OPERATIONS MANAGEMENT
FACTORS AFFECTING FACTORY
LOCATION
SUBMITTED TO: PROF PRANETI SHAH
BY: MANOJ RAMCHANDANI
ROLL NO: 171225
SECTION: B
About Company
Bajaj Hindusthan Sugar Limited
Bajaj Hindusthan Sugar Limited is a sugar maker in India, allegedly the biggest in the nation. It is an
individual from Bajaj Group. Bajaj Hindusthan Limited is also called as BHL and its headquarters is
situated in Mumbai, Maharashtra.
Bajaj Hindusthan Sugar Limited (BHSL) was established on 23rd November, 1931 under the name The Hindusthan Sugar Mills Limited – an activity of Jamnalal Bajaj - a businessperson, associate,
teach and received child of Mahatma Gandhi. He looked for Gandhiji's favours in this new pursuit,
which, aside from being a sound business suggestion would likewise meet a national need. Till at
that point, there were scarcely thirty sugar plants in the nation.
Golagokarannath a small-town rich in sugarcane Sugarcanes in the district of Lakhimpur Kheri in the
Terai locale of Uttar Pradesh (UP) was chosen for setting up first plant of BHSL.
In 1967, another Company - Sharda Sugar and Industries Limited - was set up as a backup of
Hindusthan Sugar Mills Limited. Under this new backup, a sugar plant with a Sugarcane pounding
limit of 1400 TCD was set up in 1972 at Palia Kalan, an extensive Sugarcane providing focus at a
separation of around 70 kilometres from Golagokarannath. The Hindusthan Sugar Mills Limited was
renamed as Bajaj Hindusthan Sugar Limited in the year 1988 and in 1990, Sharda Sugar and
Industries Limited was amalgamated with Bajaj Hindusthan Sugar Limited.
As of now it is Asia's Number 1 and World's Number 4 coordinated sugar organization It has a total
sugarcane smashing limit of 136,000 tons squashed every day (TCD), and liquor refining limit of 800
kilo liters for each day (KLD) crosswise over 14 areas in the north Indian State of Uttar Pradesh (UP).
The organization is a pioneer in the Asian and Indian sugar industry and is additionally one of the
biggest maker of green fuel ethanol in India.
Major Products Company is Into
Sugar:
The main product of the company is sugar crystals. It has a capacity of 13600 tonnes of
crushing canes per day across 14 locations in UP.
Ethanol:
Ethanol is one of the major by-product in sugar processing units. Ethanol is used in
production of alcohol and BHSL is one of the largest producers of ethanol.
Molasses:
When sugarcanes are processed under repeated crystallization the only by-product which is
obtained is molasses.
Bagasse:
Bagasse is a sinewy build-up of Sugarcane stalk that is acquired subsequent to pounding and
extraction of juice. It comprises of water, fiber and generally little amounts of dissolvable
solids.
Fly ash:
Fly Ash is the remaining yield from the evaporator heater after bagasse has totally worn out.
This fly slag can also be used as an alternative for firewood.
Press Mud:
Press mud, otherwise called oliver cake or press cake, is the remaining yield after the
filtration of the juice.
Site Details
The site chose for the principal plant was at Golagokarannath, locale Lakhimpur Kheri
district in the Terai locale of Uttar Pradesh (UP), a zone rich in sugarcane. The first limit of
the processing plant was 400 tons of Sugarcane smashed every day (TCD). Moving on with
time, this limit was expanded in stages and is presently 13,000 TCD. Gola Gokarannath or
Gola Gokaran Nath is a city, a metropolitan board,and tehsil in Lakhimpur Kheri locale in the
Indian province of Uttar Pradesh. Gola Gokran Nath is popular for its Shiva Temple and BHL
sugar Mill. Gola Gokaran Nath is likewise called 'Chotti Kashi.
Factors that have affected in selection of a
location for a Company
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Soil
Water
Energy
Climate
Transport
Labour
Market
Government
Relating Factors to the Company’s Location
Soil
Sugarcane can grow in any soil ranging from loams, clayey loams, black cotton soils, brown or
reddish loams and even laterites. In fact, sugarcane can tolerate any kind of soil that can retain
moisture. But deep rich loamy soils are ideal for its growth. Uttar Pradesh and especially northern
part of Uttar Pradesh had loamy soils rich in nitrogen, calcium and phosphorus. Moreover, it was
considered that soil in upper gangetic plain were more fertile and also contained potash-lime. Thus,
it can be said that BHL’s decision to open its first plant in Golagokarannath was right in terms of soil
fertility.
