residential areas and
condominium units. San Remo Oasis Cebu, developed by Filinvest
Development Corporation provides home for those who are located near SRP.
The houses and units here are two bedrooms and go between 3 to 4 million
pesos depending on their location, size, and their finishing. On average, the
houses are 29 square meters which is a standard space even for upcoming
families looking for a place within the city.
Amalfi at Citi De Mare, also developed by Filinvest Development

Corporation is also located in the Cebu South Road Properties. This medium
rise condominium building has a total land area of 390,000 square meters. This
cluster of 5-storey buildings is part of a low-density community with
approximately 65% of the property allocated for open spaces and landscaped
greens. With 20-meter-wide landscaped walkways and bike lanes and car-free
zones, Amalfi Oasis is a relaxing, pedestrian-friendly community.
Cebu South Road Properties is a 300 hectare land; hence plant

expansion is possible to support the demand for the product.
11. Land Cost
The average cost for industrial land in Cebu South Road Properties is
Php 4,453 per square meter.
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LOCATION 2
WEST CEBU INDUSTRIAL PARK ECONOMIC ZONE, ARPILI &

BUNOY, BALAMBAN, CEBU
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The thriving industrial community in the western coast of Cebu as well

as the movement of industries in Cebu to new Integrated Industrial Centers in
the countryside saw the development of the West Cebu Industrial Park (WCIP),
a 268-hectare industrial estate ideal for medium to heavy industries, particularly
fitted for ship building and allied activities.
The 268-hectare estate is a project of Cebu Industrial Park Developers,

Inc. (CIPDI), a joint venture between the Aboitiz Group and Tsuneishi
Holdings, Inc. of Japan, is located in the Cebu western coastal town of
Balamban.
CIPDI staunchly supports sustainable development for its stakeholders.

Paramount to its pursuit of world-class competency is the protection of the
environment and addressing the social needs of surrounding communities.
West Cebu Industrial Park – The Provincial Physical Framework Plan

1993-2003 (PPFP) of Cebu Province identified Balamban as one of the top
qualified sites for the establishment of Industrial Estate.
The study on the Cebu Integrated Area Development Master Plan

(CIADMP) identified “industrialization” as focal strategy for the take-off of the
Cebu economy and indicated the development of a western sea-board along the
"Toledo-Balamban-Asturias corridor" as the new industrial core.
Consistent with these policy directions, the West Cebu Industrial Park
(WCIP) was established at the Municipality of Balamban in 1992. This covers
the two barangays of Arpili and Buanoy. WCIP was initially planned for
medium and heavy industries, especially for shipbuilding and allied activities.
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As of 4th quarter of 2009, there are nine (9) companies operating within
the zone with a total manpower complement of 14,000 employees mostly from
the shipbuilding and support activities of existing locators and affiliates.One of
the positive impacts brought about by the establishment of WCIP is the
generation of opportunities for employment and small-time business enterprises
for local residents.
WCIP is registered as a Special Economic Zone under the Philippine

Economic Zone Authority (PEZA). Its locators are enjoying the tax incentives
and other privileges being a PEZA-registered import/export enterprise.
Figure 3.4: Map Showing the Location of the West Cebu Industrial Park
Economic Zone
The raw materials for the production of Magnesium Sulfate

Heptahydrate or Epsom salt are Dolomite and Sulfuric Acid. The Epsom
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Philippine Corporation’s supply of dolomite will be coming from the

Tower, Mindanao Avenue, Cebu Business Park, Cebu City, with a distance of
51.8 kilometers and travel time of 1 hour and 32 minutes.

and travel time of 20 hours and 4 minutes via ferry.
Dolomite

Sulfuric Acid

located mostly in Cebu City, which is accessible for transport from West Cebu
Industrial Park. The target market is within Cebu City which is 52.8 kilometers
away from West Cebu Industrial Park. The potential client of the Epsom
Philippine Corporation is the Atlas Bonanza Chemicals located in Tabunoc,
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Talisay City, Cebu which is 50.3 kilometers away from the plant location or 1
hr and 30 minutes driving time.
Figure 3.5:
Map Routes of Cebu South Road Properties to Target Market and Raw
Material Sources to Cebu South Road Properties
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West Cebu Industrial Park is paved by concrete roadways, 14m wide

with complete curb and gutter. The park has 2.2 hectares parking facilities, four
helipads at 10 diameter wide to accommodate visiting VIP’s transported by
aircraft. The park also has different shipping and transport services for different
types of items.
5. Labor Supply

