I got it working slightly differently, using the term and taxonomy parameters. Term contains the slug of the term you’re looking for, taxonomy the id of the taxonomy. So, the earlier example would look like this:
$args=array(
'taxonomy' => 'factorytype'
'term' => 'small-factory',
'post_type' => 'factory',
'posts_per_page' => 10,
'caller_get_posts'=> 1
);
