To reduce the logistical and operating costs for biofuel plants, it is important to make a strategic decision to select the proper site for a new facility. Due to the facility's complexity, the facility-location problem must consider the supply-chain structure, involving the material flow from suppliers to customers. This paper proposes an optimisation framework that combines the process design and configuration of the supply chain using an MILP (mixed-integer linear programming) formulation. The model was applied to locate a second-generation bioethanol plant in Colombia that uses an agricultural residue known as Coffee-CSs (coffee cut stems). The experimental results indicate that placing a processing plant at Ibague city results in the best profitability. A post-optimisation analysis indicated that even for a long period, the location decision did not change. (C) 2014 Elsevier Ltd. All rights reserved.