UNIVERSITY OF GONDAR

Institute of Technology
School of Civil and Hydraulic Engineering
Department of Civil Engineering
Entrepreneur Assignment
Project Title: Ready Mix Concert Business Plan
Section: - 01

List of Group Members

Name of Student ID No
1. Eyoel Damtew …......................................................00477/10

2. Feyisa Berihun ….....................................................00667/10

3. Gelagaye Mekonen ….............................................04709/11

4. Melaku Degu..............................................................00214/10

5. Mubarek Sefa ….......................................................00219/10

Submitted to: Inst. Tamrat Y.

August, 2022

Gondar, Ethiopia
Table of Contents
Executive summary..................................................................................................................................3
Background of the Study.........................................................................................................................3
Ready mix concrete..............................................................................................................................4
About Ready Mix concrete business..................................................................................................4
Description................................................................................................................................................5
History...................................................................................................................................................5
Location................................................................................................................................................5
Mission..................................................................................................................................................5
Management Personnel............................................................................................................................6
Legal Structure.....................................................................................................................................6
Market Study............................................................................................................................................7
Industry Analysis..................................................................................................................................8
Target Market......................................................................................................................................9
Market Competition...........................................................................................................................11
Market Plan and Sales Strategy........................................................................................................12
Financial Sources of Income..................................................................................................................14
Operations...............................................................................................................................................15
Long Term Development and exit plan................................................................................................16
Financial Study.......................................................................................................................................18
Conclusion...............................................................................................................................................19
Executive summary

Construction activities in Addis Ababa, Ethiopia are increasing in current years, and demand for
ready mix concert has increased from years to yeas. Since providing ready concert mix have
advantages in the construction projects such as in roads and buildings in the city by achieving the
specified quality and time schedule for completing the concrete works in projects. Furthermore,
using ready mix concrete have a significant effect in reducing the labor cost needed to produce
concrete mix in the site and also order the desirable and preferred concrete mix quality with fair
price. This investment has a high demand in Addis Ababa, since the city construction industry is
flourishing in tremendous amount. Banks and other financial sectors are building high rise
buildings and road constructions in the city and in country are increasing. This resulted in the
demand of fast and quality concert mix .this project objective is to satisfy the gap in concert
demand and quality assurance in concert work. As an effort to overcome this idea is to build a
batching plant in around Semite in 3500m2 area. The investment generally known in two forms:
first, real investment generally involve in tangible assets such as land, machinery, or factors.
Second, financial investment involves written contracts, such as common stocks and borrowed
money.

Background of the Study

Ethiopia, being one of the developing countries, is becoming a place where many
constructions are being constructed. This fact is largely seen in the capital city Addis Ababa.
Many high rise buildings, buildings with beautiful architecture are being constructed all over
the city. This is a great opportunity and initiation for the construction industry also for the
economy of the country as construction is one of the bases for a state’s economy.

Most of these constructions are reinforced concrete structures which are built with concrete
mix, steel being reinforcement in the mix. Steel and timber structures are also observed in the
city although they are not much in number.
Although, some of the buildings are being built using prefabricated concrete most of the
constructions are done using cast in-situ concrete. Prefabricated concrete is a concrete type
where the concrete structures are fabricated in the corresponding industries with the size and
strength being ordered by the client. The solid concrete is then transported to the site of
construction and is joined with other structures to construct the building. Cast in-situ concrete
is the one where it is going to be casted at the site of construction.
Cast in-situ concrete can be either site-mixed or ready mix concrete. Formerly the concrete
mix is prepared at the site, but these days the concrete mix is prepared at concrete batching
plants
and then transported to the sites by concrete mixer truck.
Large constructions require large and continuous supply of concrete. In addition, for the fast
construction project require continuous supply of concrete mixes available whenever needed.
This makes ready mix concrete type more preferable than the site-mixed concrete for such
type of constructions.
Globally the market size of ready mix concrete is estimated to be 650 billion USD. The
Ethiopian market size of ready mix concrete can’t be found in any source. But with the ever-
growing nature of the construction industry in Addis Ababa the industry is expected to get
large with time. Our plan to join the growing construction industry through supply of ready
mix concrete for the large residential and commercial buildings in Addis Ababa.

