BLOCK MOULDING

BACKGROUND ·         The block moulding cluster includes industries directly involved in the construction of residential housing, commercial and industrial buildings, roadways and other physical structures. Operators range from road-side to semi-automated and the sophisticated with fully automated plants. Their products typically include blocks, interlocks, concrete electricity poles, culvert rings, concrete pipes, etc.

 

·         Nigeria’s housing deficit is estimated at 17 million units and recent data from the Federal Ministry of Lands, Housing and Urban Development has revealed that the country would require an estimated N59.5 trillion to bridge its housing gap.

 

·         This figure suggests the huge potential for block making factories in Nigeria, as more people will still build houses and government will keep improving the present infrastructure especially given that cement block constitutes about 90% of building construction blocks.

PRODUCT CATEGORIES ·         The product categories under block moulding include the following:

i.              Concrete Blocks

ii.             Interlocking Paving Tiles

iii.            Culvert Rings

iv.           Concrete Pipes

v.            Concrete Electricity Poles

SOURCES OF TECHNOLOGY ·         The poor regulation has also ensured that small scale block makers do not bother about newer technology that can improve the quality of their products. However, a new concrete block making technology called ‘CONCRETE MD’ which automatically mixes concrete and results in accurate measurement of materials, has been introduced to Nigeria and Africa by Growth and Employment in States (GEMS 2); a UK aid-funded agency intervention in the construction and real estate sector in Nigeria.

 

·         CONCRETE MD is manufactured by Cart-Away Concrete Systems, Inc., 1405 NE Alpha Drive, McMinnville, Oregon, 97128, USA. Email: www.cart-away.com, Phone 1-503-434-4444. CONCRETE MD is a mobile self-sustained machine that uses fuel, automated mixture barrel, measurement dashboard and other components which reduce human variation to a large extent thereby providing better assurance of accuracy, consistency and quality output. The equipment has the advantage of being mobile and it does not depend on electricity. Concrete blocks made with CONCRETE MD are more durable than what is being produced currently by most small operators and the aim is to improve the construction sector through income growth and overall empowerment of workers and artisans.

 

·         Other manufacturers of concrete block making machines include:

 

1.    ROMETA,

Zona Industrial Ronda de les Conques,

21-23 08180 Moià, Barcelona, Spain.
Website: www.concrete-machinery.com,

Phone: +34 938 208 181 / +34 616 173 585

 

2.    ZCJK Intelligent Machinery Wuhan Co. Ltd

No.1, Dongli, Guanzhuang, Chaoyang District, Beijing,

China (China Building Materials Academy)
Website: www.zcjk.com

Tel: +86-27-85413858
+86-10-65798737

 

3.    Openmac Innovations Limited

48, Cherry Court Summerhill Co. Meath,

Dublin-Ireland.

 

4.    Syntec Handels und Beratungsgesellschaft mbh

Konsul Smidt Street 22.28217 Bremen,

Germany.

 

5.    Yomalex Eng. Ventures LTD

20 Babalola Estate, Orita Challenge,

Ibadan-Oyo State.

 

6.    Build Direct Construction

17 Monrovia Street, Wuse II, Abuja

1 Ikota Shopping Complex V.G.C. Lagos

12 Sanusi Akerele Street, Oluyole Estate,

Ibadan, Oyo State

7.    Hydraform

220 Rondebult Road
Libradene
Boksburg, Johannesburg
South Africa.

 

RATIONALE

1.    It is an indispensable industry in Nigeria’s economy as far as housing, urban development and Infrastructure development is concerned.

 

2.    As a sub-sector of Construction, the industry is a major catalyst of economic growth.

 

3.    With predominance of local raw materials, improved living standard and demand for better housing with bespoke finishing in the urban centres; the sub-sector is proving to be a gold mine of sorts in the country and attracting a good number of semi-skilled and professional block moulders.

 

4.    This product will provide operators the needed financial assistance to acquire modern equipment for improved output that can compete globally as well as create more jobs.

