Agroindustrial project analysi

140 AGROINDUSTRIAL PROJECT ANALYSISconcerned with locating near the supplier-to lessen the risk ofperishability-and with the quality of the transport service (forexample, speed and refrigeration) than with transport costs. Transportservices deficient in quality or availability may eliminate somedesirable locations. When this occurs, the firm should consider integratingto operate its own transport services. Integration would requirean analysis of the incremental capital investment and thepotential savings in increased reliability.Labor supplyBecause agroindustries do not generally employ many workers,their supply of unskilled labor is not constrained, particularly if theworkers from which the project draws are highly mobile. It is moredifficult, however, to find skilled labor and managerial talent, aconstraint especially acute if the plant is in a rural area. If this isthe case, the firm may have to offer special financial incentives orsocial amenities to attract and retain qualified personnel.Availability of infrastructureBecause defective infrastructure can increase costs and negativelyaffect quality, the agroindustrial firm should consider the facilitiesand services available at alternative locations. Puri and Lamson-Scribner have recommended that a firm examine a location for thefollowing infrastructural aspects of electricity and water supply. 27Electricity* Demand (both actual and projected, to identify possible bottlenecks):plant, community* Source and availability* ReliabilityRecord of interruptions during past year (some utility companiesdo not regard momentary outage as an "interruption";hence, verify the record)27. G. N. Puri and Frank Lamson-Scribner, "Technical Aspects of Appraisal,"EDI Report no. CN439 (Washington, D.C., World Bank, May 1976;processed); also see United Nations Industrial Development Organization(UNIDO), Manual for the Preparation of Industrial Feasibility Studies, Salesno. E.78.II.B.5 (New York, 1978), pp. 54-97; and S. Soderman, Industrial LocationPlanning (New York: Halsted, 1975).