Ready mix concrete

To give some background information about Ready Mix Concert; it is concrete mix that is
prepared in batch plants somewhere other than the construction site. They are called ready
mix because these mixes reach the site being prepared and ready for use. These mixes can be
either in-transit mixes or volumetric mixes. In-transit mixes ones are those that reach the site
being in plastic form and the concrete substituent’s are already mixed when reaching the
construction site. The volumetric mixes are those arrive to the construction site in raw form
(the concrete substituent’s are not mixed) but they are properly put according to the
proportion needed.
The advantage of volumetric mixes is that there is no concern that the mix gets dry before
arriving to the construction while being on the truck in case something beyond control occurs.
In addition, wastes are not expected to occur because the mix can be done according to the
demand. However, it requires additional time to mix the components.
The main advantage of in-transit mix is that it doesn’t need additional time for mixing the
components of the concrete on site. But wastage could be an issue since the mixes arrive to
the site already mixed.
The most common concrete mix type in Addis Ababa is the in-transit mix. Since, our business
mainly delivers in-transit concrete mix because as new entrepreneurs taking risk on trying
something that is not trending wouldn’t be advisable.
About Ready Mix concrete business
Ready mix concrete business involves the production of concrete mix in plants and
transporting the mix to construction sites (clients) by using mixer trucks. The raw materials
needed are the components that are needed to produce concrete which are aggregate (fine and
coarse), cement, and water. Admixtures are also necessary because the concrete is going to
be prepared at the
 Plants and then going to be transported so it is not needed to set before reaching its destination.

Description
The above statement highlights about ready mix concrete, which is vital for constructing any
structure from a simple house to high-rise buildings, dams, and concrete pavement roads. In
our country most of these structures are built using massive amount of concrete. The
following sections provide detailed information about the company’s history, location,
mission statement, management personnel, and legal structure.

History
Although it is fair a new idea that is not currently in the process, the information helps to
Introduce one’s company profile and increase interaction between clients and the company
Our Company is called Tana Construction Business Group. Our business mainly focuses on
delivering a ready mix concrete.

Tana Construction Business Group is founded by six 5th year students of Addis Ababa
Institute of Technology students named Eyoel, Feyisa, Gelagaye, Melaku, Mubarek, The
given entrepreneur assignment gave us the idea to help and improve the growing
infrastructure in Ethiopia. Although the proposed business requires huge initial capital, the
business plan has a strong potential to be profitable and move the construction industry one
step forward.

Location
The company is head quartered in Addis Ababa around Semit due to a large rapid growing
construction industry in the area. As we discussed in the executive summary, most of the
structures demanding ready mix concrete are available in Addis Ababa, especially in the
Semit area. Therefore, we registered the company in Addis to deliver the ready mix concrete
to boost and accelerate the project’s finishing time. By saying this we also see a few demands
out of the capital to construct schools, hospitals, lodges and hotels and sometimes water
treatment plants and dams. In the future we have the aim to diversify the company across the
country to transport to areas which needs our product. This also creates employment
opportunity for many peoples.
Mission
The company’s mission is to develop, promote, conduct, and establish new quality methods
of management, manufacture, mixing, delivery, and use of ready mixed concrete. To provide
contractors, and the public with information regarding ready mixed concrete. It also generates
excellent quality of a ready mix concrete product since it is focused on a specific structural
material. Our company functions to give all the advantages of ready mix concrete that
production, increases efficiency, environmental friendly, convenient delivery, versatile, reduce
wastage, and reduce life cycle cost.

