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Cotton Textile industry
In a cotton mill industry one ton of ginned cotton can produce almost one ton of yarn, and one ton of yarn will yield one ton of cloth. Though availability of power is essential, cotton is definitely the major raw material. Therefore in finding out the centre of minimum transportation cost, cotton and the market are the items, which require consideration.
When both market as well as the cotton growing area have equal access to these other factors, the pull of market is usually much more forceful The industry being situated near the market can have better advantages in selling the finished products and can readily know the change of demand or the change of fashions. In the U.S.A., cotton is grown in the Southern States, but the cotton mill industry is localized in the New England States, i.e. in the market.
In Russia cotton is cultivated in the Central Asiatic pap of the country, whereas the cotton mill industry is concentrated in the Moscow industrial region. There is also a cotton industry in Ukraine. In India in spite of original heavy concentration of the cotton mill industry in Bombay and Ahmedabad, situated the cotton growing areas, a phase came when the industry dispersed to various other States of the country. Silk is mostly produced in China and Japan, but silk manufacturing industries are localized in many countries of Europe and in the USA. Wool is produced mostly in Australia but woolen mills are located in various countries of Europe, in Japan, and in the U.S.A.
Deviation from the Minimum Transportational Cost Centre: There are certain special circumstances under which localization of industries may deviate from the minimum transportation cost centres. The following are the instances.
1. Where lighter raw material through human skill yields costly product. A pharmaceutical industry, for instance, produces many costly medicines out of a few jars of chemical. The greater part of the cost is for the processing. The industry needs highly qualified chemists, constant researches and experiments. So, they are usually localized where there are universities and research institutions. India's pharmaceutical industry is localized in Calcutta, Bombay or near Bangalore science institute. Famous watch-making industry of Switzerland, shawl industry of the Kashmir valley is typical examples of labour-skill yielding costly products with lighter raw materials.
2. Lower labour cost area. If in an area labour cost is exceptionally low, the industry may be attracted there, provided that the total saving of labour cost overcompensates the excess of transportation charges. Lower labour charge in the southern states of the USA attracted many industries from the northeastern part of the country. In spite of various advantages of Bombay many cotton mill industries developed in Madhya Pradesh mainly due to lower labour charges there.
3. Planned development. In recent decades National Economic Plans probably play the most vital part in shaping the industrial map of a country. The need of industry's planned distribution is most keenly felt in large countries like the USA, Russia, India and China. For strategic as well as social considerations, the state may desire a balanced distribution of industries in different parts of the country. To achieve such distribution of industries the theory of minimum transportation cost may not be the sole guiding principle.
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