Why Parag has chosen nishatganj to set up its plant ?

Parag has chosen nishatganj to set up its plant due to the following reasons.

1. Availability of infrastructure facilities

Plant location which is selected must have proper infrastructure facilities. Without good
infrastructure facilities, it will be difficult to do business efficiently. The infrastructure facilities
are the backbone of all industries. Without it, business cannot be done.

Crucial infrastructure facilities that help industries to grow:

 Transport and communications,

 Banking and insurance services,
 Regular fuel supply,
 Continuous supply of electricity and water, etc.
 The production in the parag plant is done on a continuous basis resulting in
production of products and by-products in large quantities so the above
mentioned crucial factors play a very important role in not only production but
also distribution because nishatganj is easily reachable owing to the good
transportation facilities available, it ensures the availability of the above
mentioned crucial factors.

2. Availability of skilled workforce

Plant location must be convenient and easily accessible to skilled workforce. Most businesses require
skilled-labor force such as engineers, management experts, computer programmers, etc. The
entrepreneurs must consider the availability of competent and skillful-workforce at a particular place to
locate their business.
 Parag has a huge pant equipped with various machines which needs engagement of skilled
workforce as well as laborers in order to assist the production and distribution process. There is
a place near by the plant where the laborers group up in search of work so labor is available at a
very cheap rate. Also there are various educational institutions and hostels near by which assure
availability of skilled workforce.

3. Social infrastructure
Plant location must have good a social infrastructure. There is a need for social-infrastructure not only
for employees but also for the development of their families. The availability of social-infrastructure will
increase the employees' welfare.
There must be suitable social infrastructure facilities like;
 Hospitals and health centers,
 Community centers like worship place, garden, meditation center, etc.
 Recreation facilities like theaters, clubs, communication facilities, etc.
 Because all the production and packaging activities are carried out through machines
there are more possibilities of accidents to happen and there are many hospitals in
nishatganj and the near by like Fatima hospital and etc. the general manager told us that
 workers from different-different religion work in the factory who go to worship their
god in between of the production hours for example – muslims go to offer namaz 2 to 3
times, they have many mosques and temples near by the plant where the workers g and
worship their god which helps in increasing concentration level and motivating the
workers.

4. Nearness to market
Plant location must be near a market. Every business unit depends on a market for
selling its goods and services. The goods and services must reach the market on time,
and it must be available to the consumers at a low price. Therefore, this factor is given
importance while selecting location of a plant.
Locating a plant near the market is preferred, when the product is fragile (easily
breakable), perishable, heavy or bulky and when quick service is required.
 Since parag produces milk and milk products in bulk and quick and daily
services are required for the product, nearness to market plays a very important
role. There are many small and big markets near by nishatganj like nishatganj
market itself, mahanagar and etc. which helps in maintaining continuous supply
in the market.

5. Nearness to raw-materials' source

Plant location must be usually near to the source of raw-material. Raw-materials' costs
are about 50% of the total cost. So, it is important in the business to get the raw
materials in time and at a reasonable price. Therefore, a business must be located close
to the source of raw material.
 Parag uses raw milk as raw material though which they produce various
products like ghee and etc. They have set up various small-small collection units
in various villages and etc, where the small farm owners and etc collect the milk
obtained and then that milk is carried to various plants through trucks. In
nishatganj the transportation facility is good as the roads are wide and the
location is at the center of the city so it is easily reachable owing to which the
act of making the raw material available becomes easy.

6. Miscellaneous factors
Availability and cost of land - The manager told us that the plant was established more than 25 years
ago at that time this was the only place which was cost effective and as well was satisfying all the other
needs(mentioned above) as well.
Packaging distribution and delivery system.

Packaging –parag uses modern packaging machines as modern packaging machines are self-cleaning
and provide an aseptic environment for milk packaging. Their improved design has allowed milk to
remain fresh for at least 14 days and has made it possible for use with ultra pasteurizing equipment for
extended shelf-life applications. Similar types of machines are installed in different-different sections of
the plant which are used for the production of by products of the milk like ghee butter and etc.
Materials used- Paper and paper based products, Plastics, Aluminium foil, Timber, Glass and Tinplate.
Types of packages- Cartons, Cup, Sachet/pouch, Can and Barrel.
Distribution and delivery system- for the distribution of the final product parag has 1600
agents and 35-40 vehicle routes through which the final products are sent to various delivery centers
and markets from where it is easily available to the consumers. The final product after being packed is
loaded in trucks through which it is sent to various distribution centers.