Management Personnel
Our company has the plan to own different equipment and machineries to start and supply a
ready mix concrete and hence we could have different sides of management areas.
For instance, we could have a slight overview of the company’s structure:

General Manager to lead all the staff with a knowhow of leadership,

Human Resource to higher proper individuals for the intended position;

Finance Manager to manage cash inflow and out flow as per needed
IT Manager to handle the network usually computer based works and so on.

For Management Personnel works they usually assist and lead different tasks to help with the
continuity of the work specifically supplying a ready mix concrete. Personnel management
includes the function of employment, development and compensation- These functions are
performed primarily by the personnel management in consultation with other departments.
Personnel management is an extension to general management. It is concerned with
promoting and stimulating competent work force to make their fullest contribution to the
concern.

Other than the above company’s structure there are employees who work at the batching plant
center, transportation department, store keeper and other related positions in the structure to
support all the process starting from purchasing raw materials and processing to produce a
ready mix concrete to supply and transport the product and reach at the requested place or
site.

Legal Structure
This structural part of the company is an important structure for the intended use of a
government classification that regulates certain aspects of our business. On a federal level,
our business legal structure determines our tax burden and on a state level, it can have
liability ramifications. Based on the Ethiopian government rules for construction materials,
our company will fulfill all the requirements to start the business and finalize the process.
Once it is started this portion of the structure will play a vital role on every government issues
including tax payment and to solve any problems regarding client or organization conviction.
In general; creating a compelling company profile will help our customers understand our
company beyond the basics. Ultimately, our company profile is what intrigues a new visitor
to
 check out our products or services in more detail, and nudge potential customers into choosing
our business over competitors.

Market Study
Ready mix concert supply scenario is demanding According to current Ethiopia’s economy out
of the total budget that is funded through donors and government big portion of the budget spend
on infrastructures, such as Roads, buildings, and so on, Therefore concert supply demand have
increased in tremendous amount since 2013 due to the country’s development policy that
gives focus on infrastructure development. On the market study especially in Addis Ababa,
most high rise buildings are currently using the ready mix concrete which is supplied by Chinese
construction companies and Aser construction well-known local contractor which provide ready
mix concert. Even though there are ready mix suppliers in Addis Ababa, still the gap between
supply and demand is huge due to the current constriction activates undertaken in the
city and country. Addis Ready mix concrete supplier is planned to work on supplying ready mix
concrete to satisfy the huge demand on concrete works on construction site, by providing a
competitive and fair price with quality. The company plan is to produce 25m3/hr concrete. As the
concrete technology stands now, ready-mix concrete is leading the infrastructure development the
world over. That being the case, the paper at hand has tried to assess the level of popularity,
relevance and acceptance for application within the local context; specifically in the Nation’s
Capital, Addis Ababa. The effort as a whole is directly focused in examining the growth potential
and challenges of ready-mix concrete’s market in the ambitious and yet need driven housing and
infrastructure developments. The October 2011 survey of the City indicated that, a total of
578,547households for the then predicted population was required. Out of those in service then,
only 6.6% were of modern materials. Considering the high engagement of the City Government
in vertical settlement development programs of condominiums and apartments, concrete is a
major input to bring the effort to fruition. For this, RMC is the perfect choice to tackle the
intricate situation of the inner City development
Industry Analysis
The demand for ready mix concrete in the construction industry has increased due to rise in
demand for versatile building materials and increase in concern toward strong construction.
Furthermore, rapid population growth and urbanization is expected to have a dramatic effect
on the increased demand for jobs, housing, energy, clean water, food, transportation
infrastructure, and social services. Due to this, construction companies are adoptive for cost-
effective, environment friendly housings and buildings to ensure the highest standards and
uniform quality, which can be met by adopting ready mix concrete. However, loss of
workability of ready mix concrete due to the low lifespan is expected to hamper the ready
mix concrete market growth.

Ready-mixed concrete is the basic construction material used in large quantities for
construction purpose all around the world. With enlarged focus on infrastructure and housing
activities, uses of concrete in several forms are growing from time to time. Concrete that is
batched in a controlled environment at a central plant instead of being mixed on the job site,
which is called ready-mixed concrete brought better option for such a developing demand.

