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Pozzolana Cement: Developing and Marketing a New Cement Additive in Ghana

Abstract

Due to a growing population and the high cost of building materials (among other challenges), housing problems had become more and more urgent — it became obvious that alternatives to Portland cement, the main building material for construction, had to be sought. Cement consumption and prices had been rising due to increased activity in the construction industry and the monopoly of Portland cement on the market. In 2006, after conducting research into the production of a cement additive using pozzolanic materials, The Building and Road Research Institute of the Council for Scientific and Industrial Research (CSIR) in Ghana announced that the Pozzolana cement they had researched could be successfully used as a complement to Portland cement. Pozzolana, produced from clay and palm kernels, was cheaper to produce and therefore cheaper than Portland cement. Subsequently, CSIR signed an agreement with PMC Global Incorporated of the USA under which Pozzolana became a wholly owned subsidiary of PMC. Under the agreement, PMC paid $150,000 in exchange for the license. The $150,000 was seed money to expand the pilot plant for the production of Pozzolana at the BRRI while the multinational completed other agreements pertaining to land acquisition for the building of its own plant. After the construction, PMC was to take over the license and exclusive production of Pozzolana for an initial five-year term. The Pozzolana Cement Factory commenced full operations in March 2011. But by August 2011, there were signs that the company was facing imminent closure of its facilities. In March 2011, the factory was producing 2,000 bags of Pozzolana cement per day and had 86 staff members. However, by August 2011, fewer than 5 workers were on duty because the company lacked adequate funds to pay staff. There was a public outcry at how such an innovation that promised to solve the country’s housing deficit could be allowed to go waste, and various stakeholders called on the government to intervene to prevent the business’ collapse. Apparently, the company had expected the government to patronize its product, however, the government did not do so. As a result, the company had to develop mechanisms to revamp the cement industry with it brand and find alternative ways of marketing its product and ensuring the company was not shut down. The Pozzolana case illustrates that the role of companies is not only to create innovations. The onus lies on companies to create value for customers after introducing an innovation. It also illustrates that an innovation on its own does not ensure market share for a company. Government support notwithstanding, an innovative marketing strategy and a creative product development strategy were important in ensuring success of companies.

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Published by:China Europe International Business School

Publish Date:2013-01-01

Language:English

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