Concrete blocks and bricks are used for building construction. They offer a very strong base for the building which ensures the durability and strength of the building in all adverse situations.
Almost all building construction uses some amount of concrete block or bricks. The global brick market is huge and close to 2100 billion units of bricks are manufactured every year with a CAGR of 3%. This forecast is for the year 2018-2027.
Due to Covid Pandemic that originated in China, the global lockdown all around led to the slowdown of construction activities which also hit the construction market. Though there have been some challenging times in the market, yet in the next few months, it is expected that things will improve for good.
The brick manufacturing market in the US is pretty strong with a market of $7 billion employing close to 25000 individuals. The market growth of the brick industry is close to 2.3% annually. There are 603 registered brick manufacturing businesses in the United States giving enough competition to the newcomers.
Bricks market in India includes fly ash, clay bricks and concrete bricks and blocks, where clay bricks still dominate the bricks market in India. Also, concrete cement blocks and Fly Aysh are still not running to their full capacity due to various reasons like shortage of fly ash provide by thermal plants.
Indian market is very good if you are planning to start cement bricks manufacturing. It is also one of the profitable manufacturing business available today.
So, if you are interested in investing in brick manufacturing business, there is a lot for you to study and understand before you invest any money. This article will explore the opportunities and highlight the challenges one can face in this industry.
Essential Components of Bricks Manufacturing Business Plan
1. Due Diligence and Research
Before investing any money in any kind of venture, one golden rule that applies to all business is due diligence and research. There’s no smartness in investing in something about which you have no idea.
Brick manufacturing is a very stable business. There’s nothing new that will be added in this market in years to come. Just simple bricks backed in the kiln. There’s already a huge market with 1000s of competitors in the business occupying the market and place.
One needs to ask simple questions, what can you offer to your customers what others aren’t offering? Will your brick be any different from the rest? Will your brick be cheaper?
The answer to all these questions lies in detailed research about the market. There’s a national standard price for bricks and almost all brick manufactures will sell bricks in the same price range.
Producing bricks through baking can offer only a limited set of standards which almost all manufactures can achieve. So what is that which you can offer that rest cannot?
Micro details about brick manufacturing will help you in finding something where you can capitalize. Region where you are operating, number of brick manufacturers in the region, quality of product they offer, price range, services, networks and reach will matter a lot.
In such types of businesses, consistency, quality in product and services, honesty with your clients matters a lot. And obviously, your network, reach and customer base will also matter.
2. Feasibility Analysis and Business Plan
As you end up researching enough about brick manufacturing, time will come where you will have to take a call regarding the feasibility of the business. Whether it is suitable for you? Whether it is offering you enough returns based on the hard work you put?
Such answers can only be given based on local level micro analysis of this business keeping in mind the local factors involved. Based on the outcome of the analysis, draw out your business plan keeping in mind your objectives about the business.
Try to be as comprehensive as you can to ensure the implementation remains very precise and not vague. A business plan will help you in securing investments and loans from banks whenever you need.
3. Requirements for the Business
Your business plan will have all the details regarding the requirements of the business. You will need types of requirements. First would be the raw materials and second would be the equipment to manufacture the bricks.
To start a brick manufacturing business, you will require the following.
- Added chemicals
- Mortar mixer machine
- Moulding structure for bricks
- Tools for mixing, levelling, keeping such materials
- Cleaners, etc.
These are the chief requirements for brick manufacturing. There will obviously be ancillary equipment needed for manufacturing. You can know about all the probable requirements when you will consult someone already involved in this business.
For your workers, you will need proper gear for their safety like boots and gloves, containers will also be needed. Moulding structure will be required to give a shape to the mortar and clay.
Such a structure is placed in a kiln using machines or sometimes manually. You will also require burning materials like coal, wood, etc.
4. Other Requirements
Place of manufacturing is obviously the most important thing. You need a good open space somewhere outer from the main city where you will be setting up your manufacturing business.
Most of the people who start these kinds of businesses often have lands in advance with them which they utilize for such purposes. If you have enough land to start your business then it is the best.
Else, you can lease or rent such space to set up your manufacturing business. There are certain permits, licenses and conditions that are required to ensure you function properly.
You also need a lot of soil for manufacturing bricks. You can dig it from your own land and you can also buy it from somewhere else whatever is suitable for you.
Setting up your kiln is necessary. Follow all the required guidelines and set up your kiln. There will be small rooms for your labours for rest, your small office space and some more space for parking trolleys and trucks.
You need space to keep containers, equipment and machines along with all the raw materials like cement, sand, clay, etc.
It would be advisable for you to get a groundwater source for regular water supply. You won’t need to depend on other sources.
Lastly, you need proper electricity connection, water supply, transportation system like roads, proper drainage and relatively open space for outflow of dust, smoke, and other waste material.
5. Manpower and Skilled Labour
There’s nothing much skillful in manufacturing bricks. The only thing necessary is to look for mortar and clay quality, ratio of clay-water, cement-sand-water and the time and temperature necessary for baking the bricks.
These things aren’t very hard to grasp for anyone. You can hire one expert labour who has worked over the years in brick manufacturing. Rest of them will be required for manual work.
Even to operate on a small scale, you need at least 3 labours to start your manufacturing and the number can rise up to a dozen based on your requirements.
6. Business Dynamics and Marketing
The dynamics of brick manufacturing is very complex. It is not a simple business as people generally think. Without proper networking and market reach, you won’t be able to do much in this business.
That is why most of the people who are into this business follow their family business or they are involved in construction activities either directly or through their friends and relatives.
Generally, you don’t sell bricks directly to your customers. They won’t be visiting your office to ask for bricks. Generally, whatever you are constructing, you generally tell your contractor who will order bricks as per need from his contact.
There is generally a team-up of such people who supply construction related materials like sand, cement, soil, equipment, trolleys, bricks, etc. Thus, your target market is not the customer but such contractors.
It would be advisable for you to first work in this industry for sometime to build your own contacts and network before you switch to brick manufacturing. A good networking and teaming up will lead you to regular demand for bricks and you will be able to earn pretty decent returns.
Else, in a general setting you might get few customers but that won’t be rewarding for you. Some experience in this field will help you mitigate certain challenges, you will know how to make things work, how to build networks, how to negotiate and much more.
7. Permits and License
There are certain permits required to start and run your brick manufacturing business. Firstly, you need to register yourself as a business dealing with manufacturing and construction.
Secondly, you need to obtain permission from your local government and authority to set up a kiln. There are certain guidelines in order to set up a kiln and manufacturing brick. Digging up ground for soil, controlling dust released during manufacturing, smoke, etc.
Thus, a separate land distant from residential areas is the norm in order to obtain permission.
You will also need environmental clearance since you are doing manufacturing which will produce waste products, smoke, dust, drainage. Contact a lawyer dealing with the following, he will help you in understanding the rules, comply with rules to ensure a smooth approval.
Brick manufacturing is a regulated business where government officials also visit to take a look at the factory setting, employees and laborers, their identification number, accounts book, etc.
Be vigilant is all these exercises to ensure you don’t land up on the wrong side.