Ready-mixed concrete can build economic strength in a world filled with poverty
In almost every US town of more than 20,000 people there is a ready-mixed concrete service. These businesses play an important role in our well-developed concrete construction industry. This industry is comprised of both family owned business and multinational corporations and represent a huge economic engine in the construction marketplace.
According to the National Ready Mixed Concrete Association, there are about 6,000 ready mixed concrete plants and about 70,000 ready mixed concrete trucks in the United States. The value of ready mixed concrete produced by this industry is estimated at $30 billion annually.
Chad Syverson, Associate Professor of Economics at the University of Chicago, studies the ready-mixed industry and suggests that the key issues with concrete production are transportation and production technique. He suggests that “ transportation barriers mean ready-mixed concrete must be produced near its customers”. The very nature of concrete requires that mixing and distribution be completed before the material sets to a hardened state.
Syverson also discovered that beginning in the 1930’s the mixing technology moved away from job site mixing to more specialized concrete mixers. From that time forward the industry has evolved to become a sophisticated supply chain that supports almost every construction project in the country.
Like any comparison between industrialized societies and the developing nations, concrete supply systems demonstrate a huge disparity in technology. The interesting thing is that in both economies cement-based building materials are a mainstay of the construction process. And like the US concrete system of 1920, countries like Haiti, Honduras and Nigeria still mix concrete at the job site using very low-tech processes.
So the question is: When will these developing nations begin to move their concrete production efforts toward the industrialized systems and then what will this look like?
Another interesting development that bears attention is the impact that the modern concrete supply model has upon those who can affect change in these developing economies. Builders and trades people from the US, Canada and Europe now direct many of the development projects around the world. These individuals represent a generation that has benefited from the technology that produces some of the safest concrete structures imaginable. They bring with them an understanding of acceptable concrete production practices for sustainable construction. They witness first hand the damage caused from poor construction methodology and in many cases they only tolerate the poor techniques because of the existing supply issues that confront them in the field.
Finding solutions to the supply problem will result in various growth opportunities within the concrete industry for developing nations. These opportunities will present themselves as the system is built at an appropriate scale and with the right technology.
The key to building a sustainable concrete construction economy lies in producing consent and trustworthy results. Improving the quality of concrete will provide builders with the ability to produce infrastructure and buildings that will endure, even during natural disasters. But developing an adequate concrete supply chain will require some investment. It was incremental investments and innovation that moved the US concrete industry from 1920’s technology to the most advanced concrete supply system in the world, in less than a century.
A modern mixing truck requires an investment of more than $150,000 and a new concrete batching system can run into the millions. Obviously this is not the scale that will work within the budgets of most developing nations. In fact, mixing truck distribution may never meet the needs of the communities in this sector.
So what scale would provide each community in Haiti or Nigeria with safe concrete mixes and still be economically practical?
The answer may lie in a new technology called the “Batch-Fed Mixer”. A mixing technology designed to advance the ready-mix supply system in developing nations.
To understand the function of these mixers we must first understand the importance of batching to quality concrete production. Batching is a process that uses a measured recipe of aggregates, cement powder and water to produce a consistent result. In many of the developing countries the mixing is done on the ground using shovels. This technique is problematic as it does not use accurate measuring for any of the components of the recipe. The inconsistency of ground-mixing creates weak concrete that will eventually fail. A batch-fed mixer compensates for inaccuracy by using calibrated containers to load the recipe into the mixer.
Like a highly sophisticated concrete batch plant, the batch-fed mixer helps maintain a consistency that raises the quality of the concrete even in the most remote locations.
A crew with a batch-fed mixer can replicate many of the functions of a US ready-mix truck, but at the appropriate scale for communities in Haiti. Like the local ready-mix operation the Haitian mixer owner will employ several people and build up the local economy. Like the ready-mix company, the batch-fed system will join an interconnected chain of suppliers who make concrete construction possible. Small ready-mixed operations will require the services of small aggregate mining and processing businesses. Both of these operations will require quality control testing from another small business person, and with these the supply chain will expand.
Creating an appropriate ready-mix solution for developing nations can be the model for every portion of a growing construction supply chain. The system can be scaled appropriately to accommodate the specific needs within developing communities. Ownership of each supply resource can be individually owned or community run. Financing can be supported by governments, charities, NGO’s or other lending organizations.
CementTrust is suggesting that a branded micro-franchising model could act as the umbrella for the concrete construction supply system. We see a future when these linked small businesses will be as commonplace in Hinche Haiti as they are in Hannibal Missouri.
We see many great opportunities within the 4-Billion at the bottom of the pyramid…