Economy, Business And Markets

Investment Opportunity: Concrete Block Production

Investment Opportunity: Concrete Block Production
Investment Opportunity: Concrete Block Production

Concrete blocks are made from cast concrete, Portland cement and aggregate, usually sand and fine gravel, for use in building construction.

Lower density blocks may use industrial wastes as an aggregate while lightweight blocks can also be produced using aerated concrete.

Concrete block, when built in tandem with concrete columns and time beams and reinforced with rebar, is a very common building material for the load-bearing walls of buildings.

The Persian daily Forsat-e Emrooz recently published an article on setting up a concrete block production plant and the sector’s investment potential in Iran.

According to Hossein Akbar, chairman of Cement Products and Metal Construction Materials Producers and Sellers Association, domestic demand for housing currently stands at about 1.5 million units per year and could even rise further over the next few years.

Iran’s projected economic growth will arguably boost demand for construction materials ranging from steel to cement. And considering the expansiveness of the construction industry, investment in the production of low capital requirement and low-risk raw materials such as concrete blocks can be a great opportunity, according to the industrial expert.

Akbar noted that the concrete block production sector is one of the few sectors which is completely self-sufficient in terms of production equipment and raw materials, making it a safe investment option.

“In order to set up a standard concrete block production plant with a production capacity of 3,000 blocks per day, a 6,000-square-meter plot of land is required, the price of which differs based on the investor’s province of choice,” says Hamed Sharifi, a player of the field.

Sharifi said the average initial capital needed for covering the costs of equipment, land purchase and employment of about seven employees is about $150,000.

“To guarantee a good profit margin, the producer must maintain good quality throughout the construction project, court large-cap construction companies through incentives such as free transportation and diversify the plant’s product portfolio to appeal to a broader range of consumers,” he concluded.