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How to start cement business in Nigeria

Kingsley Umeh by Kingsley Umeh
September 27, 2021
in Nigeria Business
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How to start cement business in Nigeria
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How to start cement business in Nigeria

Is the cement business in Nigeria a lucrative venture? Yes, it is, considering that cement is the base material for the construction industry in most countries of the world, which is witnessing increasing activity.

The need for the provision of more housing units of any kind amongst different income classes continues to grow yearly.

The construction industry, as typified by one of its arms; Real Estate continues to post impressive returns on investment, whether any economy is in a recession or a boom.

Starting a cement retail business means that you will be meeting a continuous demand for a commodity, whose economies of scale make it a profitable venture.

The major points of entry into the cement retailing business you can consider include starting out as a

Distributor/Wholesaler or as a retailer.

Wholesaling will involve you signing up and presenting documentation to the primary manufacturer of the product.

In addition, you will be required to present financial records to show that you are able to buy off a minimum number of bags of the product at pre-determined intervals.

The further requirement includes:

  • Certification of your company’s incorporation
  • Letter of Intent
  • Bank reference letter
  • A description of the company’s CEO and board of directors.

How to start cement business in Nigeria

If you desire to enter the cement business in Nigeria on the scale of a retailer, you will obtain your cement supplies directly from the wholesalers/distributors.

As a retailer you can also use the following guidelines in starting your cement business:

1. Have a Business Plan in Place

Even for your cement retail business, you will have to come up with a sound business plan.

A business plan answers questions like who your target market is, what are the start-up costs? Who are your competitors? What distribution strategy will you deploy to minimize your operating costs and maximize your profits?

Once you have clearly defined the parameters of your potential cement retailing business, then you can go about setting up your venture.

Secure Appropriate Storage Facilities

Your cement retailing business will need to be housed in an appropriate location. Your cement supplies must be well protected from the elements such as rain, extreme humidity, and the sun.

Your ideal store/warehouse must be able to provide spatial arrangements for the easy loading and off-loading of your cement product.

Another important consideration is the safety and security of your cement retailing business. Your storehouse must be properly set up to guard against theft and other crimes.

2. Have an Aggressive Marketing Drive

Your cement retailing business is in keen competition with other similar businesses because of the lucrative nature of the cement industry.

Therefore, you must try to gain, keep and even enlarge your market share
You can achieve this by personally marketing or using contractual staff, who will visit construction sites as well as real estate agencies.

Another key strategy you can employ is to offer discounts as much as your profits can permit you.

3. Have an Operational Vehicle

Your cement retailing business must find ways of staying ahead of the competition. One way to go about this is to incorporate delivery services to customers who may desire to have their purchases dropped off.

If you can afford it, your cement retailing business can procure a functional operational/delivery van, to service requests within the vicinity of your operations.

This will not only endear to your existing clients but it can also serve as a promotional marketing tool, to attract newer prospects.

4. Give Room for a Variety of Products

As a cement retailer, you must keep your eyes on the current trends in the cement industry. A key feature of such knowledge you should have is the cement product brands that are the market leaders.

Various cement brands are noted for varying qualities that are influenced by brand penetration and loyalty.

It will be a wise business move to stock up on a number of cement brands in order to cater to an array of customers, with loyalties to the existing cement brands.

5. Keep Abreast of Price Fluctuations

The cement market is one that is characterized by sudden changes in the pricing of the product. This volatility has the potential to either make or mar your cement retailing business.

On the one hand, if there is a decrease in the price against your cost price for the cement product, then you will grapple with the attendant losses.

On the other hand, if there is a price surge and the current price of cement is above your selling price, then you will be making a handsome return on your investment.

A strategy that you could use is stocking up on a manageable number of bags, which you can dispose of in a period of time.

This knowledge of your sales will be acquired over a period of time. In addition, you could also use the safety net of stocking up on a number of brand varieties, so you can augment a shortfall with one brand, with a surplus in sales for another.

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Kingsley Umeh

Kingsley Umeh

I am a passionate entrepreneurship blogger, Founder/CEO, editor-in-chief, and Publisher at Probusinessideas. My sole aim in creating this blog is to contribute my own quota towards entrepreneurship in Africa. My work has been featured on some notable Nigerian blogs such as Bellanaija,Makemoney.ng, Ideaslane, Enibest, Infoguideafrica, Pulse.ng and Entorm.  

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