As the concrete technology stands now, ready-mix concrete is leading the infrastructure
development over the world. That being the case, the paper at hand has tried to assess the
level of popularity, relevance and acceptance for application within the local context;
specifically, in the capital, Addis Ababa. The effort as a whole is directly focused in
examining the growth potential and challenges of ready-mix concrete’s market in the
ambitious and yet need driven housing and infrastructure developments. Thus we can see the
major advantages of a ready mix concrete to the construction world below:

 Quality concrete is obtained as a ready mix concrete batching plant makes use of
sophisticated equipment and consistent methods. There is strict control over the testing
of materials, process parameters and continuous monitoring of key practices during the
manufacture. Poor control on the input materials, batching and mixing methods in the
case of site mix concrete is solved in a ready-mix concrete method.

 Speed in the construction practices followed in ready mix concrete plant is followed
continuously by having mechanized operations. The output obtained from a site mix
 concrete plant using a 8/12 mixer is 4 to 5 metric cubes per hour which is 30-60 metric
cubes per hour in a ready mix concrete plant.
 Better handling and proper mixing practice will help to reduce the consumption of
cement by 10 – 12%. Use of admixtures and other cementations materials will help to
reduce the amount of cement.
 The concrete mixed is used with high versatility. It is placed by following best concrete
placing methods.
 Cement is saved and the dust caused is reduced as ready mix concrete makes use of bulk
concrete instead of bags of cement.
 Cement saving will conserve the energy and the resources.
 Less consumption result in less production of cement hence less environmental
pollution.
 More durable structure is obtained thus increasing the service life and saving the life
cycle costs.
 Ready mix concrete manufactures have less dependency on human labors hence the
chance of human errors is reduced. This will also reduce the dependency on intensive
labors.
 A small or large quantity of concrete as per the specification is delivered timely at the
site.
 Petrol and diesel consumed is less thus noise and air pollution is reduced.
Therefore, this type of concrete guarantees higher durability and sustainability. As the work is
carried out by an expert supplier, the mixture formed is precise and of higher quality. Special
concrete mixtures too can be made efficiently by this concrete manufacturing method.

Target Market
The market for ready-mix concrete is expected to expand. Major factors driving the market
studied are the development of smart cities, and continuous infrastructure development in
emerging. Ease of availability of potential substitutes is expected to hinder the growth of the
market studied. Rising awareness of ready-mix concrete in developing economies is likely to
act as an opportunity in the future.
Global ready-mix concrete market is touted to account for considerable growth over the
coming years. This can be attributed to the expanding construction industry and growing
infrastructural development activities worldwide. The demand for ready-to-mix concrete in
the construction industry has surged significantly due to a rise in the demand for versatile
building materials and an increase in concerns toward robust construction.

Besides, rapid urbanization and population growth in diverse economies worldwide would
have a substantial impact on the increased demand for ready-mix concrete, complementing
the growth curve of the ready-mix concrete market. The handling of concrete from the mixer
to various points of work is one of the key challenges faced by players operating in the global
ready-mix concrete market. High initial investments for setting up manufacturing plants for
ready-mix concrete are also estimated to restrain the market. On the other hand, introduction
of new infrastructure construction projects is expected to drive the demand for ready-mix
concrete in the near future.

In terms of the application, ready mix concrete market is projected to witness surging demand
from the residential sector. This can be ascribed to the expanding rate of urbanization and
substantial need for residential construction to provide housing to people across different
economies worldwide. Further, hefty investments in residential construction and efforts by
central governments across these countries would further impel the demand for ready-mix
concrete over the forecast period.

