A Mineral Economic Feasibility Study of a Small Brickworks

Abstract

South Africa support is one of the world's fastest growing populations. By the year 2000 AD, South Africa's population is predicted to be 225% larger than it was in 1970. By 2000 AD the total population will have grown to over 54 million people, representing a compound growth rate of some 2,7% Per annum over the preceding 30 years.

How will this burgeoning population be housed? Where will the growth be? It has been predicted, from numerous sources, that the non-European urban population will soar and thereby account for the bulk of the forecast growth. 'Ibis group will grow from 6 million in 1970 to 25 million by the year 2000, a rate of 4,9% Per annum, Whereas, the urban European population growth shall be :relatively static.

Clearly, this phase of mass-urbanization will have to be accompanied by general socio-economic upliftment of the community as a whole. In this regard, the demand for housing, particularly low cost housing, will rise sharply.

In South Africa today, many a prospectiive entrepreneur has identified this situation as an opportunity to establish a building-materials manufacturing plant. Because a brickworks is commonly believed to be a relatively simple operation to ,establish and run profitably, many entrepreneurs have applied their resources to this field. In reality, a small scale operation is found to be barely profitable and financial failure in this regard is relatively common. 'Ibis dissertation investigates why such a paradox should exist.

A host of variables, which can become major pitfalls to a fledgling brick making business, are discussed. Possible hurdles facing such an operation range from raw material properties, the plant's . financial structure, to characteristics of the brick market be understanding of the interactions between these relatively complex facets of brick making, requires a multi-disciplinary approach. The discipline of Mineral Economics is ideally suited to address the range of problems facing the entrepreneurs, who attempt to establish a small brickplant.

The writer's personal Participation, in the establishment of such a plant, in the Pietennaritzhrrg area of South Africa, allowed access to a range of information which has been used in the presentation of this' dissertation. Although this presentation is based on the Pietermaritzburg area, the more fundamental findings and conclusions could be applied in any similar brick market region of South Africa. The essential conclusions drawn from this study are:-

because of the large variety of possible reasons for failure, the establishment of a brickworks can be regarded as a relatively high risk business. In order to reduce that risk, and test all the variables without risking large amounts of capital, a pilot plant is proposed in the form of a labour-intensive hand-moulding operation.

as automated plants producing at low levels of capacity have proved to be unprofitable, it is recommended that once the proposed pilot plant has been established, the next phase of expansion must be to automate the utility and lift production to at least eighteen million bricks Per year. It has been' established that the benefits of operational gearing, financial gearing and economics of scale are effective at this production level and above.

Alternate abstract:

Die Afrika-kontinent dra huidiglik die wereld se vinnigste groeiende bevolking. Suid-Afrika wyk nie af van hierdie tendens nie en dra selfs by tot hierdie hoe groei-statistieke. Daar word voorspel dat Suid-Afrika se bevolking teen die jaar 2000 54 miljoen mense sal beloop. Die syfer is 225 persent boer as die 1970 syfer en verteenwoordig 'n groeitempo van 2,7 persent Per jaar oar die 30 jaar tydperk.

Hoe gaan hierdie bevolkingsontploffing geakkOIrodeer word, en waar sal die groei plaasvind? Verskeie bronne voorspel dat die nie-blanke stedelike revelling sal groei van 6 miljoen in 1970 tot 25 miljoen in 2000, teen 4,9 perserrc Per jaar. In teenstelling daarmee toon die stedelike blanke bevolking relatiewe statiese groei.

Dit is duidelik dat hierdie fase van massaverstedeliking met 'n algemene sosiale verbetering van die gerneenskap gepaard noet gaan. In hierdie verband sal die vraag na behuising, veral laekoste behuising, sterk noet styg.

In suid-Afrika het menige voarnemende entrepreneur hieride situasie aangegryp as 'n geleentheid om 'n toumateriaal-vervaardigingsaanleg te stig. Aangesien'n steenfabriek algemeen aanvaar word as 'n relatief eenvoudige bedryf om op te rig en winsgewend te bedryf, het verskeie entrepreneurs hulle op hierdie terrein begewe. So'n klein bedryf is in werklikheid skaars winsgewend en finansiële mislukking is relatief algemeen. In die verhandeling word daar aandag geskenk aan die redes wat tot hierdie omstandighede aanleiding gee.

Verskeie veranderlikes, wat relangrike struikelblokke vir 'n ondernernende steenfabriek kan inhou,. word l:espreek. Mexmtlike struikelblokke sluit die volgende in: hulpbroneienskappe, die aanleg se finansiële struktuur, tot die samestelling van die mark vir stene.

'n multi-dissiplinere beskouiing moot gevolg word om die wisselwerking tussen hierdie relatief ingewikkelde fasette van steenvervaardiging te verstaan. Die dissipline van mineraalekonornie blyk die mees toepaslike te wees om die reeks probleme wat entrepreneurs in die steenkoolbedryf in die gesig staar, die hoof te bied.

Inligting wat in hierdie verhandeling gebruik word spruit voort uit die skrywer se persoonlike deelname in die oprigting van 'n steenaanleg in die Pietennaritzburggebied van Suid-Afrika.' Alhoewel hierdie gebied as voorbeeld gebruik word, kan die fundamentele bevindings en gevolgtrekkings op enige soortgelyke steenbemarkingsgebied in Suid-Afrika toegepas word.

Die belangrikste gevolgtrekkings van hierdie studie is die volgende:

As gevolg van die wye verskeidenheid noontlike redes vir mislukking, kan die stigting van 'n steenfabriek as relatief riskant beskou word. Ten einde hierdie risiko te venninder, en al die veranderlikes te toëts sander om die investering van groat hoeveelhede kapitaal te waag, word aanvanklik 'n Ioodsaanleg aanbeveel, wat die fonnaat van 'n arbeidsintensiewe handvonningsbedryf noet aanneem.

Aangesien automatiese aanlegte wat teen lae kapasiteit bedryf word nie-winsgewend blyk te wees nie, word aanbeveel dat; nadat; die voorgestelde loodsaanleg gestig "is, die volgende fase van uitbreiding gemeganiseer noet word. Daar is vasgestel dat die voordele van bedryfs- en finansiële benutting en die ekonornie van skaal effektief teen hierdie peil van kapasiteit en hoër is.