Indicator Sector
Agricultur
e
Wage Wage
g 10 Less Than
Workers 10 Workers)
& Above)
Cebu ₱366.00 ₱348.00 ₱368.00 ₱386.00 ₱376.00
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Labor Supplies
Undergraduate
Total 1,403,475
Unemployment rate=
Labor force

No. of Unemployed = 0.046 × 1,403,475
FACED WITH a 15,000-cubic-meter deficit in water supply daily, the

Metropolitan Cebu Water District (MCWD) is tapping suppliers for additional
volume to improve service in several areas experiencing low pressure to no
water supply. MCWD, in a statement on Monday, said they are ready to accept
the additional volume from existing bulk suppliers as well as the offer of
Mactan Rock Industries Inc. (MRII). “MCWD is ready to accept the 2,500
cubic meters per day in Mactan and 2,000 cubic meter per day from the Cebu
City plant of MRII. Also, MRII offered to treat the wells in Apas that are
affected by high levels of nitrate,” MCWD said. MCWD General Manager Jose
Eugenio Singson Jr. said that once the water district determines that the
treatment price is acceptable, it will enter into an agreement with MRII.
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MCWD’s average daily production of 238,000 cubic meters has gone down due
to the dry spell and the lowering of water levels of its Jaclupan facility and the
Buhisan Dam. The park has a total 2 potable water tanks with capacity of 1,200
cubic meters of potable water storage tanks with a distribution current of 45
pounds per square inch. MCWD is currently charging Php 34.20 per cubic
meter.
Stable power supply is also supplied within the park by 13.8kv line &
69kv line, 58MVA power substation with 13.8KV distribution line. The main
power distributor in West Cebu Industrial Park is Balamban Enerzone
Corporation.
West Cebu Industrial Park has different waste management disposal

facilities like Alry Waste Management Solutions, Bio Nutrient Waste
Management Inc., Zeebu Waste Management, and MRC Solid Waste
Management to accumulate 25 cubic meters per day capacity to process
domestic waste.

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West Cebu Industrial Park is registered to Philippine Economic Zone

benefits:

materials
management
certain conditions)
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Verona Subdivision By Priland is strategically located in the industrial

hub of West Cebu. It is situated around 200 meters from Gaisano and
relatively 2-3 minutes ride to the Public Market via tricycle. Relatively
walking distance to the heart of Poblacion, Balamban, accessibility is at its
best.
West Cebu Industrial Park Economic Zone is a 268 hectare land; hence,
plant expansion can be made possible in order to accumulate the possible
number of production for the optimum product.
11. Land Cost
The average cost for industrial land in West Cebu Industrial Park is Php
6000 per square meter.
LOCATION 3
MACTAN ECONOMIC ZONE, LAPU – LAPU CITY, MACTAN, CEBU
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Cebu owes its rank as an international economic center largely to the

presence of the Mactan Export Processing Zone in its immediate vicinity. While
the city’s economy has certainly moved beyond the narrow confines of MEPZ,
the Mactan zone in many ways remains the flagship of Metro Cebu’s position
as a global city. MEPZ is one of the Philippines’ four classic public sector
Export Processing Zones.
In 1996, under a P2.78 billion modernization project funded by Japan’s

Overseas Economic Cooperation Fund, the Mactan-Cebu International Airport
upgraded its terminal with facilities at par with world standards and regulations.
In 2018, the Mactan Cebu International Airport Terminal 2 was

inaugurated. The terminal was one of the projects under the government’s
public-private partnership program and was only 16 percent complete when it
was chosen as one of the projects under the Duterte administration’s “Build,
Build, Build” infrastructure initiative.
MEZ – 1, a 120 hectare industrial zone has started this transformation

program of PEZA with the building of 7,500 square meters integrated
development called “Mahi” by AppleOne Properties, Inc.
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Figure 3.6: Map Showing the Location of the Mactan Economic Zone
The raw materials for the production of Magnesium Sulfate

