Requirements To Start A Cement Business In Ghana

Cement Business In Ghana

In a time when people have acquired landed properties as a priority, one of the most lucrative businesses one can venture into Ghana is the cement business. This is because of the significant role cement plays in the building of any structure.

Meanwhile, there are two ways in which you can run a cement business in Ghana. One is as a distributor which involves buying cement from a production company and selling it wholesale and the other is as a retailer which requires you to buy cement in small quantities and sell directly to customers.

If you have an interest in running a cement business in Ghana, be it as a distributor or as a retailer, then this article is for you.

In this article, we have put together a comprehensive guide on how you can start and run a cement business in Ghana even if you have no prior knowledge or idea of how it works.
Let’s dive in!!!

What Are The Types Of Cement Business In Ghana?

When it comes to starting a cement business in Ghana, there are two major ways to get started and they are:

1. Cement Distribution Business: Cement distribution business is the type of cement business in Ghana that involves the buying of cement in large quantities from the manufacturers and reselling to the retailers.

This type of cement business requires a lot of money to get started, and the profit margins are very high.

2. Cement Retailing Business: Another major and popular type of cement business in Ghana is the cement retailing business. The cement retailing business involves the buying of cement in smaller quantities from the cement distributors, and then selling to the final consumers.

However, this type of cement business is not that capital-intensive, and also the profit margin is cool.

What Are The Top Cement Companies In Ghana?

Here are the top 10 cement companies in Ghana:

1. Dangote Cement
2. CIMAF Ghana Cement
3. Diamond Cement Ghana Limited (DCGL)
4. Ghacem Limited
5. CBI Ghana
6. Savannah Cement
7. Dzata Cement
8. African Concrete Products Limited
9. Western Diamond Cement Limited
10. ABBANSCO Concrete Products

Is Cement Business Profitable In Ghana?

Yes, the cement business in Ghana is very profitable and this can be attributed to the high demand for cement following the different building projects going on in the country by schools, block Industries, road constructors, churches, government, and individuals.

Meanwhile, this high demand for cement in the Ghanaian market has made the cement business a profitable one.

Also, due to the high demand for cement, retailers and distributors who invest in the business make a lot of profits.

What Are The Problems In The Cement Business In Ghana?

Though the cement business is a profitable venture, some problems may/will occur in the long run. Some of these problems are:

1. You can experience loss after stocking your shop with cement you bought at a high price, only for it to fall in price.

2. If care is not taken during the purchasing and loading process, you will encounter loss from the miscalculations.

3. Long time packing of cement in your shop can result in the caking of cement. And this could cause a financial loss.

4. Damaged bag during the transportation/delivery process.

What Are The Things To Consider Before Starting A Cement Business In Ghana?

Below are three important things to consider before starting a cement business:

1. Have it in mind to employ a trusted salesperson to avoid loss.

2. You have to be calculative before starting a cement business. This also involves studying the market prices and knowing how to be accountable.

3. Have the basic knowledge of the business. That’s why market research and business plans are very important.

Meanwhile, when you start your cement business, be prepared to check and rearrange them when necessary to avoid caking.

How Much Does It Cost To Start A Cement Business In Ghana?

Starting a cement business in Ghana will need at least 10,000 to 30,000 Ghana cedis for a small-scale and medium-sized cement business including buying cement and renting of shop.

On the other hand, you will need as much as 90,000 to 150,000 Ghana cedis for a large-scale cement business in Ghana (Cement distribution business).

However, this is dependent on the size and the type of cement business you are setting up.

How Can One Start A Cement Business In Ghana?

Here are steps to starting a cement business in Ghana:

1. Identify The Type Of Cement Business You Want To Start: Identifying and deciding on the type of cement business you want to start is the first step to take. As mentioned above, there are two major types of cement business which are the cement distribution business and the cement retailing business.

So here you have to decide whether to become a distributor or a retailer. Mainly, your capital is the major determinant of how to get started.

2. Conduct Your Research And Develop A Business Plan: Before starting your cement business, you need to find out how the cement business works, the competition, the target audience, the type of cement that sells fast and the best marketing strategy to apply. All these can be achieved through your research.

Another step to take after conducting your research is to develop a cement business plan. Here you will need to outline both short-term and long-term goals and in detail on how you will run your business.

However, if you cannot draft a business plan, then you will have to hire a professional to do that for you. Though not compulsory.

3. Get A Shop In A Good Location: Whether you are starting as a retailer or as a distributor, you need to have a warehouse or shop to store your cement.

Meanwhile, the location of your cement shop/warehouse matters a lot. This is because you need people to know that you operate a cement business in that area. For this reason, you have to locate your cement business in busy areas like building materials markets, bus stops, or roundabouts.

For cement distributors, though the process involves distributing directly from companies to retailers having a warehouse of your own will be a wonderful idea especially now that you haven’t gotten many customers.

4. Register Your Cement Business: Registering your cement business is very important especially if you are starting as a distributor.

First, you have to register your business with the Registrar General’s Department (RGD).

Then after that, if you are starting as a distributor you have to meet the requirements of the manufacturers and register with them to become their distributor.

5. Source For Supplier And Stock Your Shop: At this stage, you have to go ahead and purchase your cement. As a retailer, you need to find a reliable distributor to supply you with cement.

Then as a cement distributor, you have to pay your distribution fee to the company you are buying from and get your cement delivered to you.

6. Purchase A Delivery Van: Though this is optional, if you have the capital you can buy one. It can serve as an additional means of income as you will be charging your customers to deliver the cement to them.

Conclusion

One thing is starting a cement business and the other most important thing is to get customers.

However, you need to come up with different marketing strategies to get customers within and outside your environment. You can reach out to block Industries and site contractors to advertise your cement business.

To sum it up, starting a cement business in Ghana is one of the most rewarding steps to take and it’s worth the investment.

Ambassador Victor Chidera
Ambassador Victor ChideraAmbassador Victor Chidera is a business consultant, writer and a blogger. He provides lots of professional and expert advice to small businesses, entrepreneurs and organizations. He has many years of experience in business, teaching field, and research work. And his aim is to provide business articles that matters to you both nationally and internationally.
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