Now a day in our country Ethiopia there is a huge demand and shortage of construction
materials due to many reasons. Many construction companies struggle with their own sit e
work and other burdens in addition to satisfy the project with the intended amount of cement
and aggregates to produce concrete in the site. But this is being a dream for many
construction companies and hence it is becoming a headache which is actually holding back
different types of project from completion. If these companies focus on other work and give
the chance to our kind of companies, then at least companies producing a ready mix concrete
may deal with the raw materials to bring out what a construction companies wants. Since
we share burdens the job will have extra people to fasten the plan of action. In general, this
process might save time and energy because for a given project many groups or companies
will contribute leading to complete the project with less delay.
Market Competition
Even though the ready mix concrete industry is growing we are going to face fierce
competition from senior suppliers and also from other newly joining suppliers. The seniors,
being senior and already having a head start in the business they are going to be the major
competitors.

In Addis Ababa there are plenty ready mix concrete suppliers which are well known. Most of
them have construction companies associated with them and their main supply is for their
own projects. There are also companies typically doing this.

National Ready Mix Construction PLC is one of the well-known suppliers in Addis Ababa. It
is part of the East African Holdings and has a nominal production capacity of 105m3 of
concrete per hour. It is located around the Ethio-China road, Bole. Another ready mix
concrete supplier in Addis Ababa is the Gentium Concrete Industry PLC. It is located around
St. George Church of Bulbula. Sufficient information was not available about their
production in different websites. Similarly, Addis Precision Engineering PLC also works in
this industry. The company is located around Bulbula.

The above are some of the competitions our company is expected to face. As stated earlier
most of the suppliers have their own construction companies and their concrete consumption
is mainly for their own usage. This is one advantage as we can jointly work with other
construction companies that cannot satisfy their own concrete demand by forming such
industries. As most of the suppliers’ priority is going to be for their own projects the
construction companies without batching plant will face delay in the provision of ready mix
concrete and that is where we are going to come. As these two industries are necessary for
each other we are going to work side by side and grow as well.

We are going to start the business with small batching plant and few other resources because
we are beginners for this industry. With the customers we are going to have and the income
we are going to get we are going to do social activities in the community like helping elder
lies, opening schools in our vicinity and the like. In doing so we are going to win the trust of
the government and different stakeholders while helping the community. This is going to help
us do larger projects in the city and the acceptance of the society. And so step by step we are
going to expand our business and also our batching plants so that we can compete side to side
with the senior suppliers.
They say your network is your net worth. We are also going to use the connections we
created and the people we met in school time while learning in university. We have got plenty
of friends that are going to join the construction industry by being contractor in their family
business. As they are junior entrepreneurs like us we are going to help each other out. They
are going to be our first customers.

Environmentally friendly industry is also our other way of penetrating this competitive
industry. Production of ready mix concrete requires large amount of chemicals and these
chemicals should be disposed properly and responsibly. Even though the trend in our country
for such things is not satisfactory, recently government and other stakeholders are taking the
initiative for protection of the environment. This is specially seen in industries. So as we join
this industry we are going to promise and construct an environmentally friendly industry.
This gives us the advantage as the senior suppliers need to refurbish their factories to meet the
environmental requirement which can impose additional cost on them. But we are going to
build it making it environmentally friendly.

Market Plan and Sales Strategy

Ready mixed refers to concrete that is batched for delivery from a central plant instead of
being mixed on the job site. Our country in particular has some serious infrastructural goals
that need to be filled in the coming years, meaning that as a ready mix concrete
manufacturing company, there are loads of jobs waiting for us.

Ready mix concrete(RMC) as it’s also known, refers to concrete that is specifically batched
or manufactured for customers’ construction projects and supplied to the customer on site as a
single product. It is a mixture of cement, water and aggregates: sand, gravel, or crushed stone.

Ready mixed concrete is used in construction projects where the construction site is not
willing or not able to mix concrete on site. Using ready-mixed concrete means product is
delivered finished on demand in the specific quantity required and to the specific mix design
required.

For a small to medium project, the cost of hiring mixing equipment labor plus purchase and
storage for the ingredients, added to environmental concerns cement dust is a particular
airborne health hazard may simply be not worth it when compared to ready-mixed concrete
where the customer pays for what they use and lets someone else do the work up to that point.