Heptahydrate or Epsom salt are Dolomite and Sulfuric Acid. The Epsom
Philippine Corporation’s supply of dolomite will be coming from the
Tower, Mindanao Avenue, Cebu Business Park, Cebu City, with a distance of
11.9 kilometers and 26 minutes travel time.

and travel time of 21 hrs via ferry.
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Dolomite

Sulfuric Acid

located mostly in Western Visayas, which is accessible for transport from
Mactan Economic Zone. The target market is within Cebu City which is 15.6
kilometers away from Mactan Economic Zone. The potential client of the
Epsom Philippine Corporation is the Atlas Bonanza Chemicals located in
Tabunoc, Talisay City, Cebu which is 12 kilometers away or a 22 minute drive
from Cebu South Road Properties, Cebu, the location of the plant.
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Figure 3.7: Map Routes of Mactan Economic Zone to Target Market and Raw
Material Sources to Mactan Economic Zone
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Mactan Economic Zone is near the Mactan - Cebu International Airport

which makes it easier to transport materials by airplane. The Mactan Economic
Zone is also near ports for transport of materials by ferry. The place has also 4 4
– lane concrete pavement, 22 meter wide main road, and 2 lane concrete
pavement 14 meter wide secondary road making it easier to access by different
land vehicles.
5. Labor Supply

Indicator Sector
Agricultur
e
Wage Wage
g 10 Less Than
Workers 10 Workers)
& Above)
Cebu ₱366.00 ₱348.00 ₱368.00 ₱386.00 ₱376.00
219
Labor Supplies
Undergraduate
Total 1,403,475
Unemployment rate=
Labor force

No. of Unemployed = 0.046 × 1,403,475
The Mactan Economic Zone is supported by potable waterlines with

400 cubic meter water tank, non – potable waterlines with 800 cubic meter
water tank supplied by Mactan Rock Industries Inc. Mactan Economic Zone is
supplied with 50 pesos per cubic meter of water.
Power substation with 25 MVA capacity is passed around the zone with
transmission lines and sufficient street lighting. Aboitiz Power is the sole
provider of electricity of the Mactan Economic Zone and the power was taken
mainly from the Tiwi – Makban geothermal Plants in Albay and Batangas and
brought to Cebu via the Visayas grid. NKC, manufacturer of bearings,
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hardware supplies, conveyor and other industrial equipment, also chose

Cleanergy, AboitizPower’s brand of renewable energy. NKC, needs 2.3 MW a
month to power its operations within the Mactan Economic Zone 2 in Lapu-
Lapu City on Mactan Island. The Aboitiz Power supplies electricity to Mactan
Economic Zone at a rate of Php 3.111/kWh.
Mactan Rock Industries Inc. is fully committed to its Environmental

Policy, which includes providing quality products and services that will prevent
pollution and promote waste minimization, specifically on areas of water reuse,
recycling, protection and preservation of the water aquifer and development of
zero waste water discharge technology. The Company strives to meet or
exceed the environmental requirements of the government and other
organizations. Mactan Rock Industries Inc. uses Hydrochloric Acid, Caustic
Soda, Sulfuric Acid, Ferric Chloride, Alum, Polymeric Coagulants, Flocculants,
Oil Absorbent Products, Enzymes – Odor Eliminator, Bacteria Implant and
Anti-foam in wastewater treatment.

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Mactan Economic Zone is registered to Philippine Economic Zone

benefits:

materials
management
certain conditions)
Mactan Economic Zone was situated near different residential areas like
Sheraton Cebu Mactan Residences and One Pacific Place Condominium
Complex. The Residences at The Sheraton Cebu Mactan Resort offer an
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unparalleled world of luxury and convenience for the highly discerning.

