Choosing an Anchor Industry for a 60-Hectare Estate
A district produces 380,000 tonnes of sugarcane in a four-month crushing season, 130,000 tonnes of potato, and 320,000 litres of milk a day. A 60 ha serviced industrial estate lies 18 km from a national highway and 40 km by rail from a city of 1.2 million. Industrial power is available for about 17 hours a day. Existing cold storage in the district holds 9,000 tonnes. At present 60% of the potato and most of the milk travel 110 km to a mandi; measured post-harvest loss is 22% for potato and 8% for milk. Sugarcane must be crushed within about 24 hours of harvest. The nearest sugar mill is 55 km away and runs at 70% of installed capacity. The state wants one anchor unit in the estate and has shortlisted a sugar mill, a potato-processing plant and a dairy chilling plant.
1. Which of the three should anchor the estate? Argue from weight-loss, perishability and the numbers given, and then state the strongest objection to your own choice.
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Choice: the potato-processing plant.
Weight-loss test. Sugarcane is the textbook weight-losing raw material: only about 10–11% of cane weight is recovered as sugar, the rest leaving as bagasse, molasses and water. That normally anchors a mill in the field. But the district already has crushing capacity 55 km away running at only 70% - a new mill would split a fixed 380,000 t supply and leave both plants underutilised.
Perishability test. Milk is the most perishable, but only 8% is lost and it is comparatively high-value per litre, so it can bear a 110 km journey to a chiller. 320,000 L/day is well within a modest chilling plant's scale and does not need 60 ha of serviced land.
Loss test. Potato loses 22% of 130,000 t - about 28,600 t a year - and storage covers only 9,000 t (about 7% of the crop). That is the largest identified value leak in the district, and it is fixable at the estate.
Strongest objection to my own choice: a potato plant needs reliable power, and the estate offers 17 hours. A cane mill, running only in season, might tolerate interruptions better. The objection is answerable with a captive generator or dedicated feeder. The cane-oversupply problem is not answerable at all.
2. A proposal argues that on raw-material grounds alone the sugar mill must be built. Assess how much weight 'raw material' should carry given the existing mill at 70% capacity.
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Raw material should carry a lot of weight - but as a siting factor, not as a veto.
Why it matters normally: cane is weight-losing and deteriorates quickly (sucrose falls after cutting), so transport cost per tonne of sugar is high and the 24-hour rule is real. That is why mills historically sit inside the cane belt, and it is a sound default.
Why it is not decisive here:
- The cane already has an outlet. A mill 55 km away at 70% capacity can absorb more cane. Adding a mill 18 km away does not create a single extra tonne of cane; it reallocates 380,000 t between two plants, and both may drop below the 60–70% utilisation needed to cover fixed costs.
- 55 km is not prohibitive. It is at the upper edge of the conventional cane catchment but workable on metalled roads; the 24-hour rule is tight, not impossible, over that distance.
- The other raw materials have worse economics. 22% of the potato crop is being lost outright - a certain loss, against a hypothetical transport saving on cane.
Judgement: raw material is a strong reason for placing a mill within the cane belt rather than in a distant city; it is not a reason to duplicate capacity that already exists. The decisive deficit in this district is the cold chain.
3. Which single infrastructure investment would produce the largest measurable reduction in value lost, and how would you demonstrate the gain rather than assert it?
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Investment: expand cold storage at the estate.
Reasoning from the numbers. Potato output is 130,000 t and post-harvest loss is 22%, i.e. about 28,600 t lost each year. Existing capacity of 9,000 t covers roughly 7% of the crop, so almost the entire harvest is exposed at the glut. Raising capacity to about 30,000–35,000 t, sited on the highway near the fields, would remove a substantial share of that exposure - of the order of a quarter to a third of the lost volume - and it is the only proposal addressing a loss that is already quantified.
The constraint to design around: 17 hours of power a day. A cold store needs near-continuous supply, so pair it with a dedicated feeder, captive generation or solar-plus-backup. A store that cannot hold temperature is worse than none, because it invites investment in a crop that then spoils.
How to demonstrate rather than assert:
- Tonnes stored per season (baseline 9,000 t capacity).
- Post-harvest loss re-measured at the same points in the chain - field, transit, mandi - using the same method as the 22% baseline.
- The price differential between harvest-glut sales and off-season sales for stored lots.
Avoid claiming credit through gross output or acreage; those move with rainfall, prices and policy and cannot be attributed to the store.