Pros and cons of investments in the granite industry
The Ukrainian state balance of minerals contains 33 deposits of such building stones as granite and limestone in Nikolayev city. The volume of stocks is around 470 000 cubic meters. This makes actually 4,5% of all stocks around the country. However, specialists value the potential output at millions of cubic meters annually. Investors (both domestic and foreign) put themselves down on a waiting list in order to get their own morsel of this tasty pie.
Let start with business expenses…
An entrepreneur, fist of all, must well realize that this business is not simply expensive, it is very expensive. Moreover, its first stage – bureaucratic - is rather lingering, it reminds the steeplechase: it is so complicated sometimes, that not all come to the finishing post. It is well-known that only rich and influential people at the same time can obtain a right for using the quarry. On the other hand, a man without relations can waste years on this matter. A right to use the certain lot, the certain deposit, as well as the right to study or to extract can be obtained during an auction. The participation in it costs 7 000 hryvnias, plus 30 000 hryvnias of dues before, plus 32 000 hryvnias for the geological documentation, plus 10% of the initial price determined by the state. Then candidates fight during an auction, the price gets higher, and finally the winner obtains the desired license permitting him to use deposits. He must also get the numerous agreements from village and regional councils, an ecologic map in regional department of ecology, the permission from protection from the labor inspectorate, etc.
The next investment – is purchasing of the equipment, the minimal set of which costs approximately 15 million hryvnias for block open pit and up to 50 million hryvnias for macadam one.
The geologic prospecting is not a cheap pleasure too. It may be quite risky: the deposits of granite can turn to have a high radioactive background in the result. In general, the granite could be divided into 3 groups. The stone of first group can be used in all kinds of building. The second class stone cannot be used in building of dwelling houses. The third is useful in building of roads and hydraulic works. Of course, the stone of the first group has the best commercial future. Here in Ukraine, its deposits can be found in Domanevskiy, Bratskiy, Voznesenskiy, Kazankovskiy, Novobugskiy, Elaneckiy regions of Nikolayev. The minimum price for cubic meter of such stone is around 350 dollars.
Why is it still worthy?
Even keeping in mind the huge amount of initial investments, there is more than enough people who desire to start up such business. The reason for such desire is the high yield and the rapid payback. In fact, the macadam open pit is commonly repaid in 2 years.
Each entrepreneur has to decide for himself: whether he wishes to make rough business only or would like to be involved in production with closed cycle. An experience shows the entrepreneur who is engaged in the stone processing wins more. From the other hand, it isn’t profitable just to process the stone and not to have own rough basis. Today the major importers of our raw remain Russia and Poland. However, there is the number of enterprises which supply Western Europe and USA.
The business is profitable because all the waste is being utilized, even the granite dust. It is applied on the ceramics under the high pressure and temperature.
This business brings noticeable changes to the social life as well. One open pit requires not less than 100 workers. As usual, it is observed high level of unemployment in villages today. As experts claim, the deposits of Nikolayev region are enough for as many as fifty firms. It is also true that deposits should be studied well. There is no council or any other state structure that will control specifically this branch. But there are people who believe in future if their risky business and ready to invest large sums in the branch.