Water
Sugarcane is considered to be one of the water intensive crop. It is a 15-month crop thus
requiring more water than wheat, paddy, cotton for one harvesting cycle. But at the same time
while processing sugarcane the industry requirement is negative. As 70% of sugarcane is
water and thus for every tonne 700 litres of water is generated and used for many other
purposes like cooling towers, cleaning of floors, machine and returning the remaining water
back to famers. The presence of Ganga, Yamuna and their tributaries in Uttar Pradesh also
positively added to the location of the company.
Energy
Bagasse is a by-product generated in the sugar making process. It is a fibrous material that
remains after sugarcane is crushed to extract its juice. The ratio of sugar production to
bagasse in terms of tonnes is 10:3. Bagasse when burnt produces sufficient heat energy which
is enough to supply all the needs of sugar factory. In addition to this it can also be used to
generate electricity which is then sold to consumers through power grid. The power produced
through co-generation is useful in substituting the conventional thermal energy and reducing
greenhouse emission. In present scenario when fossil fuel prices are shooting up and when
there is constant non-availability and shortage of coal, the high efficient cogeneration
technology seems to be promising in producing carbon neutral energy as well as in terms of
economic benefit to sugar mills. India’s 527 working sugar mills crush around 240 million
tonnes of cane per year and generate 80 million tonnes of wet bagasse (50% moisture), of
which they consume around 70 million for meeting captive requirements of power and steam.
Climate
Sugarcane is a long span, high water and high supplement requesting crop. Sugarcane is
developed under extensive variety of atmosphere, extending from sub-tropical to tropical
conditions. Temperatures over 50°C and beneath 20°C are not reasonable for its
development. For ideal profitability, it requires 750-1200 mm of precipitation amid its whole
development period. The atmosphere in UP is sticky subtropical with dry winter sort with
parts of Western U.P. as semi-bone-dry sort. In UP amid summers (March to June) the
temperature can run from 38 °C to 45 °C and now and again can go up to 47 °C. Amid storms
(June– September) it gets 85% of normal yearly precipitation of 990 mm.
Transport
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Rail: This town lies on meter gage which is changing over in Broad Gage. The
transformation to expansive gage has been begun in 2016. Along these lines, the
trains are not handling right now on this course. In any case, from Delhi (Old Delhi
and in addition New Delhi stations) one can take a prepare to Shahjahanpur Junction,
which will associate with 6-7 hours travel. From Shahjahanpur one can take a
transport ride to Gola, this will be around 1.30-2 hours travel. Course through
Shahjahanpur is the most mainstream course for individuals going to or originating
from Delhi.
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Road: Gola Gokaran Nath is around 170 km from Lucknow and can be come to by
means of Sitapur and Lakhimpur. This town in 150 km from Bareilly and can be come
to by means of Faridpur, Shahjahanpur and Mohammadi.
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Bus: Regular Ordinary transports keeps running from Anand Vihar ISBT to Gola
Gokarannath. Air conditioning Shatabdi Busses to Gola Gokarannath By UPSRTC is
additionally accessible from Kaushambi Bus Station.
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Plane: Delhi to Lucknow and after that through transport through bus or rail.
 For India's Capital New Delhi: Gola Gokarannath is 386 km a long way from
Delhi and direct transports are accessible from Swami Vivekanand Inter State
Bus Terminus or Anand Vihar Bus stand and Kaushambi Bus remain before
Kaushambi Metro Station from Delhi to Lakhimpur Kheri region by means of
Gola Gokarannath.
Labour
Gola Gokarannath has an aggregate populace of 702,701 out of which guys constitute
369,643 of the populace and females 333,058. The normal proficiency rate is 65.40%, higher
than the national normal of 59.5%: male education is 74.5%, and female proficiency is
55.30%. The business proportion in Gola Gokarannath is around 31%-significance 214900
individuals are at present utilized out of 702.701 individuals. The greater part of the populace
lies between 14-35 years in this way it has heaps of undiscovered potential as far as both
gifted and in addition untalented work and accessibility of vagrant workers likewise helps in
decreasing expense of creation. Also, there are many schools and universities in Gola Gokran
Nath and advanced education is offered at Cane Grower's Nehru Post Graduate College in
Gola, Guru Nanak Degree College, and Guru Harkishan Degree College.
