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Where are they located?

The plant is located in the North East of England, near to Middlesbrough. The actual location is part of a large industrial complex that houses a number of major chemical producers as well as oil refineries and gas suppliers. The North Sea is nearby, as is the River Tees.

The location is an important aspect for DSS. Being sited in and around one of the largest concentrations of chemical plants in the UK, DSS gains a number of benefits, which are called external economies of scale.

External economies of scale are the advantages of large scale production that result in lower unit or average cost. These benefits are generated because of the growth of the industry as a whole in the region. As a result of this, DSS gains benefits in a number of ways:

• Waste Disposal:
  • An effluent pipeline has been constructed to carry water-based waste to specialist treatment plants nearby. DSS is able to plug into this pipeline to dispose of some of its waste. The cost of doing this is far less per unit of waste than if it had to build the pipeline itself or if it had to dispose of its own wastes by alternative routes (for example, by use of road tankers to transport the waste to the effluent treatment plant). As a result of the pipeline, DSS has been able to take an incinerator that is on the site out of commission. Specialist treatment of waste is also a benefit to the environment.
  
  
  The location of so many similar plants in the area can lead to many advantages to the businesses concerned. These are referred to as 'external economies of scale'. Images: Courtesy of Degussa AG. Copyright held by Degussa AG.
• Critical Incident Response:
  • The local Cleveland Fire Brigade are specially trained to deal with the potential for incidents in the chemical industry. Critical incident response to problems within the chemical industry is something that all the major emergency services in the area are trained to deal with.
    Most fire brigades around the country will have some knowledge of dealing with chemicals but the concentration of the industry in such a small area does raise the potential for significant incidents. As such, the Cleveland Brigade have a wide range of specialist techniques and skills for dealing with such an eventuality. If there were to be a problem on site, therefore, they could rely on the expertise of the fire service to help contain and deal with the problem.
    This, again, is very much cheaper than if it had to equip itself to deal with such problems. Imagine every business having to set up its own fire service of specially trained individuals - the total cost would be very high whereas the total cost of the Cleveland Brigade is spread amongst all the firms in the area thus reducing their average costs.
• Access to services.
  • The concentration of the industry means that certain services are available to DSS that would not be if the industry was not as concentrated. For example, DSS has access to a pipeline that supplies nitrogen not only to DSS but also other businesses in the area. The electrical grid in the area is specifically designed to supply power to the various companies on Seal Sands. Degussa Seal Sands site now is capable of producing its own electricity in a 'Combined Heat & Power' (CHP) System, which is far more economical than buying power from the grid.
    The site is located near a port, which provides advantages in terms of distribution and supplies. The main road through the complex is owned and operated by the Teesport Authority. This road is designed to help ease the transport needs of the firms in the area and provide the main links to the port and to main roads in the area.
    Teesside also has an airport, which can be useful for those wishing to visit businesses in the area. Some firms, for example, might own their own jets to transport staff to the places they need to be and the facility of a local airport then becomes more cost effective.
  
  The site is not only near to power sources but also with access to the port facilities. Location is an important factor in the business' success. Images: Courtesy of Degussa AG. Copyright held by Degussa AG.
• Education and Training:
  • The industry as a whole has close links with both the University of Teesside and the University of Newcastle. This helps not only in developing research but also acts as a source of supply of skilled labour for businesses like DSS. At the time Biz/ed visited DSS, they were looking to try and recruit two new chemical engineers. One of the DSS staff was looking at a promising CV from a student who had been at the University of Teesside and so not only knew the area but also had some relevant experience.
• Information Exchange:
  • DSS is a member of a group called the North East Pharmaceutical Industry Cluster (NEPIC). This is a group that meets to discuss issues affecting the industry as a whole and provides a forum to exchange ideas. It exists to try and promote the chemical and pharmaceutical industry as a whole and so can be of benefit to a firm like DSS.
• Industry Specific Services:
  • Businesses providing contractor services specific to the chemical industry set up nearby. The cost of accessing these contractors is thus lower than if the business was located in isolation. Examples of contractors are engineering resources such as pipefitting, scaffolding, insulation providers, crane hire, steelworkers and civil building companies. In addition, there are a number of other companies providing specialist equipment maintenance services, design services and analytical testing services, amongst others.

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