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Presented to:
Proponents
December , 2010
Chapter 1
Introduction
Even before the birth of Christ, buildings and other establishment have
long been built around the globe. These establishments serve several needs of
the society. A building serves as a shelter of the human habitat. Others define it
as an edifice, an enclosed structure over a plot of land having a roof and are
used in different man’s activities such as manufacturing or living. One of the most
famous and probably the most common building of all is a house. Houses
definitely serve as a dwelling for one or more persons, especially for a family.
even during the era of Barter trade economy of which people trade their strength
and ability to built or construct a house for something of a value. As years pass
by, the construction industry nurtures; the first skilled carpenters began to trade
developments, there had been a dramatic shift in the usual paradigm of the
construction industry.
Nowadays, with the introduction of steel and concrete the construction industry is
now unstoppable from booming. Steel gives the strength while the concrete
blocks provide the outside support that was too expensive to do using bricks.
condominiums and subdivision have suffered much due to the fall of the global
Parallel with the growth of the Asian economy, American and European
investors start to take a risk and put up businesses in the country. This growth of
the Philippine economy is depicted by the vivid boom of Davao City’s economy.
as the best city when it comes to being the city with the fastest construction
clearance and permit processing, furthermore, Davao ranked second as the city
order to have a longer durability and sturdier building. Having a good structure’s
manufacturing company. The proponents intend to add rice hull ashes to make
the hollow blocks sturdier and stronger. Having rice hull ashes added on mixture
used in making hollow blocks would also mean waste reduction and recycling of
The proponents intend to name their company 5 A’s Hollow Blocks., which
will be situated along Malagamot Road, Panacan, Davao City, since the area is
Chapter II
Marketing Aspect
This chapter will discuss thoroughly the whole marketing aspect of the
research. The proposed business’ market description, the past and projected
demand as well as the supply made available in the market. In addition, this
chapter will discuss the pricing strategy and the proposed marketing program of
The market study is the lifeblood of virtually any business feasibility study.
The market study is the first step that the proponents of a research should do in
order to test the feasibility of their study. This is done to properly understand the
customers’ needs and how should the proposed business penetrate the market.
Market Description
Hollow Blocks are dense and hollow cement concrete blocks used as an
As the construction industry grows wider day by day, the demand for
hollow blocks is good. In Davao City, different national and multi national
corporations intend to penetrate the city, commerce becomes good and more
block manufacturing firm in Davao City. The results of the survey were combined
with the data gathered from Davao City’s business bureau. This is done to
supply.
asked how much do they produce in a month, whether they produce daily or they
just produce whenever there are orders. Each Hollow block firm is also
made to carpenters and the data gathered from National Statistics Office annual
Report for the 3rd Quarter of 2009. The carpenters were asked if how many
hollow blocks will be utilized in building a house with the dimensions 6.2 m x
2.7m and 9.7 m x 2.7 m. The number of household built during July to October of
2009 is multiplied by four (4) in order to get the total number of households built
last 2009. The results of the survey on the sample carpenters were accumulated
and averaged multiplied with the number of households built during 2009.
Past Demand
Table 1 shows the demand for Hollow blocks for the past five (5) years.
Davao City alone, 1,944 houses were built in each quarter of 2009 or 7 776
house were built for the whole 2009. Consequently, using the data gathered from
the survey which states that approximately 760 hollow blocks were used in
Using the 2009 demand, 2005, 2006, 2007 and 2008 data were calculated
Projected Demand
Based on the past five (5) years data on the demand for hollow blocks, it
can be assumed that the 1% increase in annual demand for hollow blocks will
blocks, then the 2010, 2011, 2012, 2013 and 2014 demand of hollow blocks can
be calculated. Table 2 shows the projected demand for hollow blocks. This
projected demand is corroborated by the facts that businesses both local, national
and multinational companies have emerged in Davao City which equated to the
boom of the construction industry which is also parallel to the increase in the
YEARLY
Table 2. Projected demand for the next five years.
Table 3 shows the data about the supply of hollow blocks for the past five
(5) years. The data was from the survey conducted to the selected hollow block
manufacturing firms in Davao City and the data gathered from the Davao City’s
produces approximately 5500 blocks a month or a total of 66 000 blocks for the
whole 2009. The average number of blocks produced by each firm is then
multiplied to the total number of hollow block manufacturing firms in Davao City.