For a large project, outsourcing concrete production to ready-mixed concrete suppliers means
delegating the quality control and testing material logistics and supply chain issues to
specialists who are already set up for those tasks. Ready-mix concrete is bought and sold by
volume usually expressed in cubic meters (cubic yards in the US). Batching and mixing is
done under controlled conditions.

The global ready-mix concrete market can be segmented into commercial building, industrial
utilities residential buildings, and others. The commercial building segment is estimated to
expand at a rapid pace during the forecast period. It is projected to be followed by the
industrial utilities segment. The residential building segment is likely to expand during the
forecast period, owing to the increase in population and urbanization across the globe.

The Ready Mix Concrete manufacturing industry manufactures concrete and delivers it in a
plastic and unhardened state to purchasers who then mix and pour the concrete at construction
sites. Please note that this industry does not engage in mixing and pouring operations. The
construction industry and real estate industry are expected to continue thriving hence increase
in the demand for ready mix concrete. Strengthening demand from downstream markets has
driven growth for the Ready – Mix Concrete Manufacturing industry.

Operators in the industry produce and deliver wet batches of concrete to construction
contractors. Companies do not mix the concrete or pour it instead they focus on
manufacturing and distribution. The industry’s largest market is in construction both for
private residential and nonresidential use and for state and local public agencies. Therefore,
industry demand is primarily driven by housing starts and the value of government
investment on state and local projects.

Another notable trend shows that ready mix concrete plants are moving from using
technology solutions for specific tasks to having real-time and accurate information at their
fingertips. Construction productivity is on the brink of a huge leap due to integrated and
intuitive software that doesn’t just give us a bunch of numbers but rather provides easy-to-
understand information that enables you to make good decisions.

We are mindful of the fact that there are stiff competitions in the Ready Mix Concrete
Manufacturing industry hence we have been able to hire some of the best marketing experts
to handle our sales and marketing. Ready Mix Concrete Manufacturing is set to make use of
the following marketing and sales strategies to attract clients;
 Introduce our business by sending introductory letters alongside our brochure to
construction and real estate companies and key stake holders.
Promptness in bidding for ready mix concrete supply contracts from construction
companies and real estate companies
Advertise our business in relevant business magazines, newspapers, TV and radio
station.
Attend relevant international and local expos, seminars, and business fairs et al
Leverage on the internet to promote our business
Engage direct marketing approach
Encourage word of mouth marketing from loyal and satisfied clients

Financial Sources of Income

Ready Mix Concrete Manufacturing is established with the aim of maximizing profits in the
Ready Mix Concrete Manufacturing industry and we are going to ensure that we do all it
takes to meet and surpass the expectations of our clients.

Ready Mix Concrete Manufacturing will generate income by;

Manufacturing wet batches of ready-mix concrete in plants

Delivering ready-mix concrete to end users
Manufacturing ready-mix concrete in transit using mobile plant facilities

According to a website called 2merkato.com the price of 1m 3 of concrete is 5000ETB. Also

the price for the transportation truck of ready mix truck is 750ETB/hr. But we have to realize
that these prices were estimated before the great inflation that is hitting our country’s
economy. The price of cement has doubled up now, aggregates are being sold for a much
expensive price, the price of fuel is also getting higher and higher with time. At this time
market value of 1m3 of concrete is estimated to be around 6500ETB. With the escalation of
fuel price trucks can generate income of 800ETB/hr.

When we bring this to our company, with a full potential production of around 25m3 of
concrete and with 4 mixing trucks estimated income of 105,250 ETB per day is expected.
This value is calculated assuming our batching plant produces half of its full potential within
a day and our trucks can work for 8 hours per day.
Operations
Starting a ready-mix concrete supply business consists of so many operational aspects. And
you will need to determine these before offering the products to your clients. First of all, you
will need to employ human resources. Broadly, you will need manpower for production,
marketing, and administrative work. In addition to that, you will need to have a logistics team
also.

