Requirements to Start a Stone Crushing Unit in Pakistan

Stone Crushing Unit is one of the potential businesses nowadays due to the mounting construction sector in the country. This setup can be located at any rocky or barren type area distant from the urban settings like Hub, Superhighway, Manghopir, Jhampir or Nooriabad that are in near proximity of Karachi while other similar areas can be around Lahore, Multan, Faisalabad, Peshawar and Quetta where real estate development and construction projects are on peak. This business can also be undertaken in all small second tier towns, in addition to suburban towns of large cities.

Products includes:

Crushed stones of 1” (20mm), 0.75’’ (16mm), 0.5” (13mm), 0.25” (10mm) and Chips (5mm).


Available production capacity is 3,750 CbFt. per hour or 30,000 CbFt. per day for eight (08) working hours. However the initial utilization is around 65%.

Total Cost Estimates is Rs. 66,413,119 with fixed investment of Rs. 60,850,000 and working capital of Rs. 5,563,119. For the given cost assumptions, IRR and Payback Period are 29% and 3 years and 11 months respectively.

The most critical considerations or factors for success of the project are:

Most significant considerations

  • Connections with the building material suppliers, well known builders and contractors.
  • Update information on legal and commercial terms of civil and construction works initiated by local, provincial and federal government.
  • Selection of products/brands to be distributed
  • Location of the Unit
  • Timely recovery of cash from builders, contractors, engineering firm etc.
  • Capacity/space optimization
  • Negotiation and marketing Skills
  • Fuel & maintenance costs of the heavy vehicles & plant

The demand of Stone Crushing units is increasing across the country which is proportionate to the increased growth of Real Estate and Construction Sector reflecting improved economic growth and rising consumerism. Therefore the potential target market for the proposed Stone Crushing setup are the construction and engineering firms, builders and contractors having alive projects in densely populated cities like Karachi,Lahore, Multan, Faisalabad, Peshawar and Quetta.


Keeping in view the proximity of target market the proposed unit can be located at any rocky or barren type area distant from the urban settings like Hub, Superhighway, Manghopir, Jhampir or Nooriabad that are in near proximity of Karachi while other similar areas can be around Lahore, Multan, Faisalabad, Peshawar and Quetta where real estate development and construction projects are on peak.

Employment Generation:

The proposed project will provide employment to 41-45 people in the roles of sales/marketing, supervisor, technical, labor & security.


  • The setup would include: Plant; Vibrators, Hammer Crusher, Rotor, Conveyor Belts, Motors (ranging from 10-250hps) and Support Structure.
  • Heavy Vehicles; Loader, Jackhammer, Excavator, Dumpers and Bulldozer.
  • Laptops & printers for the management staff.
  • Personal Protective Equipments (PPEs) for the safety of the labors.

Stone Crushing – Production Process in Pakistan

The main machinery involved in the stone crushing industry is Hammer Crusher, Vibrators, Rotor, Conveyors and Support Structure. The process involved is to feed the stone in to the Hammer Crushers to make it further smaller in size as required by the customer. In the hammer crusher, the stone is crushed. The crushed stone is screened to separate the produce in different sizes by the separator. The crushed stone is conveyed by the conveyors to trucks for transport to the market place or storage area.

Material Sourcing

Hard Lime Stone is the basic raw material which is used for the production of quality crushed stone. God has bestowed Pakistan with huge reserves of mineral wealth which are spreading all over the country and especially enormous reserves of Hard Lime Stone are generally found around the country in all provinces. Hard Lime Stone will be used as raw material for manufacturing crushed stone. Raw stone could be purchased directly from the excavator (quarry lease holder) or crusher may hold his own quarry lease to produce raw stone. For the purpose of this prefeasibility, it is proposed to obtain a quarry lease holding to avoid any possible threat in procuring raw stone as well as to keep the project economically stable.

