The Basics Of How To Start A Cement Business In Nigeria

Cement Business In Nigeria

Cement is one of the most important material needed in the building of infrastructures in Nigeria today, making it a profitable business niche for those looking to start one form of business or the other.

Cement is needed in almost every field in Nigeria.

Religious bodies need cement to build churches and mosques, educational bodies need cement to build schools and skill acquisition centers, the government needs cement to build health care centers, build bridges, construct roads,, etc.

All these, coupled with the continuous rise of real estate business, makes the cement business a profitable one any aspiring business owner can venture into.

So if you are looking to start a profitable business venture in Nigeria, the cement business is one you should consider. But why it is a good idea to start a cement business in Nigeria, it is advisable for you not to start one until you’ve had an idea of what the business requires.

This is why in this article we’ll be looking at what a cement business is, the various opportunities in the cement business industry, and the cost of starting a cement business in Nigeria.

We’ll also be looking at the different ways you can venture into the cement business in Nigeria, from being a distributor, or even a retailer.

Can I Start A Cement Business With 200k?

You can’t comfortably start a cement business in Nigeria with 200k due to the shop rent, and other expenses. Now let’s break down the analysis so that you will understand better.

On average, getting a shop in a good location will cost you between ₦96,000 to ₦180,000 yearly. That is at the rate of ₦8000 to ₦15000 monthly.

And a bag of cement as of September 2023 costs between ₦5500 to ₦6,000. But as a distributor, you can get it at ₦5400 to ₦5900.

So 20 bags of cement x ₦5400 = ₦108,000

Shop rent of ₦96,000 + ₦108,000 for 20 bags of cement = ₦204,000

Just like we analyzed, shop rent varies between ₦96,000 to ₦180,000. But there are some shops rent that cost more than 200k.

Roughly speaking, 200k can’t start a profitable cement business, or else you will struggle through the journey.

How Can I Become A Cement Distributor In Nigeria?

One of the ways you can get involved in the cement business is by becoming a distributor. To become a cement distributor, you have to register with the cement company and as well, order a minimum of 600 bags of cement.

As a cement distributor in Nigeria, you will make more money because you serve as a middleman between the cement company and the retailers.

What Are The Challenges Of Cement Industry In Nigeria?

The following have been identified as the challenges faced by the cement industry in Nigeria:

1. High production cost
2. The cement industry also faces the challenge of high transportation costs, as the transportation cost almost covers the overall production cost of cement
3. Poor state of infrastructure
4. Operating cost and start-up capital is very high
5. Also, erratic power supply can be a challenge in the cement industry.

What Are The Best Cement Companies In Nigeria?

When it comes to the best cement companies in Nigeria there are many players in the Industries. And the most prominent of them all are:

1. Dangote cement
2. Unicem cement
3. Ibeto cement
4. BUA cement
5. Eagle Cement
6. Elephant cement
7. Larfarge
8. NigerCem cement
9. Ashaka cement
10. PowerMax cement

How Profitable Is Cement Business In Nigeria?

Cement is one of the most essential building materials in Nigeria and its profitability is top-notch. And since cement is so much in demand, you can make a profit of ₦100 to ₦500 per bag of cement sold. Hence, this depends on the location of your business.

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

The start-up cost for a cement business in Nigeria can be determined in 2 ways. First, is as a distributor. If you want to start a cement business as a distributor, you will need a whooping capital of ₦5 million Naira on average.

The second way is by starting as a retailer. Meanwhile, it will cost you an average of ₦500,000 to ₦2 million to start a cement business in Nigeria as a retailer.

How Do I Start A Cement Business In Nigeria?

You can start a cement business by following the below guide:

1. Analyze The Cement Market: This is the first starting point. You have to do thorough research to know how the market operates, and how to fulfill the requirements of the business if you want to start as a distributor.

But if you are starting as a retailer you have to understand how the cement retailers played their role to establish a successful business. Additionally, you also research the delivery process (logistics) involved when you start up your cement business.

2. Make Out Plans On How You Can Start Up Your Cement Business: Your plans should include whether you will start as a distributor or as a retailer, the capital requirements, whether to buy a delivery vehicle, space requirements, how many bags to start with, whether you will hire workers or not, and most importantly where to site your business.

3. Register Your Cement Business: You will need to register your cement business with the Corporate Affairs Commission (CAC) if you are starting as a distributor. Also, getting licenses and permits is compulsory for both distributors and retailers. However, fulfilling the license requirements is very crucial and varies based on your location.

4. Get A Good Location: Finding a good location for your cement business should be as important as the sun to the earth. This means that your location shouldn’t be in a hidden environment. Besides, your cement shop should be visible to the public so that they will be aware that such business is within the area.

Also, ensure to have enough space that can accommodate a larger number of cements.

5. Purchase Your Cement: As a distributor, you are required to buy at least 600 bags of cement from the company. Then as a retailer, you have to find a distributor that will be supplying cement to you whenever you make an order.

More so, you can decide to buy a delivery vehicle to supply cement to your customers whenever they buy from you. Though not necessary, if you have enough capital it will be a wonderful idea and also another source of income for you.

Conclusion

Starting a cement business in Nigeria can be immensely rewarding especially when you have met up the requirements.

While the cement industry comes with its challenges, you must prepare yourself by developing a strong business plan that will lead you through.

And finally, we believe that this article will be an eye-opener on some of the requirements needed to start a cement business. It is therefore important that you carry out offline research for further information.

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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