According to Davao City’s Business Bureau (2010), there were 83 firms in the
whole Davao City. Therefore, a total of 5,478,000 blocks are being supplied by
the 83 firms for the whole Davao City. Having assumed a 1% annual increase in
the supply of blocks, the 2005, 2006, 2007, 2008 and 2009 supply of hollow
is a fact that the cost of expanding business is far too high that most companies
In the interview conducted by the proponents with KBF Hollow blocks, the
manager cited that there is actually a risk in producing too much because it might
cause inventory obsolescence since most of hollow block companies’
manufacture more when there are orders. And when orders come, they
sometimes reject such orders for they are no longer able to meet the quota ask
to them because of a lot of factors. This rejection is a clear picture of the lost
Projected supply
blocks for the past five years then it would be safe to assume that there will also
be a continuous 1 % increase in the annual supply for the next five years. The
Table 5 and Table 6 compare the demand and supply data. Table 6 shows
a comparison of the past 5 years demand and supply. As shown in table 5 and
table 6, there is a big gap between supply and demand since 2005 and this gap
continues to grow. This gap allows 5A’s manufacturing to penetrate the market.
gap. 5A’s hollow blocks aim to produce 130% more than the usual production
construction companies in Davao City. It is also a fact that parallel to the growth
of the construction industry in Davao City is the growth of hollow blocks
manufacturing industry.
Average number
of blocks 62,797 63,425 64,059 64,700 65,347
produced by a
single firm
(Annually)
Annual Supply
of Blocks in the 5,212,129 5,264,250 5,316,893 5,370,062 5,423,762
whole Davao
Table 3. Past supply for the past five years (Average number of blocks that
each hollow block manufacturing firms are able to supply
Figure 3. Graph of the Annual Supply of Blocks in the whole Davao City for
the past 5 years
Average number
of blocks 66,000 66,660 67,327 68,000 68,680
produced by a
single firm
(Annually)
Annual Supply
of Blocks in the 5,478,000 5,532,780 5,588,108 5,643,989 5,700,429
whole Davao
City
Table 4. Projected Supply for the next five years (Average number of
blocks that each hollow block manufacturing firms are able to supply)
Figure 4. Graph of the Annual Supply of Blocks in the whole Davao City for
the next 5 years
Table 5. Comparison of Annual Supply and Demand for the past 5 years
Figure 5. Comparison of Annual Supply and Demand for the past 5 years
Capacity
Table 6.Comparison of the projected Supply and Demand for the next 5
years
Figure 6.Comparison of the projected Supply and Demand for the next 5
years
Price Study
buyers mind. 5A’s decided to use Skim the cream pricing or also known as Price
Scheming. Based on the result of the survey that the proponents conducted, the
market are willing to buy 3 and 4 inches thick hollow blocks at 7.50 pesos and 6
inches thick hollow blocks at 12.0 pesos. This price is just within the range of the
With the set average market price for hollow blocks, 5A’s will take a risk
and offer its hollow blocks for 8 pesos every 3 or 4 inches blocks and 12 pesos
Researches show that the addition of Rice Hull Ashes by at least 30 percent by
weigh or 50 percent by volume of Rice Hull ashes will not distort the hollow
blocks hence it will make the cement lighter, porous and stiffer. In addition, the
cost of producing a single piece of hollow blocks using a mixture of sand, gravel,
cement and rice hull ashes is cheaper than the ordinary mixture for the reason
aforementioned above, the ashes reduces the ratio of expensive cement and
gravel. Table 7 shows our products price and our close competitors’ price.
Promotions and other marketing strategies are done to make the product
known to its market. Promoting the product links the buyer and seller. 5A’s
Hollow blocks will conduct different Marketing programs in order to catch and
The entity considers marketing of its product vital for the business to be
feasible. 5A’s hollow blocks will be utilizing radio advertisement for its first month
of its operation and 5A’s will be distributing pamphlets and business cards to
posted on different public utility vehicles around the metro for this will stimulate
demand of the product, it will persuade the customers to patronize 5A’s hollow
blocks product
companies in Davao City. Not only that, 5A’s hollow blocks will be initiating
discount programs to those construction companies whom will sign contacts with
Hollow Blocks
Hollow Blocks
Table 7. Price Table
Sir/ Madam
We are 3rd year student from the University of Mindanao taking up BS in
Accountancy. As part of the requisites of our research subject, we are currently
conducting research about the feasibility of a Rice Ash Hollow Block
manufacturing company. We would like to ask you some questions stated below.
Rest assured hat all information taken will be treated with utmost
confidentiality.
QUESTIONNAIRE
Name:____________________________________ Occupation:
_________________
How many block are used in building a 60 square meter house having a wall
dimension of 6.2 m x 2.7m and 9.7 m x 2.7 m? _____
Daily _____ Monthly _____ Semi annually _____ Quarterly _______ annually
______
___________________________
Sir/ Madam
QUESTIONNAIRE
How much is your price for 3 inches? _______ 4 inches? _______6 inches?
