Unexpected development champions in the heart of the concrete industry

Construction industry veteran Sherman Balch founded his nonprofit, Extollo International, to build up construction skills and supply chains in Haiti. Photo by: Extollo International

This article is produced and published by Devex Impact, a global initiative of Devex and USAID, that focuses on the intersection of business and global development and connects companies, organizations and professionals to the practical information they need to make an impact.

International development is a topic one expects to hear about at a conference convened by the United Nations, World Bank or Bill & Melinda Gates Foundation — not a concrete-industry convention.

Yet at the ‘World of Concrete’ expo held this month in Las Vegas, Bruce Christensen spoke to fellow concrete industry leaders, calling on them to join in his mission to improve concrete practices in the developing world, where shoddy mixing and other factors have led to building collapse during earthquakes or other natural disasters.

“Concrete keeps falling down on the world’s poor, but so far no one has taken action. We need to organize our industry to make this right,” said Christensen, general manager at Cart-Away Concrete Systems, a privately owned Oregon-based company that provides concrete services and equipment to U.S. businesses.

Cart-Away has focused on this issue, creating a cement-mixer appropriate for the developing world and working to improve in-country supply chains.

While large multinationals like Microsoft, Wal-Mart and IBM have leveraged corporate citizenship to engage with emerging markets, this nascent movement in the U.S. cement and construction industry shows the potential for smaller companies to engage on the same issues, moving beyond charity to engage their core business to positively impact the developing world.

Wake-up call from Haiti

Christensen, who has worked with Cart-Away for 15 years, said he had never thought much about concrete supply chain systems outside the United States. Then came the Haiti earthquake in 2010, which killed more than 300,000 people, according to the government of Haiti, and destroyed 70 percent of buildings in the capital city, according to the International Committee of the Red Cross.

“We saw the pictures in the press, and we thought: ‘Something is wrong, most of that rubble is concrete.’ That was like a light bulb going off.”

Christensen was hungry to learn more about concrete processes in the developing world and, because business was slow in 2010 due to the U.S. economic recession, he had time to do research. He discovered that concrete in Haiti is often mixed by hand with shovels, with low-grade inputs or “aggregates,” and insufficient cement powder.

According to an analysis by Kimberly Kurtis, a Georgia Tech professor and chair of the American Concrete Institute’s Materials Science of Concrete Committee, hand-mixed concrete in Haiti had a compressive strength of 1,300 pounds per square inch, compared with 3,000 pounds per square inch found in the United States.

Christensen and others at Cart-Away were inspired to take action. The company had never sold any equipment outside the United States, Christensen said, “but we knew how to make mixers and how to set up concrete supply chains for small communities. We realized we were uniquely qualified to help.”

The problem with hand-mixing concrete is that it can unevenly disperse the cement powder, which functions as a glue holding the mixture together, and result in weakness.

Cart-Away had designed a low-tech mixer in the 1990s, and Christensen’s team realized it might provide a solution in Haiti and other developing countries: the mixer requires no electricity, can be easily hauled by a small truck and releases concrete through a spout into buckets, which are commonly used in the developing world for construction.

Christensen’s team reconfigured the mixer, adding premeasured containers for the aggregates, making it easy to get the ratios right. “The mixer itself is a recipe to keep the product constant,” said Sherman Balch, another construction industry veteran who began focusing on concrete supply issues after the Haiti earthquake. The nonprofit he founded, Extollo International, focuses on building up construction skills and supply chains in Haiti.

Christensen’s team began to market the mixer, called Concrete MD, to nongovernmental organizations and donors then engaged in rebuilding Haiti.

Cart-Away incorporated the Concrete MD into its own business. “We had a profit motive as well as a charity motive,” Christensen explained.

But Christensen and his team quickly learned there was more to the problem than having the right technology. “In Haiti, it’s hard to get good aggregate, the cement is low quality, the delivery systems are poor, and builders don’t do enough engineering,” he said.

Realizing that these complex problems could not be solved by working alone, Christensen’s team created Cement Trust, an online platform dedicated to the problems of concrete construction in the developing world.

“Cement Trust brings together thought leaders in the concrete industry who have a common interest in curing the world’s poorest concrete,” said Christensen, who uses the website to blog and gather information on the issue. To find like-minded “concrete geeks” like himself, he decided to make his presentation at the World of Concrete expo, the largest event of its kind.

Connecting with the development community

Christensen originally assumed NGOs and other development agencies would be natural customers and partners, and what he found surprised him.

“Unfortunately a solid, safe and sustainable concrete supply chain system has few champions in the development community,” wrote Christensen on the Cement Trust website.

Some NGOs that contacted Cart-Away about the Concrete MD expected the mixer to come for free, he said. “I appreciate the charity model, but we are a small manufacturer and we need to make this work for us.”

The bigger issue, he said, has been that few NGOs and donors see the concrete supply chain in a holistic way. “Their business is go in and fix things. If a big NGO needs a rubble crusher, they buy a rubble crusher,” he said. Those organizations overlook the opportunity to help create a local rubble crushing facility, which might provide jobs even after an NGO’s reconstruction efforts are over.