Market
Gur and Khandsari are the main choices as a sweet to Sugar in India. The expansion in per
capita sugar utilization has been to the detriment of Gur and Khandsari utilization. The use of
sugarcane for delivering sugar when contrasted with Gur and Khandsari is a significant
pointer of the move in utilization patterns. In 2006, the drawal rate (which demonstrates the
utilization of sugarcane for sugar creation as a percent of aggregate sugarcane generation)
was 68 percent which was an untouched high. This has been an inversion in slant from the
1960's, the point at which the drawal rate was at 30 percent. The level of stick utilized for
biting and different purposes has remained to a great extent steady finished the years. Sweet
meat sellers represent an expected 58 percent of the aggregate sugar utilization, among
private venture. In addition, Restaurants and tea/bistros represent an expected 22 percent and
17 percent of the sugar utilization, with the rest being represented by juice focuses, sweet
shops and comparable foundations.
Government
Given the vast number of ranchers with little landholdings associated with cultivating
sugarcanes, sugarcane should be directed. Sugarcane is additionally progressively being seen
as a key yield due to the development of ethanol and cogeneration. In this way, the costs of
sugarcane are intensely controlled by government. The fare and import of sugar is chosen by
the legislature relying on the residential request. Notwithstanding that the factory proprietors
must give 10% of their generation to the focal government which they use to supply to the state
governments for their state Public Distribution Systems (PDSs). Alternate items, for example,
Molasses, Bagasse, Press Mud are extremely helpful side results of sugar industry. Their
compensation to the rancher is not settled and changes with the time. In addition, sugar is
incorporated into basic products act by the legislature. In this way, one might say that it is
impractical for a solitary market player to control the costs since it is vigorously managed by
government and costs are pretty much settled and prompts a solid rivalry.
Conclusion- Pros & Cons of the Location.
The selection of a particular site depends upon many factors such as transportation facility,
availability of raw material, climate and many more. It is necessary for a company to evaluate
each and every factor in detail and link it to location which is being considered. In this project,
we are talking about BHSL-Bajaj Hindusthan Sugar Limited. BHSL is planning to establish a
plant in Golagokarannath a small town in the Lakhimpur Kheri District of Uttar Pradesh. Many
factors are considered while selecting this site. These factors include-








Soil
Water
Energy
Climate
Transport
Labour
Market
Government
While evaluating these factors it was seen that in Golagokarannath the soil fertility was rich
in terms of nitrogen, calcium and phosphorus and was suitable for sugarcane cultivation. In terms of
availability of water also it had enough resources in terms of Ganga, Yamuna and its tributaries.
Moreover, in terms of energy it had extra advantage in terms of cogeneration of heat with the help
of bagasse. The climate was also suitable for sugarcane production with average rainfall of 990mm.
It also had enough transport facilities with rail and busses having frequent connectivity. The labour
market was also of cost beneficial and but at the same time large number of population was
unemployed and literacy rate was also increasing which meant that there were high chances of
labour rate going up. The market demand was increasing with more and more number food
industries using sugar in their production. But at the same time Gur and Khandsari were still
considered to be alternatives to the sugar. Finally, the intervention of government was considered
good for the sugar industry as it regulated the prices but at the same time control and power was
decreasing from the hands of sugar industrialists and profit margins were also decreasing. Thus, a
little bit more liberalized approach was needed in regulation of sugar industries.
References
1. http://www.bajajhindusthan.com/by-products.php
2. http://mrunal.org/2013/07/location-factors-sugar-mills-north-south-indiacuba-called-sugar-bowl.html#maha
3. http://www.czarnikow.com/news/04/09/13/sugarcane-production-andwater-risks-longer-term-view
4. http://www.birla-sugar.com/Our-Products/Bagasse-CogenerationRenewable-Energy
5. https://agrocommodities.wordpress.com/sugar/sugarcane-growthcycleindia/
6. https://en.wikipedia.org/wiki/Gola_Gokarannath
7. http://www.neighbourhoodinfo.co.in/city/Uttar-Pradesh/Kheri/GolaGokaran-Nath
8. http://www.in.kpmg.com/pdf/indian_sugar_industry.pdf