Installed and Operational Capacities

For the proposed business, an area of 500 acres has been acquired on rent and with the provided Plant specifications, there is 30,000 CbFt. production capacity per day for an Eight Hour (08) shift which will be utilized 65% i.e. 19500 CbFt. initially. While this capacity utilization will be increased 11% per year till the achievement of 100% capacity in the 5th year. From 6th to 10 year the setup would operate on 100 % capacity. This capacity is distributed in equal proportions on the following products;

  • 1” (20mm)
  • 0.75’’ (16mm)
  • 0.5” (13mm)
  • 0.25” (10mm)
  • Chips (5mm)

The main critical success factors that affect the decision to invest in the proposed business setup are:

Business Model and Distribution

Crushed Stone business is dependent on the pricing and margins given to builders, suppliers and retail customers. It also depends on efficient supply of crush to the customer and communication facilities provided to the prospective clients, retailers and order bookers. Generally crushed stone units pile the produce on quarry sites (mostly outside the city) in huge volumes in the open space. Construction contractors, retail customers and builders contact crusher in order to obtain crushed stone.

Market Entry Timing Stone

Crushing business depends on activity and movement in construction industry. Housing and construction plus government initiated development projects demand mass availability of crushed stone all over the year. Therefore, a crushed stone manufacturing unit could be established at any time of the year. Most importantly, as the construction industry in Pakistan is on peak which many private and public real estate developmental projects in pipeline so therefore it is high time to enter in the market serving the gap in the industry.

Conventional Order Booking Arrangements

As stone crushing is one of the allied sector of construction industry. Therefore, all raw material suppliers to the construction industry are considered to be the part of the distribution network for the crushed stone.

A stone crusher when setting up a crushing unit, initiate and institute contacts with the construction material suppliers, retailers and signup a contract in order to appoint them as order booking agents. Generally, construction and building material supplier, who is the part of the whole chain, links up customer and operator [of stone crushing unit]. Sometimes he has his own delivery vehicles and in most of the cases, keeps arrangement with the commercial vehicle operators, material manufacturers, and buyer, thereby assuming a significant role in the value chain.

Ordering and Delivery Procedure:

Crusher appoints order booking agents (building material suppliers) within the city who entertains the customer. Customers usually send someone or personally go to the booking office and place the order which includes details indicating quantity, quality, size and time of delivery etc. Booking agent gets the payment in cash (mostly) and issues an order / delivery slip to the customer, showing order details.

Buyer produces the order slip (in local term called ‘parchi’) to the person responsible for the physical delivery of the crush. That person renders the order as given on the slip. After loading the vehicle, he hands over it to the buyer /order booker and here ends the role of the crusher.

Crushed stone producers also book direct orders at crushing site office for the construction contractors, retail customers and builders on phone and supply directly to the identified delivery points. However, these types of facilities are mostly provided for bulk orders.

Product Marketing

In the manufacturing industry, marketing is considered to be of significant importance. In the Stone Crushing industry, marketing parameters are very limited and usually in some degree associated with the construction sector. Some of the marketing promotion activities which should duly be rendered are given below:

  • Connection development with the building material suppliers, well known builders and contractors.
  • Update information on civil and construction works initiated by local, provincial and central government.
  • Draw linkages with material suppliers to the housing industry at town level.
  • Emphasis on image development and acquaintance across individual contractors who are serving private sector.
  • Establish contacts with local civil engineering firms, individuals and professionals.

Geographical Potential for Investment

For crushed stone manufacturing purpose, majority of the crushing units use Hard Lime Stone, the reason lies in its extreme hardness and it also gives maximum strength to the building structure. Another reason is that it is easily available across the country in large quantities; however, granite could also be used for this purpose, as it is used by many other countries, though its excavation is comparatively difficult.

Hard Lime Stone is found almost in every part of the country; however, in case of Granite, so far known sources of workable granites in the country which could be used for crushing purposes are only found in Nagarparkar, South East (Sindh) and Manshera in the North (NWFP). Gilgit Region (Northern Areas) does indicate great potential of variety, quality and quantity of granites that according to geological evidences have superiority over other granites in Pakistan. The reserves of Hard Lime Stone in Pakistan have not been specifically estimated, yet broad figure of tens of billions of tones is generally quoted.

