There are many great businesses to start in the Philippines. However, how to start a sand and gravel business in the Philippines is a growing question, so today, we will be addressing this question by exploring the process of how to start a sand gravel business in the Philippines, and we will also be diving into how to start a quarry business in the Philippines for complete beginners.
How To Start A Sand And Gravel Business In The Philippines
1. Research The Industry And Wider Market
The first step for any successful business in the Philippines is full market research, including the industry and the wider markets. Previously we have explored the process of how to conduct market research for small businesses in the Philippines, and I have added the link above for your reference. Nevertheless, here are some key points to consider.
- Are There Gaps Within The Market?
- Can Government Policy Impact The Gravel And Market Business In The Philippines?
- Is The Industry Growing, Declining, Or Stabilising, And Why?
- What Are The Laws That Can Affect The Market?
- What Is The Demand For Sand, Gravel, And Other Materials?
- What Services And Products Are Currently Being Offered In This Industry?
These are a few basic questions; however, asking these simple but useful questions can help you make better decisions during the planning stages of starting a gravel and sand business in the Philippines. Once market research has been completed, the next stage is to get your research and ideas on paper and create a business plan.
2. Create A Business Plan And Financial Statement
Some small businesses in the Philippines cost a lot of money to start but have low maintenance costs; other businesses can be started very cheaply but have higher maintenance costs. Creating a business plan and financial statement will allow you to understand the full costs of starting a sand and gravel business / the full costs of starting a quarry business in the Philippines.
Filipino Wealth has a free downloadable business plan and financial statement available to readers. However, below are the leading questions asked when starting a gravel business in the Philippines.
- How And When Will My Business Make Money, And What Will The Profit Be?
- Is This A Good Business For Me And My Experience?
- What Are The Income Opportunities For The Sand And Gravel Business In The Philippines?
- What Are The Opportunities And Threats To Your Business?
- What Are The Reasons This Business Will Fail?
- What Areas Of The Sand, Gravel/Quarry Market Am I Not Confident In?
- What Will It Take For This Business To Succeed?
- Who Are The Competition, And What Are Their Strengths And Weaknesses?
When creating a business plan for a quarry business in the Philippines, it’s always a good idea to be open and honest. Gaps in knowledge are not to be seen negatively. On the contrary, highlighting your inexperience can save you a lot of time and money in the long run. Once you have your business plan, it is time to head back to research, but this time it’s on law and regulation.
3. Research Industry Licences And Business Law
There is a great deal of law that you may wish to investigate when starting a sand and gravel business in the Philippines. Today we will explore licenses and laws that cover this topic. However, as this industry is continuously changing, we recommend speaking to the Department of Environment & Natural Resources and other government entities to ensure safe, legal practices.
Republic act no. 7942 – Section 46 covers the permit for commercial sand and gravel. And states, “The provincial governor may grant any qualified person a permit to extract and remove sand and gravel or other loose or unconsolidated materials which are used in their natural state, without undergoing processing from an area of not more than five hectares and in such quantities as may be specified in the permit”.
Executive order no. 224 also covers “rationalizing the extraction and disposition of sand and gravel/lahar deposits in the provinces of Pampanga, Tarlac, and Zambales”. DENR Administrative Order No. 2000-25 also covers material law and other similar topics such as mining.
When it comes to licenses, businesses in the Philippines will need an existing environmental Compliance Certificate issued by the Department of Environment & Natural Resources. You will need to apply via the industrial sand and gravel application (IPA-SAG) to gain this requirement. The official application website states that anyone qualified may apply for an industrial sand and gravel permit for areas covering more than 5 hectares but not exceeding 20 hectares.
Additionally, licenses and requirements may differ from area to area. DTI has recently launched a free mentoring program. If you are having difficulty at this stage, you may find using a free service such as this useful in starting a sand and gravel business in the Philippines.
4. Find The Suppliers / Quarry Businesses
This stage is optional. This is because businesses operate differently, and therefore there may be different stages depending on what type of business you plan to manage.
For example, if you are looking to sell the sand and gravel without getting involved in the extraction and quarry process, the next stage is to find suppliers. However, if you want to start a quarry business in the Philippines, you may want to head to the next stage, where we will cover quarry businesses in the Philippines.
5. Create Your Sales Channels And Network Your Business
One of the most important parts of a successful business is its sales. So when setting up a sand and quarry business, it’s time to create your sales channels, network with other businesses in the industry, and start earning income from your new business.
Networking is extremely important in the Philippines. The reality of business is that it’s not always what you know but who you know, especially in the gravel and sand business. However, there are many other ways to build a business, including a website and social media.
From our research looking through hundreds of different sand and gravel businesses in the Philippines, it’s clear that many businesses have been in this industry for many years; however, when it comes to technology (including suitable websites and active social media), they fall behind leading to opportunities for tech-savvy entrepreneurs.
Another option for entrepreneurs if you are not looking to start a quarry business in the Philippines is to open a construction e-Commerce store. Const.PH is a great example of how this type of business can be managed successfully.
How To Start A Quarry Business In The Philippines
Starting a quarry business in the Philippines is similar to starting a sand and gravel business. Still, it has some big differences. One of those differences is the laws and requirements, which are important to investigate when starting any new business.
Earlier on, we mentioned Republic Act No. 7942. We focused on Section 42, but if you are opening a quarry business in the Philippines, this full Republic act is something you may wish to read. It covers some important quarry business points, including local laws and requirements.
Additionally, business owners will need to apply for a permit from the mining regulator board. It’s highly recommended to seek assistance when opening this type of business as illegal extraction and removal of materials can come with a financial fine or, in serious cases, imprisonment.
One of the main areas for consideration when opening a quarry business is the business’s cost and return on investment. Hiring or purchasing machinery is essential but can be costly. In some cases, it can take several months or years before you start to see a return on investment, which entrepreneurs need to consider.
How Much Does A Sand, Gravel, Or Quarry Business Cost To Start?
When starting a sand gravel or quarry business in the Philippines, a mixture of costs will impact the total cost of starting the business.
If you start a simple buy and sell business, your cost will be minimal. You will not need to pay or hire machinery. However, if you want to open up a quarry business, you need to hire or purchase pieces of machinery such as grinders and crushers. Each vehicle has different capacities/load space, which can impact the cost of starting this type of business.
From research, we found that hiring a digger/excavator/crusher and so on costs anywhere between 1000 – 3000 pesos per day per vehicle. So, for example purposes, the cost is 2000 pesos per vehicle. Therefore, if we opened up a small operation including 3 vehicles for 30 days, the cost would be at least 180,000 pesos.
This is for example purposes only. The total cost will depend on the size and type of business you are planning to open.
What Is The Profit Of A Sand, Gravel, Or Quarry Business In The Philippines?
Even though this may not be the most glamorous of businesses in the Philippines, the sand and gravel business and the quarry business can be profitable; however, this will depend on many factors, including the current market value, supply, and demand.
If you are looking to start a larger business or a small quarry business in the Philippines, you will need to pay for machinery equipment and other startup costs that can quickly add up. Therefore the return on investment may take some time.
When looking at the profit of a sand and gravel business in the Philippines, another consideration is the product’s price. We found that, on average, 1 cubic meter of sand costs 750 – 1200 pesos from research. Gravel ranged from 400 – to 750 pesos per cubic meter. The costs differ depending on the types of gravel and sand – different grades have different prices. Prices exclude delivery.