“The vision we’re promoting is to not only use appropriately scaled equipment, but also to improve the quality of local concrete and raise economic fortunes of people in that area.”

Christensen said he understood that most people don’t think about the concrete supply chain, in part because strengthening a supply chain requires a deeper level of community engagement.

While local engagement is often a must in successful development work, that dynamic is even more pronounced when it comes to developing the concrete supply chain. Because aggregate, including sand and rock, is so heavy, it cannot be easily imported. The only part of the mixture that usually needs to be imported is cement powder.

Balch, who serves as Extollo’s CEO, said his nonprofit uses an apprenticeship model to build skills among current and future construction workers in Haiti. The nonprofit teaches workers the basics of concrete and masonry through short classes and on-the-job learning, he said. The Haitians learn, for example, to keep wells free of brackish water, so the salt content doesn’t dilute the cement powder.

“Haitians are very aware of the consequences of poor construction,” said Balch, who is also vice president of Balch Enterprises, a family-owned construction company in California. Workers who do well in the initial training are given further training, with the idea that they can evolve into general contractors, he said.

Balch said the number of “microbusinesses” that sprang up around their construction sites in Haiti was a testament to the power of growing the local supply chain. “One guy set up a kitchen under a canvas sheet, selling food to the guys on the site,” Balch said. “Now he’s building a more permanent structure and has hired someone to help out.”

The Extollo project has employed 68 workers. “We’ve improved their lives not because we gave them anything, but because they had jobs and the opportunity to work and now they are going on to other places.”

But Balch said the model of training and supporting local business has been a “hard sell” for large NGOs. “Training is costly, and a lot of NGOs don’t want to spend the money, they just want the project done,” he said, noting that some NGOs brought in craftsmen from other countries. “We are trying to match up with organizations who understand the importance of training.”

Balch said he shares Christensen’s long-term vision of improving the concrete supply chain. “Haiti should be rebuilt by Haitians, who can learn trades and skills in the process, and it should be rebuilt to a higher standard, because so many deaths were caused by poor construction practices.”

A concrete business model

Christensen has been advocating for fellow concrete industry leaders to focus on developing world issues. “One of their first questions is: What’s in it for us? Unless they see a profit motive, it’s not worthwhile.”

Christensen said that his company, Cart-Away, has found an answer to that question. “There is a huge opportunity for us in developing the world’s concrete supply chain.” He said it was only through this work inspired by the Haiti earthquake that prompted his company to think in global terms.

Christensen said that Cart-Away has not yet made a profit from the sale of the Concrete MD mixers. “It will take us years to see a return on that investment, but our leadership sees the long-term opportunity.”

Convincing other companies to place a similar long-term bet on bottom-of-the-pyramid technology for the developing world has been tough. “Some manufacturers are so involved in making widgets for the developed world, they have trouble catching the vision.” Even when they do see potential, the investment can seem risky. “Larger corporations in particular need to see a huge upside before they invest.”

Vermeer, a family-owned construction and agricultural equipment manufacturer, has taken that leap, working on technology to make blocks out of soil. Cart-Away is also working with a Portland, Oregon-based company to develop a rock crusher that small business people can use to process aggregate.

Christensen said he hopes to involve development agencies that, in turn, can help companies understand the business opportunity in emerging markets and convince them to make the initial investments.

Looking ahead

Cement Trust is hosting a symposium in July 2013 to motivate other companies to get involved — and to get the attention of the international development community. In the meantime, Christensen said he will consider organizing Cement Trust into something more formal, likely a 501©3.

But Christensen, who has never been to Haiti, is clear he doesn’t want Cement Trust to become another implementing NGO. “We don’t know how to enter the developing world and get something accomplished,” he said. “If I went to Haiti tomorrow, I would just wander around telling people they need better mixers.”

The solution to that problem, Christensen said, is partnership. While companies like Cart-Away have the expertise to set up supply chains and provide appropriate technology, nonprofits and local entrepreneurs can execute on the ground with assistance from donors and large companies.

Balch said he also wants to stay focused on his core expertise and seek out new revenue streams from NGOs. He said his organization currently keeps costs low by minimizing travel — he conducts site inspections in Haiti via Skype — and using volunteer journeymen to conduct training. With Extollo financed largely by donations from a few individuals, including himself, Balch said he is looking for more interest among NGOs and donors who have construction projects. “If they can add 10 percent to their construction budget, we can provide that training for the long term.”

Balch said he expects more concrete industry companies to get involved in the developing world as they begin to perceive the business opportunity.

“Construction is an industry that really stimulates the economy, and there is so much demand for the workers we are training and equipping. We have a great opportunity to make an impact.”

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About the author

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    Andrea Useem

    As Associate Editor and Content Director for Devex Impact, Andrea creates and manages cutting-edge content on the intersection of business and international development. An experienced multimedia journalist, Andrea served as leadership editor at the Washington Post and spent three years as a foreign correspondent in Eastern Africa reporting for publications including the Boston Globe, Dallas Morning News, and San Francisco Chronicle.