Prepare the entire process of getting an order, scheduling delivery, and accepting payments.
Open a business bank account in your nearby bank. For accounting, billing generation, and
stock maintenance, you may need an accounting software solution.

Ready Mix Concrete ERP software helps make easy day by day operation through this admin
panel. Like make fleet management, Stock management.

In the ready mix concrete industry, customers depend on getting the materials they need
exactly when they need it. Since on-time delivery is critical, efficient operations are essential.

Trimble Trim Fleet for ready mix is an operations tool designed to help manage the product
delivery cycle by automatically updating dispatchers on location and status information for
each vehicle in real-time. Relying on manual updates can often result in less than accurate
information, but with Trim Fleet's automatic updates you receive the information you need to
make intelligent business decisions that can decrease operational costs and increase fleet
efficiency.

Quality concrete is obtained as a ready-mix concrete mix plant makes use of sophisticated
equipment and consistent methods. There is strict control over the testing of materials,
process parameters and continuous monitoring of key practices during the manufacture. Poor
control on the input materials, batching and mixing methods in the case of site mix concrete
is solved in a ready-mix concrete method.

The concrete mixed is used with high versatility. It is placed by following best concrete
placing methods. Cement is saved and the dust caused is reduced as ready mix concrete make
use of bulk concrete instead of bags of cement. Cement saving will conserve the energy and
the resources.
Less consumption result in less production of cement hence less environmental pollution.
More durable structure is obtained thus increasing the service life and saving the life cycle
costs.

Ready mix concrete manufacture has less dependency on human labors hence the chances of
human errors is reduced. This will also reduce the dependency on intensive labors. Small or
large quantities of concrete as per the specification are delivered timely at the site.

This demands no space for storing the raw materials at site. There is no delay due to site
based batching plant erection/ dismantling; no equipment to hire; no depreciation of costs.
Petrol and diesel consumed is less thus noise and air pollution is reduced.

Challenges to operate ready mix concrete

The transit time from the time of preparation of concrete to the delivery site, will
result in loss of workability. This will demand for additional water or admixtures to
maintain the workability as per the specification.
Traffic during the transit of concrete can result in setting of concrete. This will hence
require addition of admixtures to delay the setting period. But unexpected traffic is a
great problem.
The formwork and placing arrangement must be prepared in advance in large area as
the concrete can be bought in larger amounts.

Long Term Development and exit plan

As entrepreneurs we would like to expand our business and not just stick to this business for
quite a long time. This is because of a lot of reasons. The major one is the pursuit of new
challenge. Once we are successful in this business we would like to try new challenge
because that is what entrepreneurs do. We wouldn’t want to stay in a comfort zone for long
time. New challenge, new business, new experiences, and new ideas are what we really seek
all the time. We would also want to adapt new methods and new technology to go along with
the modern world. We want to improve ourselves with every opportunity and aspect so that
our business won’t wear out at some point. The idea of supporting this business with other
businesses in case it goes south is also another reason. Business is all about risk and the risks
we are going to take might lead us to success or we might fail. Therefore, in such cases we
would not want to collapse at all. We are going to support it with the fund of our other
businesses.
Our long term development plan will not be totally different from what we are involved right
now, that is the ready mix concrete supplying business. It is still going to be in the
construction industry.

First we would like to expand our business to other cities of the country where major
constructions are going to be held. This needs extensive study to identify which cities show
promising development for the future to be the center of construction. It requires the
acquisition of governmental plans and also the plans of investors for the development of such
cities. The availability of raw materials in cities or around their region shall also be studied
deeply.

We are not going to be limited in the country. We are going to be international ready mix
concrete suppliers. Especially we are going to have concrete mix plants in east African
countries other than Ethiopia. We are going to control the concrete supply in this region
within 20 years or less.

