Targeting the Huge Market for Low-Volume Secondary Roads
Note: This project is ready for investment. A comprehensive business plan already exists. Further information can be provided on request after signing a Non-Disclosure Agreement.
Vision and Mission
The company “DUSERO Construction” will introduce a road maintenance service for durable secondary roads (low-volume roads) in Ghana and subsequently other African countries by introducing a superior German technology that is not yet existent in Africa. Low volume roads are non-paved roads with average traffic of less than 400 vehicles per day, and heavy load traffic with a maximum axle load of 10 tons. In Africa, these roads represent a very interesting market niche that is ready to be exploited.
The company's name and logo (initial draft) reflect its primary activity: construction of durable secondary roads. DUSERO stands for:
DUrable SEcondary ROads (in English)
ROutes SEcondaires DUrables (in French)
The German engineering company PÖMA has developed graders, stone crushers, vibratory rollers, and other machinery for road building maintenance, for landscaping. This machinery can be attached to any tractor with a three-point hitch. A separate prime mover is not needed which results in lower capital cost. The technology has been proven and tested for 30 years. Research and development has resulted in a highly competitive edge. Newly built roads are high quality and need less maintenance than conventionally built roads. Neither chemical additives nor imported materials are needed.
The main target groups are:
- Civil authorities, municipalities and general government
- Big agricultural estates, especially plantations for cocoa, coffee and timber
- Civil engineering companies
- Industrial corporations
It is planned to reach a market penetration rate of 5% in Ghana within three years, which is proportionate to a turnover of approximately €5 million.
DUSERO Construction will offer:
- Building off low-volume-roads
- gravel roads
- earth roads
- Maintenance of existing roads
- Upgrading of earth roads to gravel roads
- Fixing of public squares and private work yards
- Building of access roads and road systems on factory premises, manufacturing plants, agricultural plantations, etc.
The company’s vision is to considerably improve transportation facilities in Africa. Personal experiences have shown that a major part of transportation in Africa happens off the main roads. Existing systems of secondary roads are maintained badly and rarely, if at all. Additionally, there are many gaps in the low-volume road systems andgood gravel and earth roads are scarce. Low cost road building and maintenance are virtually nonexistent. Therefore, transportation costs in sub-Saharan Africa (US$ 0.04 – 0.14 per kilometer per ton) are much higher than in other regions of the developing world (US$ 0.01 – 0.04 per kilometer per ton). This is true both for urban and rural areas. High transportation cost is a key challenge for agribusiness leading to farmers from remote areas not being able to offer their produce at centrally located markets. This company's service will solvethese problems.
The long-term goal is to develop the venture into a leading company that offers secondary road construction and maintenance in all of Africa. Positive impacts on national budgets can be awaited, because good gravel roads may prove as a better alternative to bad paved roads.
Key Factors for Success
The key success factor is the sophisticated technology made in Germany that will open up a new chapter of construction and maintenance of secondary roads in Africa, and would allow better quality below average prices. Existing roads can be improved when being maintained with this technology. The unique DUSERO stone crusher allows the use of any stony material, including old pavement and debris, thereby saving cost. No adhesive agents are needed, which is beneficial for the environment.
- Solid, long-lasting roads: Without maintenance, these roads last for 3 to 10 years. With maintenance once a year, the roads would last indefinitely.
- Flexibility: All equipment can be attached to tractors; no separate prime mover is needed. Several subsequent work steps can be carried out with one tractor, which will dramatically reduce capital costs, allowing the company to operate at highly competitive prices.
- Reliability: all equipment is low maintenance and can be easily maintained locally by exchangingworn out parts. There are no complex electronics involved, thereby enabling repair shops to do the maintenance with simple tools and a local workforce.
- Durability: The technology is proven and has a track record of more than 30 years.
- Environment friendliness: there is no need for imported materials and no adhesive chemicals are necessary.
- Cost efficiency: Low cost.
Strong local networks are also very important. In Ghana, the leading partner has been active for many years. In the expansion stage of the corporate development we will also build on strong local partners. Close connections to the producing company in Germany will make sure that the customer’s needs will be met instantly.