The concrete block factory business in Nigeria is one evergreen business, that will always thrive till the end of time.
This business is one of the few businesses that can be done by the educated and none educated and both will thrive.
It thrives because it is centered on the basic needs of man—Shelter
As long as houses are being built or renovated, the demand is sure.
Even if you decide to locate your business in a developed area, as long as your cement concrete blocks are solid (standard) you will always get recommendations.
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Three misconceptions about the concrete block business
1. When the concrete block business is mentioned, many people think it is just only the house building cement blocks. No!
It goes beyond that. There are diverse versions or specifications in the cement block industry business such as; “interlocking, bricks, the solid and hollow concrete blocks, and so on”
2. People think setting this business up in rural areas pays better than in urban areas, which is absolutely false.
Like I said earlier, make sure your quality is standard, people will come looking for you as far as from the rural or not yet developed urban areas.
But if you can set up an outlet in the rural or not yet developed urban areas, that will give you a great edge over your competitors in the business.
3. Some also think this business can’t be lucrative because it is cheaper for the house owners to pay a personal concrete block molder. That is false!
As someone who has worked in the concrete molding block business, as a laborer back then when the naira still had little value compared to what it is today, I can boldly say; “It is a cheaper and better alternative to buying your concrete cement blocks”
Who got all the time to be waiting for some laborer to mold hollow or solid concrete blocks? And wait for it to dry!
Due to rainfall, the freshly built blocks might be destroyed before they even get the chance to dry.
And other times, circumstances can make the owner decide to put the building project on hold due to whatever reasons. Then the concrete blocks become a waste of money and time.
But if the owner had decided earlier to buy blocks; it will save the delayed time of drying, access to solid blocks (which can withstand rain), and no wastage because the blocks would have been ordered per urgent need from the site architect or contractor.
With those common three questions answered, I believe you can now see the endless possibility this business holds.
But let it be noted that this business just like other businesses has its seasons of higher demand, and that season is the dry season.
As I said, “Higher demand” which means in the rainy season you might have good demand but expect more demand in the dry season because that is when most contractors execute their build project.
Steps to Starting a Concrete Block Business in Nigeria
1. Business Plan
It is mandatory to have a business plan before launching this cement concrete block business.
The major reason is that the business plan will control the capital expenditure, the expected profit that can be attained from the first month, and the trajectory increase in revenue if things go as planned.
The business plan will also give you insight as to how your competitors operate and how you can penetrate into the market either through price skimming or price penetration.
Price Skimming: This means entering into the industry at a higher price than your competitors. The only way to succeed through this market mechanism is by coming up with the best standard and better alternative as to what your competitors might have in stock.
Price Penetration: This means entering into the industry at a lower price than your competitors. This type of market mechanism might not work in this industry, because they have a regulatory body.
But market skimming will definitely work because what the regulatory body does is create a minimum price boundary only.
Another advantage of having a business plan is that it gives you access to loans from investors (which might also include family).
These are all the most important areas your concrete block factory business plan must cover;
- Executive Summary
- Business Descriptions
- Product and Services
- Market Research and Strategy
- Competitors and Marketing Plan
- Operation Plan
- Management and Structure
- Financial plan projection.
But I’m not here to talk about “Business plan”, if not I would have gone deeper.
2. Register your business
Your business plan and business registration should go hand in hand.
Basically, it is the second requirement any financial institution will ask for after the business plan before they can give you a loan or grant.
And some companies or the government, before they offer you a contract, they will make sure you bring evidence of business registration.
Registering your business is also necessary as it helps prevent disruption of operation from those rogue tax collectors that take advantage of unregistered businesses.
The business registration is done with the C.A.C. and there are two major categories of business registrations;
- As an Enterprise
- As a company ( which could be limited or unlimited)
As an Enterprise, your business is totally under the state tax law which is always unpredictable
But as a company, your business is placed under Federal tax law, which is way better.
To know more about the difference between both, make sure you ask the person that is doing the registration for you.
