market is much larger than that of the few happy who are rich. Why is it that almost nobody is focusing on the rural and urban masses of the developing world, those 2-3 billion people who have such tremendous needs ? These masses are the target for basic consumer products such as shampoos, soaps, soft drinks, but not for the durable goods, which would be of better use. These people have limited amounts of cash available, but put together, these small amounts could represent a considerable market. The way in which these goods are produced is not irrelevant : Henry Ford had already discovered that he had to pay his workers higher salaries in order to make them potential clients for his Ford T-Model. In a similar approach, the small entrepreneurs can become clients for cement products. The trend towards urbanization in developing countries is unbroken. In Asia, about half of the population lives in big cities. The urbanization factor in Africa is somewhat lower. In Latin America, approximately 70% of the 400 million inhabitants live in urban areas and the trend is still heading upward, expected to be approximately 75% of the people living in cities by the year 2010.

The market segment of building construction for the rich is relatively small and saturated. As we have seen, the market potential of housing construction for the lower middle class and low-cost housing is huge but difficult to reach with traditional solutions. The main constraints are the low purchasing power and under-developed marketing channels. So far, most of the building materials and "Building Construction Solutions" could not meet the aim of ecologically, socially and economically sustainable development, set by many financing agencies. Our experiences have shown that cement allows to produce various products that can meet this aim, and they can be combined to provide a "sustainable housing solution".

Why do manufacturers, suppliers, commercial and other formal institutions not meet the needs of the low-cost housing market, and why do they not offer the right product ? Raw materials such as cement, sand and steel are difficult to use for the customers and expensive, when not used correctly. Housing finance and institutional support is not easily available, and expertise from architects and engineers are inaccessible and unaffordable for the lower and middle income groups. In the low-cost housing segment, there is a vast demand, or at least a need, for prefabricated, affordable and easy to use building elements such as MCR tiles, Ferro-cement channels, concrete blocks, compressed cement stabilized earth blocks, reinforced concrete doors and windows, etc. Considering the fact that the trend is going towards complete housing solutions, we get aware of an additional demand for infrastructure elements, like concrete posts for street lights, concrete sewage tanks and cement based rain water tanks. If we combine all these elements we can think of developing and marketing quite attractive building systems with built-in expert services.

From Need to Demand

Since the purchasing power of the low-cost housing segment is rather weak, we cannot think only of building elements. We also have to consider how to offer home upgrading loans, leasing systems or credit lines. Besides that, our future customers have to be educated to be able to make a better choice and to become aware of the advantages of a better quality product.

Marketing development through small and micro-enterprises

Micro-enterprises are becoming more and more important in the building construction market because they are decentralized, very flexible and very close to the customers. These entrepreneurs know the local market better than anybody else and they can quickly adjust to any changes in the market situation due to their smallness. Micro-enterprises spread all over urban and rural areas can produce, repair, replace and therefore offer a comprehensive service to their customers. We have learned from experience, that though it takes several years to develop this entrepreneurship, such a network of micro-enterprises creates a strong basis for sustainable market development. Several examples have proven that such small workshops are able to compete in the market and to realize large low-cost housing projects with several hundreds or thousands of buildings. We suggest to strengthen this network of small enterprises and to thereby create a win-win situation for the customers, the entrepreneurs, the cement industry and SDC. Developing the low-cost market segment means :

l Selection of potential entrepreneurs

l Deliver housing solutions, not bags of cement

l Entrepreneurial and professional training of micro-enterprises,

l Long-term planning and technical support and R & D

l Establish a network of local manufacturers and sales agents

l Quality management

l Marketing and public relations

level of over 6 million sq.m. (60,000 tons of cement per year), other MCR products not included. The Swiss Agency for Development and Cooperation (SDC) has been supporting through the Swiss Centre for Development Cooperation in Technology and Management (SKAT) the creation of an international network of low-cost cement-based roofing technologies for the last 10 years. The results of this development are over 1,000 small enterprises producing MCR tiles in 33 countries. Although the progress has been significant, the potential is still much bigger considering the huge needs of the housing market and the possibility to produce the MCR products than the tiles. The SKAT/SDC policy in MCR tiles is looking at the two sides of the coin :
How to tap the demand of people with low budgets and how to support small rural and urban enterprises, to produce MCR products and in the process create jobs that increase the purchasing power. So far, more than 7,000 workplaces have been created worldwide. The technology has been developed in such a way that high standards of quality for products and services can by met.

The MCR tiles are targeted for all market segments, from upper middle class to the low-cost housing segment. Grey pan tiles can be used to replace thatched roofs or galvanized iron sheets, whereas coloured MCR tiles of more decorative shapes are used on the roofs of middle class houses and even villas. It is important to be aware that poor people want to buy high quality, long lasting products for their roofs. They don’t want to buy a roofing tile that has the stigma of being a poor people’s building material. It is therefore important to start marketing and public relation activities in the middle and upper middle class sector as well as in the public, governmental and NGO sector. If the MCR tiles are sold once in these segments, they will be acceptable for the low-cost housing sector.

The roofing material market is depending on the seasonal changes of strongly fluctuating weather conditions. Most MCR workshops therefore are looking for possibilities to diversify their products. Many of them have begun to produce cement blocks, cement stairs, floor tiles and wall tiles, septic tanks for latrines, rain water tanks, door and window frames, ferro-cement channels and many other cement based products. The MCR tile is an excellent starting point for good and low-cost housing. In the future, MCR has to expand into other fields, like offering complete roofing solutions including after-sales services like maintenance and repair. It can also expand into other ecologically sound building materials and cement-based products. Further development into ecologically and economically more efficient low-cost buildings would need further research and development and professional education of manufacturers, sales agents and building contractors.

As we have seen, the market potential is enormous, but only if we do the right thing.

"A bag of cement means nothing to a home builder, whereas concrete elements and MCR tiles mean a house". If we develop economically and ecologically efficient housing solutions (Eco Habitat) for the middle class and low-cost housing sector, these market segments could be tapped with new ideas.

SDC can contribute ten years experience in developing the MCR technology, setting up training programs with the respective manuals and tools. SDC and its partners have profound experiences in promoting the establishment of small enterprises, training entrepreneurship, establishing quality assurance systems, doing monitoring and controlling of the network with a total of over 1000 enterprises.

Contribution of Industrial Groups Industrial companies may contribute their know-how and experience in the cement market, including product development, research and development as well as market assessment methods.

At the same time, of great value would be the retailer network, product, branding, quality control system and its strategic expertise. A very helpful contribution could also be some marketing support, e.g. combined with franchising systems, or leasing the equipment to the MCR workshop, or the supply by cement on a 90-day term, etc.

A synergy and a win-win situation could be created by establishing a strategic link for the development of a more formalized marketing channel for MCR products (tiles, blocks, stairs, pipes, vaults, posts, tanks, etc.) through small enterprises as well as through the existing networks of both partners. By taking advantage of these synergies, the marketing of suitable cement products for low-cost housing can be speeded up and scaled up. By following this joint path, the vision of realizing ecologically, economically and socially sustainable housing solutions can be achieved. q