Stunning beaches, an array of exhilarating activities and fascinating cultural
experiences are all within reach, allowing residents to enjoy the best of resort-
style living in a sanctuary of tranquility and beauty.
The impressive 22-storey main tower features a beautiful, open-air,

resort-style lobby and has a maximum of six residences per wing to provide
utmost privacy. Decadent steam rooms, a state-of-the-art fitness center, an
exclusive courtyard garden and pool lounge, a dedicated amenities floor, and a
host of other inventive features grant residents access to the ultimate lavish
lifestyle.
The long-established Mactan Economic Zone, along with the emergence

of new business districts, has made the region a thriving investment hub and
renowned center for manufacturing. Set to be completed in 2018, the expansion
of Mactan-Cebu International Airport will increase flight capacity and further
stimulate the region’s vibrant economy. The area boasts a multitude of
enlightening cultural sites, natural wonders, stylish shops and exciting nightlife.
Just minutes away from the airport, The Residences at The Sheraton Cebu
Mactan Resort is situated along an immaculate stretch of private beach with
spectacular views of the Hilutungan Channel and Magellan Bay.
The Mactan Economic Zone is a 120 hectares land, thus, plant

expansion is possible to support the demand for the product supplied which is
Epsom Salt.
11. Land Cost

The average cost for industrial land in Mactan Economic Zone is
Php 15,000 per square meter.
223
Plant Location Evaluation
All the factors except for climatic condition, labor supply and business
incentives in the evaluation of the three locations were considered. These three
factors were not considered since all of them are on relatively equal value. The
three possible location sites are graded from a rubric of 1 to 3. 1 being the
highest and 3 being the lowest. The scores given are multiplied to the
corresponding weight. The point average is determined by dividing the
cumulative scores obtained by the total number of weight.
Table 3.7: Summary of Plant Location
Cebu South
Road Properties West Cebu Mactan
Economic Zone, Industrial Park Economic Zone,
Criteria for Plant
South Economic Zone, Lapu – Lapu Remarks
Location
Reclamation Arpili & Bunoy, City, Mactan,
Project, Cebu Balamban, Cebu Cebu
City
Dolomite from Dolomite from Dolomite from
Philippine Mining Philippine Mining Philippine Mining
Service Service Service Cebu South Road
Corporation Corporation Corporation Properties offers
in Mindanao in Mindanao in Mindanao the shortest
Avenue, Cebu Avenue, Cebu Avenue, Cebu distance between
Business Park, Business Park, Business Park, the two raw
Cebu City: Cebu City: Cebu City: materials, which
7.8 kilometers 51.8 kilometers 11.9 kilometers is 790.8
Raw Materials
from Cebu South from Cebu South from Cebu South kilometers,
Availability &
Road Properties Road Properties Road Properties shorter by 55
Proximity
kilometers than
Sulfuric Acid Sulfuric Acid Sulfuric Acid in West Cebu
from TNC from TNC from TNC Industrial Park,
Chemicals Chemicals Chemicals and shorter 2.1
Philippines in Philippines in Philippines in kilometers than
Turbina, Laguna: Turbina, Laguna: Turbina, Laguna: in Mactan
783 kilometers 794 kilometers 781 kilometers Economic Zone
from Cebu South from Cebu South from Cebu South
Road Properties Road Properties Road Properties
Accessibility to the The target market The target market The target market Cebu South Road
Target Market is within Cebu is within Cebu is within Cebu Properties has the
City which is 5.6 City which is 52.8 City which is 15.6 best accessibility
kilometers away kilometers away kilometers away to its target
from Cebu South from West Cebu from Mactan market. It has the
Road Properties. Industrial Park. Economic Zone. shortest distance
from the target
224
Potential client
Potential client Potential client
which is Atlas
which is Atlas which is Atlas
Bonanza market, also to
Bonanza Bonanza
Chemicals is 50.3 the potential
Chemicals is 4.8 Chemicals is 12
kilometers away client.
kilometers away kilometers away
(1 hr and 30
(9 minute drive) (22 minute drive)
minute drive)
Highly Accessible
by land, by plane
and by ferry,
Highly
Mactan Economic
Accessible by
Zone is near the
land and by plane,
Mactan - Cebu
west Cebu
International
Industrial Park is All three
Airport which
paved by concrete locations are
makes it easier to
roadways, 14m highly accessible
transport
wide with but Mactan
materials by
complete curb Economic Zone is
airplane. The
Highly accessible and gutter. The the most
Mactan Economic
by land through park has 2.2 accessible since it
Zone is also near
the Talisay City hectares parking can be accessed in
ports for transport
Transportation access point, facilities, four three different
of materials by
Facilities Pardo-Tagunol helipads at 10 ways. However,
ferry. The place
access road and diameter wide to Cebu South Road
has also 4 4 – lane
the Mambaling accommodate Properties is
concrete
access road. visiting VIP’s nearer to the
pavement, 22
transported by target market so
meter wide main
aircraft. the cost of
road, and 2 lane
transportation is
concrete
The park also has not that
pavement 14
different shipping expensive.
meter wide
and transport
secondary road
services for
making it easier to
different types of
access by
items.
different land
vehicles.
All three are