But nevertheless, it is advisable to register as a company, not as an Enterprise.
3. Capital.
This business demands a lot of capital or properly put it is capital intensive.
The capital is totally dependent on the scale you want to run ( large, small, or medium).
And that is why the business plan will be there to guide you.
And don’t also leave out the option of asking family and friends for capital.
4. Location
Location is as important as the aforementioned.
And like I said it is not dependent on whether you are setting it up in a rural or urban area.
Four (4) things must be carried out alongside the Land
1. The must factor which must never be underlooked is the topography of the land upon which you are going to set up this concrete block business.
The land must never be swampy or waterlog area
No matter how cheap it comes, never set up the concrete block business on swampy land!
It will lead to the destruction of all your blocks and the blocks that manage to survive, it will make them weak (substandard).
And the only way to survive in this business is by recommendation which can only happen if your concrete blocks are standard.
2. When you acquire the land, ensure you have a roofed structure where the equipment will be stored like the picture above. But let it be bigger than that.
The structure might not be totally sealed sideways ( which is even advisable not to be, due to the fact that enough ventilation is needed).
But it must be properly roofed so as to prevent the machines from being drenched by continuous rain and sunlight.
3. Make sure your location can easily be accessible by vehicles (both large and small).
5. Water system
Without water, there is no production. That tells you that water is as important as the capital.
So setting up a borehole becomes a priority. But if you feel that will be too expensive and you want your capital spent on other major things, you can opt for water well drilling which most concrete block companies use and it is very cheap.
6. Equipment
The equipment encompasses both manual and automatic machines.
The manual machines are; the shovels, a local manual molder (this cost about 10,000naira to 20,000naira), headpans, wheelbarrows, wood carriers, etc.
While the automatic machines are; The vibrating machines (which is the automatic molder, which cost about 100,000naira to 200,000naira), concrete mixer, etc.
A Lister generator is a must, as the light issue still lingers in this country.
In total sum up these are the major pieces of equipment you must have before you can start the concrete block business in Nigeria
- Headpans
- Wheelbarrow
- Molder
- Wood carriers
- Concrete Mixer
- Supply Truck
- Generator
7. Human Resources (Labourers)
Without human resources, your equipment has no relevance.
these are the categories of workers you must employ if you have no technical know-how about the business.
- Machine Operators
- Mixers
- laborers
- Driver
- Loaders
It is important to make one of the laborers or the machine operator the supervisor of the factory.
So that, when you are not around, even though he has his own duty to carry out, he will still be carrying out the supervisor’s work in your absence.
The person that is mostly given this title is the oldest laborer “due to his experience in the business”.
But if you feel that won’t be a good management style, you can employ a cashier who will also be carrying out the duty of a supervisor.
That can help curb the cost of labor.
The salaries of workers are not on monthly bases like other regular businesses.
The payment is done either weekly or biweekly depending on the one that best suits your budget.
And it shouldn’t be lesser than a cumulative 20k per four(4) weeks for the least staff.
8. Sand and Cement
There are sands that are perfect for concrete blocks and others that are not perfect for concrete blocks.
These 3 types of sand are the best ones;
- Sharp sand
- Stone dust
- Mud sand
As for the best cement currently, I think it is still Dangote Cement. But do your research, because in Nigeria the best company yesterday can become the same company producing substandard products today.
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Conclusion
I hope you benefited from this article: “Concrete Block Factory Business In Nigeria”
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FAQ
How profitable is the block industry in Nigeria?
The concrete block factory business in Nigeria is one evergreen business, that will always thrive till the end of time.
It thrives because it is centered on the basic needs of man—Shelter
As long as there are houses being built or renovated, the demand is sure.
Even if you decide to locate your business in a developed area, as long as your cement concrete blocks are solid (standard) you will always get recommendations.
How do I start a block industry business in Nigeria?
To start a business is not the issue but sustaining and making the business become the dream business you want is the main important thing.
The article has all the details you need to not just start this business but also to manage it excellently.
