Product details

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Abstract

With problems related to housing becoming a critical issue due to increasing population and the high cost of building materials among other things it became obvious that alternatives to Portland cement, which was the main building material for construction, had to be sought. Cement consumption and prices had been rising due to increased activities 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 convinced that the Pozzolana cement they had researched could be successfully used as a complement to Portland cement, made an announcement to that effect. 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 gave an amount of $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. 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 a staff strength of 86. However, by August 2011, less than 5 workers were at post because management had to relieve workers of their positions since the company had no money to pay them. There was a public outcry at why such an innovation with the ability to solve the country’s housing deficit could be allowed to go to waste and various stakeholders called on government to intervene to save the company from its imminent collapse. Apparently, the company had expected government to patronise its product, however, the government did not do so. As a result, the company had to develop mechanisms to revamp the cement industry with its brand and find alternative ways of marketing its product and ensuring the company was not shutdown. 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 give market share to a company. Government support notwithstanding, an innovative marketing strategy and creative product development strategy are important in ensuring the success of companies.
Location:
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Other setting(s):
2012

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Abstract

With problems related to housing becoming a critical issue due to increasing population and the high cost of building materials among other things it became obvious that alternatives to Portland cement, which was the main building material for construction, had to be sought. Cement consumption and prices had been rising due to increased activities 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 convinced that the Pozzolana cement they had researched could be successfully used as a complement to Portland cement, made an announcement to that effect. 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 gave an amount of $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. 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 a staff strength of 86. However, by August 2011, less than 5 workers were at post because management had to relieve workers of their positions since the company had no money to pay them. There was a public outcry at why such an innovation with the ability to solve the country’s housing deficit could be allowed to go to waste and various stakeholders called on government to intervene to save the company from its imminent collapse. Apparently, the company had expected government to patronise its product, however, the government did not do so. As a result, the company had to develop mechanisms to revamp the cement industry with its brand and find alternative ways of marketing its product and ensuring the company was not shutdown. 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 give market share to a company. Government support notwithstanding, an innovative marketing strategy and creative product development strategy are important in ensuring the success of companies.

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Location:
Industry:
Other setting(s):
2012

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