Other construction industry ideas are also going to be considered besides ready mix concrete
supplying business. One is the business of supplying pre-fabricated concrete structures to
construction sites. This business is not quite usual in Ethiopia but is going to be the future for
the construction industry because pre-fab concrete construction is highly time saving method
and also highly precise. Therefore, we are going to join this business in 5-8 years.

Construction equipment rent is also another construction industry business we are going to
consider. With the growing in number of many heavy constructions across the country the
necessity for construction equipment is increasing. This includes the most necessary
equipment from simple dumper trucks to large scrapers. The beauty of this business is that it
is very versatile that the demand comes from different sectors of construction including the
residential buildings construction industry, institutional and commercial construction
industry, the construction bridges, the road and highway construction industry, also large
national projects like dam construction and also industry constructions. Also with the
continuous advancement of technology this business is going to be every-growing. We are
planning to join this business within 5 years. We are going to start small with this and then
gradually grow to one of the largest construction equipment rent company in the country. At
the end we are also going to have our own construction equipment spare part store and also
maintenance center.
Financial Study
According to our plan most of our initial costs are going to be covered by the government and
some part is going to be covered by initiative investors including us. For the purpose of
clarification of what our demands for starting this business are we have listed the mandatory
things below.

i) Batching plant

This is the major requirement of the ready mix concrete supplying business and is also the
most expensive of all the things. As stated before we are going to start small and then grow
gradually. In searching for a moderate batching plant we have found Hopper Lift Concrete
Mixing Plant suitable for our requirement. We are going to have the HZS25 model which has
a production capacity of 25m3 of concrete in hour. It demands a total power of 60kW and has
a 15mx8mx12m dimension which fits in small space. The cost of this equipment is estimated
to be $200,000 which is around 10,000,000 ETB. This cost doesn’t include the construction,
planting, and installation of it. The whole construction and installation process (including the
purchasing and shipment of the plant) can be estimated to be as high as 25,000,000 ETB.

ii) Mixing trucks

Ready mix concrete trucks up to 16m3 of plastic concrete transporting capacity are found in
the market. But since our batching plant has a full production capacity of 25m 3, truck with a
capacity of 12m3 is we need and what is feasible for our business is. 4 trucks can deliver our
products adequately. More trucks with total capacity larger than the production capacity are
needed so that idle time of the batching plant is minimized. Having idle trucks is better than
making the batching plant idle.

FAW mixing trucks are what we prefer because they are common in Ethiopia and have
comparably fair price for same product. Also the spare part of these trucks is available in
Addis Ababa which reduces their maintenance cost. To minimize the purchase cost we are
going to buy all the trucks from this company making it bulk purchase.

The cost of these trucks is estimated to be 5,000,000 ETB which makes a total purchasing
price of 20,000,000 ETB.
 iii) Power source

The energy consumption of batching plants is so large that it cannot be provided by the
electricity providing corporation of the state. They are required to satisfy their own energy
demand. Therefore, we are supposed to purchase generator that suits our batching plant and
whole process of ready mix concrete production.
The market has different types of generators that can provide different amount of electric
energy. Among them we intended to purchase the three phase type diesel generator set which
can provide up to 88KVA electric power. With a power factor of 0.8 this generator can
deliver around 70KW power of electricity. The batching plant we are planning to purchase
requires a minimum of 60KW power to run. Additional processes of the industry are
estimated to require 5-8KW of electricity power. Therefore, this generator best suits our
factory.
The price of this generator is estimated to be

Conclusion
The above analysis of costs shows that ready mix concrete production and supplying is
capital intensive business. By simply summing up the above estimates of costs a minimum of
50,000,000 ETB is required for starting up this business.

As stated previously, most of the costs are expected to be covered by government with a long
term loan to be repaid. Importing of the equipment and trucks needed is tax- free as they are
construction materials. This is one advantage for us to use because they are expensive
equipment making their tax to be correspondingly expensive.

Also bulk purchasing is going to be applied on most of the things that we are going to
purchase especially those with large quantity to take the advantage of purchasing cost
minimization due to bulk purchase.