Background

The proposed project envisages the setup of a construction hollow blocks

manufacturing project. Construction blocks industry is an important industrial sector in the

country engaged in producing blocks used as prefabricated material for various

construction activities i.e. construction of road side pave ways, garage and parking

floorings, walls making, block paved driveways, and floor coverings of commercial

buildings, etc.

It is easy to make a concrete block. The successful block yard must however make

blocks of uniform quality and sell them at a price high enough to cover costs and make a

reasonable profit. Before to start a block yard, it is essential therefore to investigate the

economic feasibility of the venture. Determination of level of demand for blocks in the

area (how many per month) and degree of competition from other block yards are

important factors having a significant bearing on the feasibility of the venture. Then comes

the cost estimation based on various methods of production and output.

Factors which influence unit cost include:

 Purchase price or rental of site

 Cost of site improvements: fencing, paved areas for production and stockpiles,

pathways, roadways and buildings

 Cost of equipment: concrete mixer, block making machine and miscellaneous

equipment

 Cost of services: water and

 electricity Material costs

 Wastage

 Maintenance costs of site and equipment

 Output: number of blocks per day – dimensions of block, solid or

hollow. Labor costs

 Cost of finance etc.

According to BSP, the share of construction industry to total GDP has been

steadily increasing, a testament to the importance of this industry in sustaining growth in

the domestic economy from 2006 to 2010. Construction sector has been registered with

a growth rate of 7.9 percent according to NEDA Survey 2008. Housing and construction

is one of the major drivers of growth in more than 40 allied industries and directly adds to

the CONSTRUCTION HOLLW BLOCKS industry. In addition, for the building of roads,

flyovers and bypasses there is a mass and consistent need of prefabricated blocks across

the country. Various construction and real estate development projects are in progress

and are continuously being commissioned which will have high demand of prefabricated

construction material all over the country.

Objectives

In order to make up the backlog and meet the shortfall in the next 20 years, overall

housing construction industry has to be raised to the level of 500,000 housing units per

annum. This is the extent of the annual housing market in the Philippines which positively
predicts a permanent growth in construction sector which directly adds to the potential in

prefabricated building blocks segment of the construction industry.

Business Title/Name

MA. SALOME CONSTRUCTIN SUPPLY

IV MARKET

a. PRODUCTS: CONCRETE BLOCKS AND PRICE

Block Type Standard (as % of Color Price/

Dimension unit
Total)
Masonry Block

600-800
Solid Block 4”x8”x12” psi 10% Natural Grey 12

600-800
Solid Block 5”x8”x12” psi 20% Natural Grey 13

600-800
Solid Block 6”x8”x12” psi 10% Natural Grey 14

THE PROPOSED PLACE OF BUSINESS IS LOCATED AT BRGY CRUZADA,

LEGAZPI CITY

BUSINESS OPERATION

A. REVOLVING CAPITAL: 350,000

B. SOURCE OF MATERIALS

CEMENT: SUPPLIES COMING FROM DIFFERENT HARDWARES WITHIN

ALBAY AREA
 SAND: THERE ARE VARIOUS SUPPLIERS LYING AROUND ALBAY AREA

C. LABOR OR WORKERS

TYPE OF WORK: MOULDING OF BLOCKS

MODE OF PAYMENT: BY BAGS OF CEMENT CONSUMED WITHIN THE

DAY

D. DUTIES AND RESPONSIBILITIES

1. IT IS THE DUTY OF THE MANAGER TO SEE TO IT THAT THE

BUSINESS HAS SUFFICIENT RAW MATERIALS (CEMENT AND SAND)

FOR THE OPERATION

2. IT IS THE DUTY OF THE MANAGER TO CHECK THE QUALITY OF THE

BLOCKS PRODUCED BY THE BLOCK MAKERS

BUSINESS EXPENSES

A. START UP

RAW QUANTITY UNIT COST TOTAL

MATERIALS/TOOLS/EQUIPMENTS

PICK UP TRUCK 1 UNIT 250,000 250,000

SOLID BLOCK MOULD 3 PCS 2,500 7,500

CEMENT (APO TYPE 1) 50 BAGS 265 13,250

CRUSHED SAND 30 CU 550 16,500

WHEEL BORROW 2PCS 2,500 5,000

SHOVEL#2 3PCS 620 1,860

TRAPAL 20METERS 100 2,000

TOTAL 296,110
 B. OPERATING EXPENSES (MONTHLY)

PARTICULARS COST

GAS CONSUMPTION 3,000

PAYMENT FOR WORKERS (170/BAG 23,800

MINMUM OF 5/DAY)

MEAL SUBSIDY 8,400

TOTAL 35,200

SOURCES OF CAPITAL:

PERSONAL SAVINGS: 150,000

INVESTMENT FROM FRIENDS: 100,000

INVESMENT FROM PARENTS: 200,000

PROJECTED SALES

PRODUCT QUANTITY UNIT PRICE TOTAL SALE

2,500 12 30,000
4”x8”x12”
2,000 13 26,000
5”x8”x12”
2,000 14 28,000
6”x8”x12”
84,000
TOTAL SALES