TARGET MARKET/ CRITERIA The Target market for the supply of blocks and interlocks is the mass estate developers, major construction sites and private residential/office property developers nationwide. This will also include:

  1. Start – ups and Expansion.
  2. Limited Liability Companies and Enterprises promoted by both Men and Women.
  3. Wholly owned Nigerian Companies.
  4. Foreign/locally-owned companies with minimum of 51% Nigerian Ownership in its shareholding structure
PROJECTED IMPACT A typical small to medium scale block/interlock making business will create an average of 10 – 20 direct jobs and 50 – 100 indirect jobs, totalling 60 – 120 jobs.

 

Small Medium
Direct 5 -10 20
Indirect 25 – 50 100
Total 30 – 60 120
SINGLE OBLIGOR LIMIT Up to N500 million
 

PRICING

Interest Rate: 9 % per annum.

Fees: 1% Processing Fee for loan less than N50 million.

          1% each for Appraisal and Commitment Fees for loans

above N50 million.

TENOR 31/2 – 7 years commencing at the end of the moratorium period
MORATORIUM 6 – 12 months
SECURITY
Loan Amount (N’m) Security Arrangement
5.0 – 10.0 1.    Specific charge over the equipment financed.

2.    Irrevocable Personal Guarantee of the Chief Promoter of the company.

3.    Two (2) external guarantors acceptable to BOI who must belong to any of the following categories:

  1. Senior Civil Servant (Level 12 and above) who should not be more than 53 years old or not more than 28 years in service (whichever comes first).
  2. Bankers (not below the level of Assistant Manager) and must have been confirmed by current employer.
  3. Professionals i.e. Medical Doctors, Lawyers, Accountants, Engineers, etc.
  4. Senior Staff (not less than a manager) of reputable quoted Companies, International Oil Companies, Telecommunications Companies (GSM providers)
  5. The guarantees must be supported with Notarized Statement of Net worth acceptable to BOI.
>10.0 ≤ 20.0 1.    All assets debenture.

2.    Irrevocable Personal Guarantee of the Chief Promoter of the company.

3.    One (1) external Guarantor acceptable to BOI who must belong to any of the following categories:

a.   Senior Civil Servant (Level 12 and above) who should not be more than 53 years old or not more than 28 years in service (whichever comes first).

b.     Bankers (not below the level of Assistant Manager) and must have been confirmed by current employer.

c.      Professionals i.e. Medical Doctors, Lawyers, Accountants, Engineers, etc.

d.     Senior Staff (not less than a manager) of reputable quoted Companies, International Oil Companies, Telecommunications Companies (GSM providers)

The guarantees must be supported with a Notarized Statement of Net worth acceptable to BOI.

Or

Bank Guarantee from Commercial Banks acceptable to BOI.

> 20.0
  1. Irrevocable Personal Guarantee of the Chief Promoter of the company in addition to one or a combination of the following:

i.        All assets debenture.

ii.        Legal mortgage on pledged property.

Or

2.    Bank Guarantee from Commercial Banks acceptable to BOI.

FUNDING

STRUCTURE

·         Loan up to N50 million:           90% maximum from BOI (including working capital from BOI or the SME-friendly banks).

·         Contribution by the promoter – 10% (minimum)

·         Loan above N50 million: 80% maximum (including working capital from BOI or the SME-friendly banks).

·         Contribution by the promoter – 20% (minimum)

Existing Business:

·        For an existing project, the estimated value of the factory building and/or relevant processing equipment, may be applied against the borrower’s 10 – 20% contribution. The factory building and/or equipment must be valued professionally by any of BOI’s accredited valuers.

FUNDING SOURCES ·         Loans of N5 million – N50 million:  BOI Fund and CBN N220 billion Micro, Small and Medium Enterprise Development Fund (MSMEDF)

 

·         Loans above N50 million: BOI Fund

DISBURSEMENT Term Loan:

·         In phases in accordance with agreed milestones and shall be backed by provision of performance bond issued by a commercial bank or a BOI accredited insurance company, on behalf of the BOI accredited equipment supplier, where the supplier demands for advance payment before delivery of the equipment).

·         Establishment of Letters of Credit where the plant and machinery are to be imported.

Working Capital:

After successful installation and testing of the equipment, payment shall be made directly to raw materials suppliers.

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