THE BUSINESS OF SUPPLYING BUILDING MATERIALS IN KENYA

Dear entrepreneurs, with real estate sector, now thriving, building materials such as sand, ballast, and building stones are in great demand.

Everywhere buildings are coming up as people build their homes and housing companies build estates.

You can start supplying stones, sand, and ballast to these projects and be part of this real estate boom.

The model is simple, it involves buying and transporting these materials in order to those building houses.

I will mainly concentrate on those around Nairobi and environs and on the sand, building stones and ballast, though there are many other materials you can supply.

*Equipment*

The only equipment needed for this business is a well-maintained lorry of good capacity. Many banks such as NIC Bank specialize in asset finance and can advance you some money towards the purchase of a lorry for this business.

Other banks can also advance you loans as long as you meet their terms and conditions. At the moment, Kenya Commercial Bank has a deal with Tata trucks where they can finance within certain terms and conditions.

This business requires a big capacity lorry such as 7,000 tonnes and above. It also requires a well maintained or new lorry. Makes such as Isuzu are good but will cost more. Tata and Mitsubishi are equally good but mostly when new.

With over Ksh.1 Million, you may get a good lorry which can start you off. A new Tata may go for Ksh.3 Million to Ksh.5 Million depending on capacity.

There are dealers who can give you a truck on down payment of anything from 50% then the rest is paid monthly for a period of 12 months, 24 months or more plus other conditions depending on the agreement.

As usual, if you opt to go for a used truck, be ready to have a reliable mechanic thoroughly check and test the engine before committing. In any case, don’t even think of going for a very old truck, you may never have peace of mind.

*Stones*

Quarry stones are available in Lukenya, Tala, and other quarries while machine cut stones are available mostly in Juja.

Many other quarries sell machine cut stones but those from Juja have been known to be more durable.

Stones have various grades, quality, and sizes. You must choose the right stones depending on your customer requirements.

*Ballast*

Ballast (kokoto) is available from quarries in Mlolongo, Kitengela, and others. There are various sizes depending on the work to be done.

*Sand*

Unlike stones and ballast, and is not from quarries. Many dealers mine sand from river beds in Ukambani, Kajiado, Ngong, Mai Mahiu and many other places.

The buying cost of sand will depend on where it is mined from. Some dealers collect free after paying local brokers or authorities.

*Sales*

In this business, good networking is very important. You may never get any business without relying on contacts. You need to develop good contacts among fundis, contractors, quarry owners, colleagues, other dealers, brokers, relatives and friends.

It is through these people that you will get business.

Your costing will mostly be based on transportation costs to locations where the materials are to be delivered. You need to know the most cost effective location to get the materials from, bearing in mind the quality too.

For example, delivery of machine cut stones to places such as Syokimau, Mlolongo, Rongai, Town Centre, Westlands, Industrial Area may cost between Ksh.50 — Ksh.55 per piece depending on quantity.

Normal quarry stones are sold in terms of running feet. 600ft or 800ft may sell for between Ksh.25,000 to Ksh.45,000 depending again on the quarry, quality, size and location where they are to be delivered and mode of transport.

Ballast is mostly sold for approximately Ksh.1,000 or Ksh.1,200 per tonne at the quarry. You will charge your clients inclusive of transport depending on where they are located and tonnage of your lorry.

Equally, sand is sold inclusive of transport therefore, make good estimates depending on the tonnage of your lorry and fuel consumption. A 20 tonne lorry can deliver with Ksh.35,000 to areas such as Kayole or Embakasi.

*Returns*

The returns in this business will depend on several factors. Since the business income is mostly based on transport, the consumption of your lorry will play a major role.

Old vehicles consume more fuel than new vehicles of the same engine capacity under the same load, therefore, if your lorry in much older and in poor mechanical condition, you will lose some income on fuel consumption.

With good contacts and connections, you can make between Ksh.30,000 and Ksh.100,000 per day on average, after paying the driver, turn-boy, county government levies, and after fueling for the next day.

If you get a contract where an estate or gated community is being built, then you will literally be laughing all the way to the bank, everyday.

Avoid trouble with the police by having your lorry in good condition, with valid inspection sticker and insurance cover.

If it is on loan, some banks will insist that you install a tracking device at your cost.

In addition, ensure that you have made arrangements for a secure place where your lorry will be parked overnight, not far away from your area of operation.

The initial investment in this business is high, but with good connections, returns are also high, and since several financial institutions have packages that can help you acquire a lorry, why not start researching on this business now?

Your research should include the location of quarries, prices of materials, lorry types and capacities, weigh bridges, financing options, contacts and other aspects of this business.

When Joseph Kamau Kiminda decided to start a business specializing in construction material, his friends and relatives — including his parents — discouraged him, saying he was too young.

In 2010, aged just 22, Kamau decided to invest the little money he had saved while still a university student to start May Quarry Mines which supplies building materials in Kiambu and Nairobi.

In the beginning, he had no problems delivering the small orders.

However, when he landed the occasional big orders, he would take the materials from the quarry on credit and would pay after the client had paid for the deliveries. This, he said, earned him the trust of his suppliers.

Before he went into the business – a gender development studies graduate – Kamau used to write proposals from Non-Governmental Organisations at a fee. Initially, he never had any interest in business, because with a degree he expected to be employed. He however changed his mind after one of his friends invited him to visit his firm, which also supplied building materials.

This, he says, inspired him to borrow a leaf from his friend and he does not regret venturing into the business.

“When I left the university, I had saved about Sh.500,000 and when I decided to go into the construction materials business, my parents and friends said I wasn’t mature enough. They thought it would never work for me and they kept telling me I should quit and get employed,” Kamau said.

He refused to bow to the discouragement and as time went by, his business grew forcing his parents to support it.

He started supplying materials to individuals but today, his main customers are real estate companies based in Kiambu where the housing business has boomed in recent years.

“I have supplied materials to Migaa estate and also to Eden Ville,” Kamau said.

His company deals with all building materials, ranging from sand, building stones to ballast and ventilations blocks which are moulded at his company’s marketing site along Kiambu Road.

He also supplies mazeras stones, pavement blocks and other building accessories.

In future, he said he wants to be one of the recognized suppliers, saying there are no impossible mountains in business and the only requirement is determination, hard work and patience.

However, like other businesses, he is still facing major challenges but what baffles him the most is when potential clients deny him tenders due to his age.

“Big companies have on several occasions denied me orders claiming they do not trust me because I am too young,” he said.

Despite his challenges, he urges young people not to stay at home and wait for white collar jobs.

By

Timothy Angwenyi
Business Consultant

Justine Nyachieo
Business Man & Mentor

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