located in Cebu in
Labor Supply can be greater than 1,403,475. Rate of
Visayas so labor
Labor Supply unemployment is 4.6%, therefore, the number of
supply between
unemployed individuals are 64,559.
the three locations
is just the same.
Cost of Utilities Water is supplied Water is supplied Water is supplied The Cebu South
by Mactan Rock by Metro Cebu by Mactan Rock Road Properties
with Water District with provides the
22,000 cubic with 15,000 cubic 22,000 cubic smallest cost of
meters per day at meters per day at meters per day at utilities even
a rate of Php a rate of Php a rate of Php though the rate of
40.00 per cubic 32.20 per cubic 50.00 per cubic water supply per
meter. meter. meter. cubic meter is
slightly bigger
Leyte Geothermal The Balamban The Aboitiz (by 2.8 per cubic
Power Plant Enerzone Power supplies meter) than the
supplies Corporation electricity to rate provided in
electricity to supplies Mactan Economic West Cebu
225
Industrial Park,
the rate of
electricity per
kWh is a lot
smaller (by
1.7093 and
0.0726/kWh)
electricity to West
than the price of
South Road Cebu Industrial
Zone at a rate of electricity
Properties by Php Park in a rate of
Php 3.111/kWh. supplied in West
3.0384/kWh. Php
Cebu Industrial
4.7477/kWh.
Park and is also
slightly smaller
than the price
supplied in
Mactan Economic
Zone,
respectively.
Environmental The Bio Nutrient West Cebu Mactan Rock is All three location
Impact and Waste Industrial Park fully committed have a good waste
Effluent Disposal Management Inc. has different to its management
is putting its waste Environmental facility except
efforts in waste management Policy, which that the
disposal and disposal facilities includes wastewater
waste like Alry Waste providing quality management
management Management products and facility by Mactan
facilities in order Solutions, Bio services that will Rock Industries
to optimize the Nutrient Waste prevent pollution Inc. might be a
function of its Management Inc., and promote little expensive
water and Zeebu Waste waste because it uses
wastewater Management, and minimization, different
facilities and MRC Solid Waste specifically on chemicals during
sewer system Management to areas of water treatment.
through advanced accumulate 25 reuse, recycling,
technology and cubic meters per protection and
management day capacity to preservation of
solution. process domestic the water aquifer
waste. and development
of zero waste
water discharge
technology.
Mactan Rock
Industries Inc.
uses Hydrochloric
Acid, Caustic
Soda, Sulfuric
Acid, Ferric
Chloride, Alum,
Polymeric
Coagulants,
Flocculants, Oil
Absorbent
Products,
Enzymes – Odor
Eliminator,
Bacteria Implant
and Anti-foam in
226
wastewater
treatment.
Cebu has a tropical monsoon climate under the Köppen
climate classification. The city has a lengthy wet season and
a short dry season, with only the months of March and April All three
falling into the latter season. locations fall
Climatic Condition under Cebu so the
Average temperatures show little variance during the year climatic condition
with average daily temps ranging from 27 °C (81 °F) to 29 is just the same.
°C (84 °F). The city on averages experiences roughly 1,700
millimetres (67 in) of precipitation annually.
 Income Tax Holiday (ITH) for 4 years to a
maximum of 8 years
 After the lapse of ITH, exemption from national
and local taxes, in lieu thereof, special 5% tax rate
on Gross Income
 Exemption from duties and taxes on imported
capital equipment, spare parts, materials and
supplies All three
 Tax credit on domestic capital equipment locations are
 Tax and duty free importation of breeding Economic Zones
Special Business
stocks and genetic materials in Cebu so they
Incentives
 Additional deduction for training expenses enjoy the same
such as labor and management Special Business
 Additional deduction for labor expense (50% Incentives.
of wages corresponding to increment in
number of direct labor subject to certain
conditions)
 Exemption from wharf age dues, export tax
impost or fees
Living Condition Cebu South Road Verona The long- Cebu South Road
and Expansion Properties is Subdivision By established Properties is the
Possibilities situated near Priland is Mactan Economic nearest to Cebu
many residential strategically Zone, along with City which is the
areas and located in the the emergence of target market and
condominium industrial hub of new business is also known to
units. San Remo West Cebu. It is districts, has made have a high
Oasis Cebu, situated around the region a density of
developed by 200 meters from thriving population so it is
Filinvest Gaisano and investment hub considered as the
Development relatively 2-3 and renowned best location
Corporation minutes ride to center for when considering
provides home for the Public Market manufacturing. living conditions.
those who are via tricycle. Set to be
located near SRP. Relatively completed in For expansion
walking distance 2018, the possibilities, the
Cebu South Road to the heart of expansion of Cebu South Road
Properties is a Poblacion, Mactan-Cebu Properties has the
300 hectare land; Balamban, International largest land area
hence plant accessibility is at Airport will (by 32 hectares),
expansion is its best. increase flight thus, plant
possible to capacity and expansion is very
support the West Cebu further stimulate possible in this
demand for the Industrial Park the region’s location.
227
vibrant economy.
Economic Zone is
The Mactan
a 268 hectare
Economic Zone is
land; hence, plant
a 120 hectares
expansion can be
land, thus, plant
made possible in
expansion is
product. order to
possible to
accumulate the
support the
possible number
demand for the
of production for
product supplied
the optimum
which is Epsom
product.
Salt.
Cebu South Road