Based on discussions with the industry experts and entrepreneurs, only in province of Punjab there are more than 650 stone crushers operating in Chakwal, Jhelum, Gujranwala, Rawalpindi, Lahore, Dera Ghazi Khan, Mianwali, Gujrat, Bhakkar, Attock and Sargodha. The number increases when we move towards Sindh, Baluchistan and Khyber Pakhtunkhwa as the material reserves for the industry also increases plus the construction projects are even more in numbers there.

Environmental & Protection Aspects

Persistent exposure to asbestos which is a natural fiber found in the dust particles of crushed stone, are produced in stone-crushing factories during the crushing process. To avoid its harmful effect on human health, it is suggested to follow complete instructions and procedures provided by the provincial agency of environment protection.

The major environmental aspects for stone crushing units are discussed as follows:

  • Location of plant has to be such that ingress of heavy vehicles does not block the traffic. Evening and late night operation is to be avoided if passage is through residential areas. Payload area is covered by tarpaulins when transporting crush to prevent fall out of fines and emissions of dust.
  • Dust containment enclosures are required for the purpose of containing the emissions within an enclosure and to prevent wind currents, which can spread the dust to larger areas.
  • The enclosures should be, complete from all four sides and roof. There should not be open windows/ openings etc. The gaps should be sealed using gaskets or wool type packing etc.
  • The Dust Suppression System should comprise of a covered water storage tank, a pump, an online water filter, connecting GI pipes, spray nozzles each fitted with flow regulating valves.
  • Volume and strength reduction of the effluent is to be achieved by preventing mixing of waters from washing activities and processing activities
  • Liquid effluent is to be treated by sedimentation process meaning subjecting the effluent to flow through settling tanks
  • Effluent is to be treated by coagulation, i.e. adding any coagulant to the settling tanks. Though this treatment is expensive as compared to the sedimentation process, it is reportedly more efficient.

Potential Target Market in Pakistan

Construction sector has been registered with a growth rate of 7.05 percent. The seven plus growth in this sub-sector is due to rapid execution of work on various projects, increased investment in small scale construction and rapid implementation of development schemes and other projects of federal and provincial governments. The highlighted reasons for this growth rate can be mainly infrastructural projects like highways/motorways, CPEC, new public transport setups etc.

Increased construction material requirements for private mega housing projects across the country is also one of the major drivers of growth in more than 70-100 other small industries that are directly or indirectly part of the construction industry . While various other construction and real estate development projects that includes the projects under public sector development and private public partnership heads are continuously being commissioned which will also be having high demand of crushed stone’s material all over the country. Moreover, as the construction sector has been showing consistent growth rates in the range of 7-8% over the last few years and so this has resulted multiplier growth in more than 40 allied industries including that of Stone Crushing.

The potential target market for the proposed Stone Crushing setup are the construction and engineering firms, builders and contractors having alive projects in densely populated urban cities like Karachi, Lahore, Multan, Faisalabad, Peshawar and Quetta whereby intense growth of Real Estate and Construction Sector reflecting improved economic growth and rising consumerism.

Stone Crushing units across the country are working mostly as unorganized sector and no reliable data is available for the installed capacity and the number of operational units. However, since it is an allied industry of the construction sector, growth in construction sector as mentioned above can be considered as proxy for the growth in stone crushing sector, i.e. around 7-8%. The market scope for crushed stone is found to be encouraging in local market with the increased demand from building industry & construction fields. There is also a sufficient demand from Govt. contractors for laying of roads and construction of industries etc.

Problem/Threats to the Stone Crushing Sector in Pakistan

  • Local customs and traditions, non-availability of infrastructure facilities like roads and electricity are the major hurdles in the development of the sector.
  • Poor law and order situation particularly in geologically promising areas.
  • Non-availability of modern machinery in local market at cheaper rates.
  • Lack of reliable and comprehensive geological data base/ mapping.
  • Non-availability of latest and modern exploration techniques/ machinery.
  • Non development oriented Mineral Concession Rules
  • Lack of investment friendly environment created by the relevant government agencies.
  • Lack of coordination among various mineral sector agencies.

Financial Requirements to Setup Stone Crushing Business in Pakistan

A detailed financial model has been developed to analyze the commercial viability of this project. Various costs and revenue related assumptions along with results of the analysis are outlined in the pre-feasibility study of stone crushing plant by SMEDA.

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