Ice Block Machine, Cash Cow Or Cash Pit?
Ice Block Machine, Cash Cow Or Cash Pit?
DO WE NEED ICE BLOCKS?
We live in the tropics with a lot of heat. Even during the rainy season, the heat is still intense, intense enough to make people to ask for cold drinks.
Therefore, besides the conventional function of food preservation, freezers are needed to cool drinks for people. Since most cannot afford fridges and freezers, it becomes imperative to look for ice blocks for cooling drinks.
Even those who can afford Fridges do not have electricity to power them, no thanks to the epileptic nature of electricity in Nigeria. This is the gap ice block business comes in to fill.
The market is vast in the big cities where the population is on the high side. Cities like Lagos, Ibadan, Kano and Kaduna.
The business also booms where there is high traffic of commuters which again takes us back to the big cities. Petty traders use ice blocks to cool minerals and water for travelers.
Not by any chance is sale of ice blocks limited to this. Other consumers are Hoteliers, beer sellers, clubs and even individuals and governmental organizations when they are having events.
Ice block can come out in any shape. In fact, the block will take the shape of the container when it is done.
But generally there are two types in the market. They are the rectangular ones which are made by just pouring water into rectangular holes constructed in the machines. The other is the tied type which is made by pouring water into transparent polythene bags.
Here you have the big type and the small type. The rectangular type is more popular and it commands higher price than the tied type even if when they are of the same size. Nobody can explain why but that is what is happening in the market.
There are two sources to get ice block making machines. You either
get those built locally or the imported ones. To get information on imported ones just goggle ice+block+making+machine.
As for locally made machines you find them in Ibadan and Lagos. However, Ibadan appears to command a higher percentage of the makers.
Prices differ from maker to maker and this depends on many factors. Some of the factors are
• Size of blocks
• Quantity of blocks
• No of compressors (Two machines of the same size with different number of compressors will differ in price.)
• Size of compressors(2HP, 2.5HP or even 3HP)
• Whether the compressors are used(tokuno) or new.
• With or without Stabilizers
The most common machine by local manufacturers is the one built to make 25 rectangular blocks and this goes for about N250,000 depending on who is making it and what materials he is using.
You either sell directly to users or retailers who come to your plant to pack them and sell to users. If you are selling to users it means you will need a depot and freezers to keep the blocks in shape till they are sold.
This of course means more expenses on transportation, space, and cost of labour. You will have to do your cost and benefit analysis to decide, but if you ask me I will say let the retailers carry from your plant and reduce your worries.
But you must be current of prices otherwise the retailers will cut your throat.
During the dry season the price is naturally higher. During this period you can sell a block to the retailers for as high as N100 but during the raining season they may refuse to take it for N40.
Weather, season and competition affect your pricing. You ask questions and feel the market to arrive at your price and this may vary on daily basis.
You just have to be current.
Check out Profitable Small &Medium Businesses For Nigerians
This is the crux of the matter. Is this business profitable? Yes if current is stable. Even if you are selling a block for N20 you cannot lose. With stable current your machine will freeze more quickly and the machine will last longer.
Your raw material is water and all you pay for is the labor that fills in the water and harvest the blocks and of course electricity bill which may not amount to much.
No business can be better.
However if electricity is erratic as we have in many cities these days, it becomes another kettle of fish altogether. If you freeze for 10 hours and the light goes for another 24 hours you get back to square one and remember your compressors have been running.
Not only that, erratic supply of electricity shortens the life of your compressors
We shall see presently. You add a Chinese 15KV generator to take your installation cost to about N400,000. You power with diesel at N160 per litre and run for 20 hours or even 24 hours. This works out at N3200 for fuel alone for one production.
Let us assume you sell for N50 per block, your 25 blocks machine will gross N1250. That is a disaster.
OK, you sell at N100per block which is highly unrealistic unless it is hell hot; your machine will gross N2500. Even at that it is bad business. You have not built in the cost of labour, depreciation for the machine, maintenance for the generator and other inputs.
The only way this business can be profitable with generator is if you have stable electricity and use the generator to fill in the little disruptions.
Or you are loaded and buy a big generator to power a battery of machines and this will run into millions. But, how much block do you make to sell and recoup millions and how quickly.
I may be wrong but my verdict is this, as a struggling man, do not venture into it if electricity is not stable in your place no matter how fertile the market is.
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