Properties has the
cheapest price in
land cost per
square meter.
Land cost in SRP
is smaller by
The average land The average land The average land
Php1,547 than
Land Cost cost is Php cost is Php cost is Php
land costs in West
4,453 /sqm 6,000 /sqm 15,000/sqm
Cebu Industrial
Park and also
smaller by Php
10,547 than the
land cost in
Mactan Economic
Zone.
Table 3.8 shows the criteria and the rating assigned in each location,
where the level of importance is from 1-5, 5 being the highest to be assigned in
the most important criterion. The location that will gain the highest calculated
228
score shall be chosen as the manufacturing location. The three locations can be
equally possible but it is important to choose the best location for the plant.
Table 3.8: Plant Location Evaluation
Cebu South Road

Properties West Cebu
Mactan Economic
Economic Zone, Industrial Park
Zone, Lapu –
South Economic Zone,
Level Lapu City,
Reclamation Arpili & Bunoy,
of Mactan, Cebu
Criteria Project, Cebu Balamban, Cebu
Import
City
ance
Calcul Calcul
Calculate
Score ated Score ated Score
d Score
Score Score
Raw
Material 5 5 25 4 20 4 20
Availability
Accessibilit
y to the
5 5 25 3 15 4 20
Target
Market
Transporta
tion 5 5 25 5 25 5 25
Facilities
Labor
4 5 20 5 20 5 20
Supply
Cost of
4 5 20 4 16 5 20
Utilities
Environme
ntal Impact
and 4 5 20 5 20 4 16
Effluent
Disposal
Climatic
2 5 10 5 10 5 10
Condition
229
Special
Business 3 5 15 5 15 5 15
Incentives
Living
Condition
and 2 5 20 4 8 4 8
Expansion
Possibilities
Land Cost 5 5 25 5 25 5 25
Total Score 205 174 179
Table 3.9: Summary of Quantitative Criteria
Cebu South Road West Cebu