_______
___________________________
Chapter III
Technical Aspect
This section of the paper discusses the technical aspect of the study. It
reveals the description of the target market, market supply and demand, plant
Location
near corner Malagamot, Davao City. This location is ideal for the site is
business is situated in a location that is a distant apart from its competitors; the
Finally, the most important reason why the proposed location was
selected as the plant site is because Panacan belongs to District II, a district
Region XI. The construction of factories around the proposed location provided
will increase the demand for blocks would be parallel to business’ profit.
Location
Figure7. Map
Plant Layout
Gate
Tank
Production Schedules
Molding Everyday
Within the
Day
Drying Everyday 2 to 32
days Within The
Day
Gantt Chart
Activities
DATE (2011)
JULY AUGUST SEPTEMBER OCTOBER NOVEMBER
1 - 15
16 - 30
1 - 15
16 – 31
1 - 15
16 - 31
1 -15
16 - 28
1 - 15
16 – 31
Capital
gathering
Finding a
location
Securing a
permit
Canvass and
bidding of
materials
Purchase of
materials for
the
construction of
plant area
Start of Plant
Construction
Start of Plant
Construction
Purchase of
equipments
and materials
for operations
Hiring of
employees
Grand Opening
The Gantt chart above shows the major activities that 5A’s Hallow Blocks
will perform before its Grand Opening. First is the gathering of capital that it will
need in starting its business. It may be from investors of the owners as well as
from external financing from outside sources like creditors. Second, is to find the
location suitable for the business. The proposed location will be along Km 14
Panacan, Davao City. Then secure the necessary business permits from City
Hall, DTI and other regulating government agencies. After that, is the canvassing
and bidding of materials from potential suppliers. If the required permits are
available, then construction of the plant area can be started. After the plant
operations. Simultaneously is the hiring of employees. Lastly, if the all things are
Product Specification
Raw Materials: Cement, Sand and Gravel, and Rice Hull Ashes
Particle Size: Sand and Gravel Pass through a wire mesh no. 15
The product that 5A’s Hallow blocks would like to produce is hallow blocks
made from cement, sand, and gravel, mixed with rice hull ashes to improve its
Production Process
Ordering, Batching, and stock Piling of Raw
Materials
(Cement, Gravel, Rice Hull Ashes)
Molding
Drying
Curing
whenever the supplier notifies that they cannot delivery a certain raw material,
the alternative supplier should be contacted. Sand should at least be one load of
a six wheeler truck, gravel and aggregates should at least be 1 load, cement
should be Portland cement and should at least be 80 sacks per delivery, and the
be batched in order to assure that no materials are being wasted and also to
should be stored in a less moist area and should be placed over a wooden
platform about 20 cm above the ground and 50 cm away from the walls. Each
cement pile should not be more than 10 bags of cement each row. The sand can
in order to protect it from being unwanted sediments such as animal dirt, etc.
Dirty sand should never be used in the production of hollow block because it
might distort or reduce the adhesive value of the concrete blocks. Thus, each raw
Having checked the quality of raw materials, they can now be mixed up
in a ratio of 1:3:6 for cement, sand and gravel. In each 1 sack of cement, an
added. These are first mixed manually and then being place in a mixing machine.
Afterwards, these are being place in pails and are to be poured on the molding
machine. Each release of the machine, a plate is being prepared. The plates are
used in carrying the molded block towards the drying area. Once the blocks are
dried, they are placed in the storage or curing area in a manageable order. Every
day, the blocks are being cured in order to enough moisture. Curing allows the
cement’s hydration process and control the internal temperature that is being
Images
Equipment Price Quantity Description
3 hollow block
3 "hollow machine -5pcs
block 27,000 1 per
machine" release w/ electric
motor
4” hollow block
4 "hollow machine -5pcs
block 27,000 1 per
machine" release w/ electric
motor
6” hollow block
6 "hollow machine -5pcs
block 27,000 1 per
machine" release w/ electric
motor
A six (6) wheeler
Nissan truck that
Delivery
1 will be used for
Truck
delivery of hollow
blocks
A tool used in
Shovel 150 6 picking up sand,
cement and
gravel
Will be used in
the office for
recording
A set of transaction, sales
2
office table 2459 and marketing
and chair transactions and
will also serve as
a front desk.
Will be used to
entertain visitors
Lounge Set 3450 1
and for business
transactions
Used to filter
Sand Sieve 300 1 cement, sand and
gravel
1. Cement
business. It states the type of the business itself, the organizational structure of
its members with the corresponding the Job title, Job description, the
Type of Business
by mere agreement of the partners and can acquire a greater capital compared
The firm shall be established udder the Civil Code of the Philippines after
at will and id composed only of general partners in order for the entity to be able
to attract creditors in case the entity needs it so. In addition, the partnership shall
Partners
Manager
Laborer
Delivery Staff
Financial Projection
Income Statement
Chapter VI