When speaking of construction of house or commercial building or Industrial buildings, the first thing that comes to our mind are CHB or concrete hollow blocks as we know it. This material have passed the test of time since the 18th century until now. Let me share with you my journey when I started this kind of business.
It was way back on May 2018 when I decided to stay for good in the Philippines after a long time of stay in Singapore as and Filipino Overseas Worker. I have kept some amount of money to start a business but I don’t have yet a clear idea what kind of business should I start.
I have done some due diligence about business that will not entail so much capital and one that popped in my mind is HOLLOW BLOCKS MAKING BUSINESS. In doing this business you will only new few basic tools to start like shovel, wheelbarrow, pail. For the natural resources or say the ingredients that you will need are Portland cement, sand and water.
The amount of training that you will need if you want to learn it yourself is only about a day or two. Regarding the hollow blocks molder depends on your preference and budget capacity, but in this topic we will be dealing with manual concrete hollow blocks molder.
Okay let’s start with the simple tools that we will need and its usage and the price.
Simple tools to start
SHOVEL – appx P400.00 – P500.00 – you should look for the flat end shovel and not the pointed one. flat shovel best fit the function of mixing the sand during the production process. The shovel will served you from four to six months depending on the quality and amount of hollow blocks order that you will be producing.
WHEELBARROW – P2200.00 – this simple tool will be used to transport the sand from its storage to your HOLLOW BLOCKSMAKING area or production area. Normally it can last for a year or two depending on the volume of your production.
PAIL (16L) – P150.00 – P200.00 - this tool will be your measuring device for water. you can easily find this empty pails from construction where they’re doing house painting. You can even get it for free if you have contacts or friend working in a construction areas.
EMPTY CEMENT BAG – P 0.00 –this tool will be your measuring tool for your sand ingredients.
OKAY! now that we have mentioned our simple tools let’s go to the natural ingredients that we need to create our concrete hollow products. We will as well mention the price of our resources to give you and idea on the price of each one of block component.
Natural resources needed in making a hollow blocks
SAND (16 cu.m) – P7,500.00 – the price of sand that I place here is the current amount here in Pangasinan. In my experience 16 cubic meter of sand can produce 3200 pieces of size 4 hollow blocks or more.
CEMENT (40Kg) – P220.00 – normally a 40 kilogram of cement can produce 80 pieces of size 4 hollow blocks.
WATER – P0.05 – in my experience I am consuming about 5 cents of water per piece hollow blocks., but the amount will vary depending on the water source that you are using. You can even have it for free if you have rivers that is near your production area. You can as well let a contractor drive a galvanized pipe for a manual pump to do away with using the water from utility services.
Other miscellaneous expense added to the cost of a piece of block
HAULER INCENTIVE – P150.00 per 500 pieces of block – this the amount of incentive that I usually give to the team of hauler of the hardware that I sold my hollow block products.
The basic tools and the raw materials mentioned above are the very things that you need to build a HOLLOW BLOCK MAKING BUSINESS IN THE PHILIPPINES. as I mentioned you can either proceed in doing the business manually or with the use of a machine. But in today’s Blog we will discuss about doing the business manually.
When I start the CHB making business on September of 2018 I only hired two skilled staff in making my blocks. Each staff is producing about 320 pieces of size 4 blocks in a day, that’s using 4 bags of cement , we have a total of 640 pieces of block in a day.
I will not discuss in today’s blog the process of making the blocks, we will discuss that I other time. We will focus more in the computation of how much will be your initial capital and the profit that you can make on your first month of operation.
Now let’s dive in to the costing details.
BASIC TOOLS
shovel – P 400.00
Wheelbarrow - P 2200.00
Pail - P 150.00
TOTAL = P2750.00
RAW MATERIALS
SAND (16 cu.m.) - P7500.00 (appx 3200 pcs size 4 chb)
CEMENT (40 pcs.) - P8800.00 ( 40 pcs no. of bags of cement needed to make 3200 pcs blocks)
WATER - P160.00 (water consumption for 3200 pcs. of block)
TOTAL = P16300.00
LABOR COST
WORKER FEE - P120.00 per bag of cement (with 80 pcs output block) * 40 BAG
TOTAL = P4800.00
HAULER INCENTIVE
TOTAL INCENTIVE - P960.00 (obtained by dividing 3200 by 500 block times P150/500)
Having collected all our needed data’s we can now compute for the projected over all expense and profitability of the HOLLOW BLOCKS MAKING BUSINESS that we put to action. let’s group together the items that belong to each other and check our overall costing for capitalization every batch production.
Capitalization
BASIC TOOLS – P 2750.00
RAW MATERIALS – P16300.00
LABOR COST- P 4800.00
INCENTIVE - P 960.00
TOTAL = P24,810.00
Let’s now proceed to compute the price per piece of the hollow blocks and later on lets subtract the amount of our sales from our capitalization.
let’s go!
Capitalization of 1 hollow block
sand – P7500.00/3200 = P2.35 cost of sand per block
cement- P8800.00/3200 = P2.75 cost of cement per block
water - P0.05 = P0.05 of water per block
labor - P4800.00/3200 = P1.50 labor cost per block
hauling incentive P150.00/500 = P0.30
incentive per block
COST PER PC OF CHB = P6.95
Now that we have collected all our data we can proceed in pricing our hollow block as per prevailing market price. To do this you as the owner of the HOLLOW BLOCKS MAKING BUSINESS, must do your due diligence in knowing the price from every hardware near you and do the necessary mark up.
Let’s take for example the prevailing price in our place here in San Carlos Pangasinan. A piece of size 4 block with delivery is P10.00 without delivery you can charge P9.00. So let’s check the profitability.
A sale of 3200 pieces at P9.00 (let’s take a conservative profitability taking for consideration that we don’t have our own transport for delivery )will give you a gross sale of P28,800.00, In this case subtracting your initial capitalization P24,810.00 you will get a profit of P3,990.00 , then for the next cycle of batch cycle of 16 cu.m you will add P2750.00 to the profit because this should only be deducted once.
ofcourse it’s a good advantage to have our transport for delivery but let’s not make it an issue to hinder us from putting up our own HOLLOW BLOCK MAKING BUSINESS.
A 16 cu.m of sand can be consumed by two workers in 5 days, let’s conservatively say that we can make 4 cycle batch of 16 cu.m per month then we can have a total profitability of [P3990.00 + 3x(P3990.00 +2750)]
We have a first month profit of P24,210.00
I Have applied the rollover of capitalization to arrive at this computation.
I hope you learn something in this topic and that I am looking forward that you can give some interest in doing this business. see you again on my next blog. Thank you!