Properties Economic Industrial Park Mactan Economic
CRITERIA Zone, South Economic Zone, Zone, Lapu – Lapu
Reclamation Arpili & Bunoy, City, Mactan, Cebu
Project, Cebu City Balamban, Cebu
Raw Material
790.8 845.8 792.9
Availability
230
Accessibility to the
4.8 50.3 12
Target Market
Cost of Utilities 21.0384 19.9477 21.111
Living Condition
and Expansion 300 268 120
Possibilities
The table below summarizes the normalized score and ratings for each
criterion from Table 3.8 . Table 3.11 shows that Cebu South Road Properties
with a normalized score of 4.9612 is the chosen plant location in comparison to
West Cebu Industrial Park with 4.0048 and Mactan Economic Zone with
3.3693.
Raw Data of Plant Lo cation

Treated Data= → Equation1
Highest Raw Data of Plant Location
Normalize Score=[ 1−( TDi−TD lowest ) ] x ( Highest Rating ) → Equation 2
Where:
 TDi = Treated Data of the graded plant location
 TDlowest = Treated Data of the lowest graded plant location
Table 3.10: Plant Normalized Score

Criteria Cebu South Road West Cebu Mactan Economic Zone,
Properties Economic Industrial Park Lapu – Lapu City, Mactan,
Zone, South Economic Zone, Cebu
Reclamation Project, Arpili & Bunoy,
Cebu City Balamban, Cebu
231
Treate Normalized Treated Normal Treated Normalized

d Score Score Score ized Score Score
Score
Raw 0.9350 5 1 4.675 0.9375 4.9875

Material
Availability
Accessibilit .0954 5 1 0.477 0.2386 4.284
y to the
Target
Market
Cost of 0.9966 4.7415 0.9449 5 1 4.7245
Utilities
Living 1 5 0.8933 4.4665 0.4 2
Condition
and
Expansion
Possibilities
Land Cost 0.2969 5 0.4 4.4845 1 1.4845
Table 3.11: Summary of Normalized Scores
Table 3.11 shows the difference in the different criteria for each
location, where the level of importance is from 1-5, with 5 being the highest,
and is therefore the most suitable location for the plant.
Criteria for Weight Cebu South West Cebu Mactan
232
Road Industrial
Properties Park Economic
Economic Economic Zone, Lapu
Plant Location Zone, South Zone, Arpili – Lapu City,
Reclamation & Bunoy, Mactan,
Project, Cebu Balamban, Cebu
City Cebu
Raw Material
0.25 1.25 1.1688 1.2469
Availability
Accessibility
to the Target 0.15 0.75 0.0716 0.6426
Market
Cost of
0.15 0.7112 0.75 0.7087
Utilities
Living
Condition and
0.2 1 0.8933 0.4
Expansion
Possibilities
Land Cost 0.25 1.25 1.1211 0.3711
Total 1.00 4.9612 4.0048 3.3693
PLANT LOCATION EVALUATION
Plant location evaluation plays a major role in choosing where to put

your plant in order to be efficient and economical. Choosing the right plant
location will allow the plant to obtain the desired maximum product in order to
support the demand for the product. Cebu South Road Properties ranked the
highest among the three chosen plant location with a score of 4.9612. The
233
parameters of Cebu South Road Properties are listed below and were obtained
from quantitative and qualitative evaluation.
The nearest supplier of raw material, the dolomite, which is the JFE
Minerals, ltd. is the nearest from Cebu South Road Properties plant location
which is only 7.8 kilometers away. The other raw material, sulfuric acid is also
nearest from Cebu South Road Properties plant location which is 783
kilometers from the raw material supplier.
The target market is also the nearest to Cebu South Road Properties
which is only 4.8 kilometers away from Atlas Bonanza Chemicals. The main
location where agricultural products are often supplied and bought is in Cebu
City, which is only 5.6 kilometers away from Cebu South Road Properties.
Accessible transportation facilities are also available in Cebu South

