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close this bookThe Use of Selected Indigenous Building Materials with Potential for Wide Application in Developing Countries (HABITAT, 1985, 80 p.)
View the document(introduction...)
View the documentA. Technology of production
View the documentB. Investment requirements
View the documentC. Quality of output
View the documentD. Demand for indigenous materials
View the documentE. Inappropriate use of indigenous building materials in construction

B. Investment requirements

36. When an innovative technology has finally been transferred from one country to another, the task of commercial-scale adoption of the new technology in the recipient country depends largely on how some basic constraints to investments for building materials production are tackled. For instance, access to raw materials could be a serious factor inhibiting local investment in indigenous building materials production. Most of the technologies for production of low-cost materials are appropriate at the small scale, with the advantage that they can utilize small deposits of raw materials for their operations, yet it is precisely the small deposits or of raw materials which are often neglected in most countries. Information on small-scale deposits of raw materials, such as clay, limestone and gypsum, is hardly available at any local agency. An investor would typically like to have full knowledge of raw-materials deposits, in terms of the quantity available and the suitability of the material for production. This often involves extensive pre-production tests which are costly, and normally a small-scale entrepreneur would avoid such pre-investment costs.

37. The inaccessibility of raw materials could be due to the lack of access roads to the source of raw materials, and, again, the high cost of providing such basic infrastructure could deter local entrepreneurs from investing in the indigenous building materials sector. Sometimes, an access road to the source of the raw materials may be available, but a suitable site for locating the production plant may be too far away from the source. For example, the lime-pozzolana industry in Rwanda exploits limestone deposits from a source five kilometres away from the factory, while the pozzolana is derived from a volcanic ash cone located about 40 kilometres from the production plant. In most countries where the transport infrastructure is underdeveloped and fuel costs are high, the distant location of basic inputs for production may easily frustrate efforts in promoting wide-scale production of indigenous building materials.

38. The use of agricultural residues, such as rice husk for production of pozzolanas and coffee husk as a source of fuel in building materials production, is an important innovation which can have an impact on cost reduction of local building materials. However, the cyclical nature in which they become available can pose a limitation to the production process. If such agricultural products are to be used in the production process, it is desirable they be available throughout the entire duration of the building materials production cycle which may extend far beyond the period when farmers harvest their agricultural produce.

39. For this reason, an investor may have to purchase large quantities of the agricultural residues at the time they are available and hold them in stock. A small-scale investor will require credit for working capital, in order to ensure a planned output. In most developing countries, there are hardly any effective credit facilities for small-scale entrepreneurs.

40. The overall capital requirements for the production of most indigenous building materials are relatively low and can often be met within the limitations of developing countries. Materials such as lime, bricks and several pozzolanas can be produced with almost all the capital requirements being met from local sources. In a review of country case studies on promotion of indigenous cementitious materials,4/ the investment was found to be as low as $2,500 per 1,000 tons of annual production in the case of gypsum plaster production in Cape Verde. This level of investment was very reasonable in comparison with an amount of $120,000 to $200,00 required for the same output in a conventional cement plant. Even though the capital requirements for production of indigenous cementitious materials are low, the small-scale investor may be even more limited in access to capital. Sometimes, basic capital inputs are not available on the market, and, where the production process is dependent on imported equipment, such as a ball mill to grind the pozzolana, the constraints in foreign exchange supply and the intricacies of import licence allocation may be impediments to the small-scale investor.

4/ See annex I.