Road Properties. Different roadways are accessible and are directed to Cebu
City. Airports and ports are also nearby the Cebu South Road Properties.
Cost of utilities are slightly larger than the other location but the cost of
utilities are not prioritized when choosing the plant location because in Cebu
South Road Properties we can benefit from other parameters such as the the rate
of electricity and water that the company can supply to our plant, which we
cannot find from the other two plant location that were evaluated.
Cebu South Road Properties has a very big difference compared to the
other locations that were evaluated because larger lots are available in this
location; also the density of population is higher in this location. Land area of
Cebu South Road Properties is the largest among the three plant location. The
land area of Cebu South Road Properties is 300 hectares, which make plant
expansion more possible, given the sizes of lots that can be used for the
production.
234
Land cost in Cebu South Road Properties is the smallest per square
meter, compared to the other plant locations that were evaluated. If ever the
plant needs to undergo expansion to support a larger amount of production and
the management needs to buy land, land cost in Cebu South Road Properties is
only Php 4,463 per square meter.
With these different criteria being the highest for Cebu South Road
Properties, we conclude that this location is the best for the plant to be able to
have the most cost-effective production for a larger income or profit.
235

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Technological Institute of the Philippines

CRITERIA FOR PLANT LOCATION

2. Raw Material Availability

3. Accessibility to Target Market (Agriculture)

7. Environmental Impact and Effluent Disposal

9. Special Business Incentives

10. Living Condition and Expansion Possibilities

11. Land Cost

CEBU SOUTH ROAD PROPERTIES ECONOMIC ZONE, SOUTH

Plant Location Background

1. Raw Material Proximity

The Epsom Philippine Corporation’s supply of dolomite will be coming

The supply of Sulfuric Acid will be coming from TNC Chemicals

2. Raw Material Availability

The dolomite will be purchased from JFE Mineral Company Ltd.,

The supply of Sulfuric Acid will be coming from TNC Chemicals

3. Accessibility to the Target Market

The SRP will be served by a network of thoughtfully-designed roads –

The BRTS, a fleet of bi-articulated buses making designated stops

A functional BRTS, coupled with an efficient private transport

The total population of Cebu is 2,849,213 based on the 2015 Population

Table 3.1: Minimum Wage Rates by Sector and Region, Philippines as

of November 2019, in Region VII

Table 3.2: Data of Labor Force in Cebu, Philippines as

of May 2010 (Bulacan Quickstat – June 2017)

No. of Unemployed = labor force × unemployment rate

Telecommunication facilities, broadband and wireless internet

In 1998, the 15-hectare (37-acre) Inayawan Sanitary Landfill was

7. Environmental Impact and Effluent Disposal

Cebu has a tropical monsoon climate under the Köppen climate

9. Special Business Incentives

Cebu South Road Properties is registered to Philippine Economic Zone

 Income Tax Holiday (ITH) for 4 years to a maximum of 8 years

 Additional deduction for labor expense (50% of wages

10. Living Condition and Expansion Possibilities

Amalfi at Citi De Mare, also developed by Filinvest Development

Cebu South Road Properties is a 300 hectare land; hence plant

11. Land Cost

WEST CEBU INDUSTRIAL PARK ECONOMIC ZONE, ARPILI &

Plant Location Background

The thriving industrial community in the western coast of Cebu as well

The 268-hectare estate is a project of Cebu Industrial Park Developers,

CIPDI staunchly supports sustainable development for its stakeholders.

West Cebu Industrial Park – The Provincial Physical Framework Plan

The study on the Cebu Integrated Area Development Master Plan

WCIP is registered as a Special Economic Zone under the Philippine

1. Raw Material Proximity

The raw materials for the production of Magnesium Sulfate

Philippine Corporation’s supply of dolomite will be coming from the

The supply of Sulfuric Acid will be coming from TNC Chemicals

2. Raw Material Availability

The dolomite will be purchased from JFE Mineral Company Ltd.,

The supply of Sulfuric Acid will be coming from TNC Chemicals

3. Accessibility to the Target Market

West Cebu Industrial Park is paved by concrete roadways, 14m wide

The total population of Cebu is 2,849,213 based on the 2015 Population

Table 3.3: Minimum Wage Rates by Sector and Region, Philippines as

of November 2019, in Region VII